Evyap Sabun Malaysia Sdn Bhd v BG Oleochemicals SL

Appellant(s): Evyap Sabun Malaysia Sdn Bhd

Respondent(s): B.G. Oleochemicals S.L.

• YA Datuk Azimah binti Omar
• YA Datuk Wong Kian Kheong
• YA Datuk Ismail Bin Brahim

• The respondent, a Spanish distributor, purchased Lauric Acid from the appellant, a Malaysian manufacturer, under CIF terms, requiring the goods to be "GMP+ Certified and FSA Assured" for the animal feed industry.
• Upon arrival in Barcelona, the respondent claimed the cargoes were wet, melting, and infested with insects, leading to their rejection and subsequent resale at a lower price.
• The High Court allowed the respondent's claim for breach of contract and negligence, awarding damages for losses allegedly suffered due to the damaged cargoes.

• Whether the evidence justified the High Court's finding that the appellant failed to properly prepare, pack, and ship the cargoes.
• Whether the evidence justified the High Court's further finding that the cargoes were no longer of merchantable quality and/or reasonably fit for purpose.
• Whether the quantum of damages awarded by the High Court was properly proved and correctly assessed.

• The Court of Appeal agreed with the High Court that there were deficiencies in the appellant's preparation, packing, and shipment of the cargoes, citing issues like un-heat-treated pallets and lack of desiccants.
• However, the Court disagreed with the High Court's finding that the cargoes were no longer of merchantable quality or reasonably fit for purpose, noting they were repackaged and sold in the same feed market under the original description and quantity.
• The Court found the High Court erred in treating the subsequent sale as a salvage sale and in assessing damages based on the original contract price without proper evidence of the sound arrived value at the material time, especially given market price fluctuations. The appeal was allowed, and the High Court's orders were set aside.