Lemenda Trading Co Ltd v African Middle East Petroleum Co Ltd [1988] 1 Lloyd’s Rep. 361 (Q.B.D.) (Comm Ct)

Facts: The plaintiffs are a company registered in Nassau and the defendants are a company registered in London, but the real protagonists in this dispute are individuals. The principal shareholder in the plaintiff company is Mr Hassan Yassin, a Saudi Arabian. The principal shareholder in the defendant company is Mr Fakhry Abdelnour, an Egyptian. Mr Yassin described the plaintiffs’ business as ‘advisers in connection with the petroleum industry’. The defendants carry on business as dealers in petroleum. Mr Abdelnour explained that they do not deal on the spot market but purchase and resell oil under long-term supply contracts. Q.G.P.C. is the national oil corporation of Qatar and is owned and controlled by the Government of Qatar. On 28 August 1984 the defendants and Q.G.P.C. executed an agreement (‘the supply contract’) whereby for the six months beginning on 1 October 1984, Q.G.P.C. was to supply to the defendants on f.o.b. terms 750,000 barrels of crude oil per month. The defendants admit that they entered into an agreement with the plaintiffs in relation to the renewal of the supply contract. They contend, however, that the terms of the agreement were that the plaintiffs would be entitled to their commission if, but only if, they procured the renewal of the supply contract prior to and with effect from 1 April 1985. It was agreed that the supply contract was governed by Qatar law, and that under that law contracts which were contrary to public policy were void. It was also agreed that it was official Qatar Government policy to prohibit agreements for commission in respect of oil supply contracts.