The action, brought by Irish building materials giant, Kingspan Group, was tabled in excess of £101m, but its claims have been dismissed in their entirety.
In 2006, Borealis successfully defeated a £70m-plus law suit in the London Commercial Court by the Scottish oil tank manufacturer Balmoral Group Ltd, in which Balmoral claimed that deficiencies in Borealis’ third generation metallocene polymer Borecene had caused the failure of more than 5,000 rotationally moulded kerosene oil tanks.
After a three month trial in the same court, between May and July 2011, Borealis has now defeated a second claim against Borecene, by Kingspan PLC, four of whose subsidiaries manufactured some 115,000 oil storage tanks in four different factories using Borecene, suffering some 25,000 failures, many within only two or three years of manufacture.
Balmoral alleged that Borecene was unfit for purpose, due to its inability to withstand “environmental stress cracking” when used to store kerosene, a case Kingspan originally adopted. After Balmoral had failed to establish this at trial, Kingspan changed its approach and instead alleged that the ultra violet (UV) protection package within the polymer provided an inadequate defence against heat and light, causing the tanks to fail.
Together, the legal actions involved scientific evidence given by 16 technical experts in polymer science, rotational moulding and UV degradation.
In his 1 May Mr Justice Christopher Clarke, who presided in both cases, agreed with Borealis, that:
•The sales of Borecene were made on Borealis’ Terms of Trade
•Those Terms were effective to make Danish law the applicable law
•The contracts were International Supply Agreements to which the Unfair Contract Terms Act 1977 does not apply
•Borealis was guilty of no misrepresentations as to the capability of Borecene, whether under English or Danish law
•Kingspan had failed to establish that the UV package within the Borecene was defective
•Kingspan had failed to establish that the package was the effective cause of tank failure
•In fact the tank failures had been caused by inadequate manufacturing procedures, the use of inappropriate pigments, the adoption of poor tank designs and poor Quality Assurance practices on the part of Kingspan
Kingspan is now faced with a legal costs burden which may exceed £20m.
