Falkonera Shipping Co v Arcadia Energy Pte Ltd

Falkonera Shipping Co v Arcadia Energy Pte Ltd

The charter did not preclude STS transfers between VLCCs. Owners' withholding of approval for the Frontline Vessels was unreasonable and constituted a breach of contract, as their concerns were not justified by the Guide, vessel characteristics, or operational risks, and the nominated vessels were suitable for STS operations.

Parties
Claimant: Falkonera Shipping Company; Defendant: Arcadia Energy Pte Ltd
Jurisdiction
England and Wales
Judgment Date
20 December 2012
Procedural Posture
Commercial Shipping Dispute / Judgment on Liability
Outcome
Owners found in breach of charter for unreasonably withholding approval of Frontline Vessels for STS transfer.
Legal Topics
Charterparty Interpretation, Ship to Ship Transfer Approval, Reasonableness of Withholding Consent, Breach of Contract
Maritime Law Contract Law Charterparty Interpretation Ship to Ship Transfer Approval Reasonableness of Withholding Consent Breach of Contract

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Parties

Falkonera Shipping Company

Claimant

Arcadia Energy Pte Ltd

Defendant

Procedural Posture

Commercial Shipping Dispute / Judgment on Liability

Legal Issues

  1. 1 Whether STS transfers between VLCCs were precluded under the charter
  2. 2 Whether Owners acted reasonably in withholding approval of Frontline Vessels for STS transfer

Ratio Decidendi

The charter did not preclude STS transfers between VLCCs. Owners' withholding of approval for the Frontline Vessels was unreasonable and constituted a breach of contract, as their concerns were not justified by the Guide, vessel characteristics, or operational risks, and the nominated vessels were suitable for STS operations.

Court Disposition

Owners found in breach of charter for unreasonably withholding approval of Frontline Vessels for STS transfer.

Orders

  • Further hearing required to determine quantum and consequences of breach.
  • Counsel to agree order on costs and directions; court to resolve any outstanding issues.