The opinion of the court was delivered by: Cedarbaum, District Judge.
AMENDED OPINION AND ORDER
Plaintiff Toyomenka Pacific Petroleum, Inc. ("Toyomenka") is
a California corporation. Defendant Hess Oil Virgin Islands
Corp. ("Hess") is a U.S. Virgin Islands corporation. Toyomenka
brings this diversity action to recover demurrage for Hess's
delay in taking delivery of a cargo under a contract for the
sale of crude oil. Both parties have moved for summary
judgment. Because the material facts are not in dispute and I
conclude that Hess's delay is excused by the force majeure
clause of the contract, Hess's motion for summary judgment is
granted and Toyomenka's motion is denied.
The following facts are undisputed except where noted.
Hess owns an oil refinery on St. Croix with a terminal for
receiving crude oil. On September 11, 1989, Toyomenka
contracted to sell crude oil to Hess and to deliver the oil by
ship to Hess's St. Croix terminal between October 25 and
November 7, 1989. (Contract, Cl. EEE.)*fn1 Toyomenka provided
the wording of the Contract. (Toyomenka Rule 3(g)
Counterstatement, ¶ 2.)
The Contract provided that Hess would pay demurrage for the
ship's laytime at the terminal. (Contract, Cl. JJJ, KKK.) The
Contract fixed the rate of demurrage "as per charter party
demurrage rate." (Contract, Cl. KKK.) On September 15, 1989,
Toyomenka chartered the Edenburgh Fruid ("Fruid") to deliver
the oil to Hess under a charter party which set daily demurrage
at $17,500. (Toyomenka Ex. 2, Part I, Clause I.)
The Contract also included a force majeure clause, Clause
QQQ, which reads as follows:
Neither seller nor buyer shall be liable for
damages or otherwise for any failure or delay in
performance of any obligation hereunder other than
the obligation to make payment, where such failure
or delay is caused by force majeure, being any
event, occurrence or circumstance reasonably
beyond the control of the party claiming force
majeure, including without prejudice to the
generality of the foregoing, failure or delay
caused by or resulting from acts of God, strikes,
labor disputes, fires, floods, wars (whether
declared or undeclared), riots, destruction of the
product, delays of carriers due to breakdown or
adverse weather, perils of the seas, embargoes,
accidents, restrictions imposed by any
governmental authority (including allocations,
priorities, requisitions, quotas and price
controls). The party claiming force majeure shall
give written notice thereof to the other party
within forty-eight (48) hours of the occurrence
thereof, stating in reasonable detail the cause
and the expected duration. The affected party
shall use reasonable diligence to remove the force
majeure situation as quickly as possible. . . .
The time of the seller to make or buyer to receive
delivery hereunder shall be extended during any
period in which delivery shall be delayed or
prevented by reason of any of the foregoing
causes, up to a total of thirty (30) days. If any
delivery hereunder shall be so delayed or
prevented for more than thirty (30) days, either
party may terminate this contract with respect to
upon written notice to the other party.
On September 17 and 18, 1989, Hurricane Hugo passed over St.
Croix, causing damage to Hess's terminal and refinery.
Toyomenka does not dispute that its personnel "were in nearly
daily contact with [Hess] following the hurricane, were
apprised of this circumstance," and that "information regarding
the condition of the refinery was communicated to them as such
became available." (Hess Rule 3(g) Statement, ¶ 14.)
On September 26, 1989, Hess telexed a notice to Toyomenka
As you know, as a consequence of Hurricane Hugo
which devastated St. Croix, USVI, our facility
there suffered substantial damage and is
Following our survey of the facility, it has
been determined that we are unable to receive or
process captioned cargo, and we are presently
unable to advise as to the duration and
consequence of this force majeure event. We shall
advise you when we are in a position to do so.
Regrettably, under the circumstances of this
force majeure event, and in accordance with Clause
QQQ of captioned contract, please accept this as
our notice of such force majeure.
Two days later, on September 28, Hess again telexed
Toyomenka, this time stating that it appeared that the harbor's
ship channel would be reopened on October 3 and that Hess "can
discharge crude oil into our refinery to be held in storage
until some future date when the refinery will process same."
Hess concluded: "In view of the above, it appears now, and we
will make our best ...