Christopher J. Kelshall (in his capacity as the liquidator of ArcelorMittal Point Lisas Limited - in voluntary Liquidation) (Respondent) v The National Gas Company of Trinidad and Tobago Limited (Appellant) (Trinidad and Tobago)

Case summary

Case ID

JCPC/2025/0039

Jurisdiction

Trinidad and Tobago

Parties

Appellant(s)

The National Gas Company of Trinidad and Tobago

Respondent(s)

Christopher J Kelshall

Issue

(1) Was the Court of Appeal wrong to hold that a ‘take or pay’ provision in two expired gas contracts had been incorporated into a subsequent agreement for the continued provision of gas on the same terms? (2) Was the Court of Appeal wrong to hold that the appellant had failed to prove its debt?

Facts

The respondent is the liquidator of ArcelorMittal Point Lisas Limited (“Mittal”), a company which entered into voluntary receivership in April 2016. The appellant submitted two claims to the respondent pursuant to arrangements which it had with Mittal for the supply of natural gas to Mittal. This appeal is concerned with the second of those debt claims (“the Take or Pay debt”). The background to the Take or Pay debt arises from two gas contracts between NGC and Mittal, which expired on 30 April 2014 and 30 June 2014 (“the Gas Contracts”). Those contracts (as amended with effect from 1 January 2007) included a take or pay clause to the effect that if by the end of the contract year the buyer (Mittal) had purchased and received less than 80% of the Annual Contract Quantity (“ACQ”) of gas under the two contracts collectively, then Mittal “shall nevertheless pay [NGC] for the difference between the quantity of Gas actually purchased and received and eighty percent (80%) of the total ACQ under [both contracts collectively]… less (i) Gas not taken or delivered due to reasons of force majeure and (ii) Gas not delivered by reason of act or omission of the Seller.” Article 5 of the Gas Contracts provided Mittal with the option to extend and/or renew them for an additional five years. Pursuant to the renewal option, after the expiry of the Gas Contracts in 2014, NGC and Mittal entered into negotiations with the aim of renewing them. During the negotiations, NGC and Mittal exchanged correspondence whereby they agreed that NGC would continue to supply gas to Mittal on the same standard terms and conditions to facilitate the completion of negotiations and sign off the renewed contracts (“the letter agreement”). For the year 2015, Mittal failed to take its agreed ACQ under the contracts. In March 2016, NGC wrote to remind Mittal of its obligation under the Take and Pay provision of the Gas Contracts. When Mittal went into liquidation, NGC submitted a claim for a debt of USD 12,634,551.06 plus interest in respect of the Take or Pay obligation in the 2015 contract year. The liquidator considered the claim, and denied it on the basis that the debt did not arise because the Take or Pay obligation was not extended along with the gas supply as provided for in the letters, and therefore was not incorporated into the letter agreement. The issue which arises is therefore whether the Take or Pay obligation survived the expiration of the Gas Contracts, and thus whether Mittal was bound by the obligation in the 2015 year. NGC appealed to the High Court against the liquidator’s decision. The High Court reversed the liquidator’s decision, and held that the Take or Pay obligation was incorporated into the letter agreement and continued in effect. Mittal appealed to the Court of Appeal of Trinidad and Tobago. The Court of Appeal upheld the High Court’s judgment on the question of whether the Take or Pay provision had been incorporated into the letter agreement. However, the Court of Appeal found that NGC had nevertheless failed to prove its debt. The Court of Appeal reasoned that NGC was obliged to prove that the ACQ of gas was available and tendered for delivery: this was a precondition of Mittal’s obligation to take or pay for 80% of it. The Court of Appeal found that NGC had failed to provide any evidence that the ACQ of gas had been available and tendered for delivery. NGC had therefore failed to prove its debt. The Court of Appeal granted NGC permission to appeal to the Judicial Committee.

Date of issue

12 May 2025

Case origin

Appeal As of Right

Back to top