Falkonera Shipping Company v Arcadia Energy Pte Ltd, Re "Falkonera" [2014] EWCA Civ 713 (05 June 2014)

Falkonera Shipping Company v Arcadia Energy Pte Ltd, Re "Falkonera" [2014] EWCA Civ 713 (05 June 2014)

Owners' refusal to approve the nominated VLCCs for STS transfer was unreasonable because it was based on a blanket policy against VLCC-to-VLCC transfers and unfounded concerns about mooring arrangements, rather than any specific unsuitability of the nominated vessels or genuine, unmitigable safety risks. The charterparty permitted such transfers, and the Guide did not prohibit them. Owners should have engaged in the planning process rather than refusing approval outright.

Citation
[2014] EWCA Civ 713
Parties
Appellant/claimant: Falkonera Shipping Company; Respondent/defendant: Arcadia Energy Pte Ltd
Jurisdiction
England and Wales
Judgment Date
05 June 2014
Procedural Posture
Appeal (civil) / Court of Appeal Judgment on Appeal From High Court (commercial Court)
Outcome
Appeal dismissed; High Court judgment affirmed.
Legal Topics
Charterparty Interpretation, Ship to Ship Transfer Approval, Reasonableness of Withholding Consent, STS Operations Between Vlccs
Commercial Law Maritime Law Charterparty Interpretation Ship to Ship Transfer Approval Reasonableness of Withholding Consent STS Operations Between Vlccs

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 2 Authorities cited 3 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Parties

Falkonera Shipping Company

Appellant/claimant

Arcadia Energy Pte Ltd

Respondent/defendant

Procedural Posture

Appeal (civil) / Court of Appeal Judgment on Appeal From High Court (commercial Court)

Legal Issues

  1. 1 Whether owners unreasonably withheld approval of another VLCC for ship-to-ship (STS) transfer under the charterparty terms
  2. 2 Proper construction of the approval clause in the STS lightering clause
  3. 3 Whether safety concerns justified refusal of approval

Ratio Decidendi

Owners' refusal to approve the nominated VLCCs for STS transfer was unreasonable because it was based on a blanket policy against VLCC-to-VLCC transfers and unfounded concerns about mooring arrangements, rather than any specific unsuitability of the nominated vessels or genuine, unmitigable safety risks. The charterparty permitted such transfers, and the Guide did not prohibit them. Owners should have engaged in the planning process rather than refusing approval outright.

Court Disposition

Appeal dismissed; High Court judgment affirmed.

Orders

  • Owners' withholding of approval declared unreasonable.
  • Charterers entitled to damages for losses resulting from unreasonable withholding of approval.