BP Oil UK Ltd & Ors v Lloyds Tsb Bank Plc

BP Oil UK Ltd & Ors v Lloyds Tsb Bank Plc

The option agreement required that all three oil companies, as 'the Purchaser', must be the registered proprietors of the lease at the time of exercising the option, but did not require continuous ownership throughout the option period. The put option did not cease to be exercisable permanently upon assignment; it became exercisable again upon re-assignment to the original parties.

Parties
Claimant: BP Oil UK Limited; Claimant: BP Fuels Marketing Limited; Claimant: Mobil Exploration and Production UK Limited; Defendant: Lloyds TSB Bank plc
Jurisdiction
England and Wales
Judgment Date
21 December 2004
Procedural Posture
Civil Appeal / Appeal From High Court Judgment
Outcome
Appeals dismissed
Legal Topics
Option Agreements, Lease Assignment, Interpretation of Contracts
Contract Law Property Law Option Agreements Lease Assignment Interpretation of Contracts

Case Brief

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Parties

BP Oil UK Limited

Claimant

BP Fuels Marketing Limited

Claimant

Mobil Exploration and Production UK Limited

Claimant

Lloyds TSB Bank plc

Defendant

Procedural Posture

Civil Appeal / Appeal From High Court Judgment

Legal Issues

  1. 1 Whether the exercise of the put option was valid when the lease was not vested in all three oil companies at the time of notice
  2. 2 Whether the put option ceased to be exercisable once the lease had been assigned and then re-assigned to the original parties

Ratio Decidendi

The option agreement required that all three oil companies, as 'the Purchaser', must be the registered proprietors of the lease at the time of exercising the option, but did not require continuous ownership throughout the option period. The put option did not cease to be exercisable permanently upon assignment; it became exercisable again upon re-assignment to the original parties.

Court Disposition

Appeals dismissed

Orders

  • Appeals dismissed including appeal on costs
  • Defendants to pay two-thirds of claimants' costs of and occasioned by both appeals, subject to detailed assessment on standard basis if not agreed