AS Klaveness Chartering v Pioneer Freight Futures Co Ltd & Anor [2009] EWHC 3386 (Comm) (18 December 2009)

AS Klaveness Chartering v Pioneer Freight Futures Co Ltd & Anor [2009] EWHC 3386 (Comm) (18 December 2009)

The court held that there was a binding agreement to set off the December and January settlements, supported by consideration and evidenced in writing, and/or a collateral contract or equitable forbearance preventing PFF from relying on technical defaults. No Event of Default or Potential Event of Default precluded Klaveness's claim. PFF was in default for non-payment of the January settlement, entitling Klaveness to serve a cure notice, fix an Early Termination Date, and recover its Losses under the Master Agreement. Judgment was given for Klaveness for the full amount claimed.

Citation
[2009] EWHC 3386 (Comm)
Parties
Claimant: AS Klaveness Chartering; First Defendant: Pioneer Freight Futures Co., Ltd; Second Defendant: Pioneer Metals Co., Ltd
Jurisdiction
England and Wales
Judgment Date
18 December 2009
Procedural Posture
Commercial Claim for Sums Due Under Forward Freight Agreements and Guarantee / High Court (commercial Court) Judgment After Trial
Outcome
Judgment for the claimant (Klaveness) against PFF for the full amount claimed and against PM for US$10 million under the guarantee.
Legal Topics
Forward Freight Agreements, Guarantee, Set Off, Novation, Default and Termination Under ISDA Master Agreement, Collateral Contract, Equitable Forbearance
Commercial Law Contract Law Forward Freight Agreements Guarantee Set Off Novation Default and Termination Under ISDA Master Agreement Collateral Contract +1 more

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Parties

AS Klaveness Chartering

Claimant

Pioneer Freight Futures Co., Ltd

First Defendant

Pioneer Metals Co., Ltd

Second Defendant

Procedural Posture

Commercial Claim for Sums Due Under Forward Freight Agreements and Guarantee / High Court (commercial Court) Judgment After Trial

Legal Issues

  1. 1 Whether sums were due under FFA contracts and guarantee
  2. 2 Whether set-off of December and January settlements was agreed and effective
  3. 3 Whether there was an Event of Default or Potential Event of Default under the Master Agreement

Ratio Decidendi

The court held that there was a binding agreement to set off the December and January settlements, supported by consideration and evidenced in writing, and/or a collateral contract or equitable forbearance preventing PFF from relying on technical defaults. No Event of Default or Potential Event of Default precluded Klaveness's claim. PFF was in default for non-payment of the January settlement, entitling Klaveness to serve a cure notice, fix an Early Termination Date, and recover its Losses under the Master Agreement. Judgment was given for Klaveness for the full amount claimed.

Court Disposition

Judgment for the claimant (Klaveness) against PFF for the full amount claimed and against PM for US$10 million under the guarantee.

Orders

  • PFF to pay Klaveness US$30,517,912.25
  • PM to pay Klaveness US$10,000,000 under the guarantee