Falkonera Shipping Company v Arcadia Energy Pte Ltd, Re "Falkonera"

Falkonera Shipping Company v Arcadia Energy Pte Ltd, Re "Falkonera"

Owners' refusal to approve the nominated VLCCs as receiving vessels for ship-to-ship transfer was unreasonable because it was based on a general aversion to VLCC-to-VLCC transfers and not on any specific unsuitability or safety issue with the nominated vessels; the charterparty permitted such transfers, and the planning process would address operational risks.

Parties
Appellant/claimant: Falkonera Shipping Company; Respondent/defendant: Arcadia Energy Pte Ltd
Jurisdiction
England and Wales
Judgment Date
05 June 2014
Procedural Posture
Civil Appeal / Judgment on Appeal From High Court (commercial Court)
Outcome
appeal dismissed
Legal Topics
Charterparty, Ship to Ship Transfer, Reasonableness of Withholding Approval, Interpretation of Contract Clauses
Commercial Law Maritime Law Charterparty Ship to Ship Transfer Reasonableness of Withholding Approval Interpretation of Contract Clauses

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Parties

Falkonera Shipping Company

Appellant/claimant

Arcadia Energy Pte Ltd

Respondent/defendant

Procedural Posture

Civil 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 transfer under the charterparty terms
  2. 2 Proper construction of the approval clause in the charterparty
  3. 3 Whether refusal based on vessel type or operation planning is reasonable

Ratio Decidendi

Owners' refusal to approve the nominated VLCCs as receiving vessels for ship-to-ship transfer was unreasonable because it was based on a general aversion to VLCC-to-VLCC transfers and not on any specific unsuitability or safety issue with the nominated vessels; the charterparty permitted such transfers, and the planning process would address operational risks.

Court Disposition

appeal dismissed

Orders

  • Appeal dismissed; judgment of the High Court affirmed.