Commodities warehouse receipts—common mistake; and issuer’s liability in bailment and negligent misstatement (Natixis SA v Marex Financial)

Table of contents

• What are the practical implications of this case?
• What was the background?
• What did the court decide?
• Case details

Article summary

Commercial analysis: The claim arose out of the discovery that warehouse receipts for nickel deposited in overseas warehouses, were forgeries. In a wide-ranging judgment the Commercial Court concluded that the forgery did not provide a defence of common mistake to a seller who supplied the receipts in performance of contracts for the sale of the nickel. The decision illustrates the limited scope for the doctrine of mistake to operate in commercial contracts, because the contract terms will often allocate risk (expressly or impliedly) for the circumstances that give rise to the relevant mistake. The decision also considered whether a party’s standard terms can exclude or limit tortious liability for misstatement, and the legal effect of a warehouse receipt. Written by Seb Oram, barrister, at 3PB Barristers.