Altera Voyageur Production Ltd v Premier Oil E&P UK Ltd

Altera Voyageur Production Ltd v Premier Oil E&P UK Ltd

The court held that the worked examples in Section 5 of Appendix M, including Step 6, form part of the parties’ agreement and must be applied as written. There is no clear inconsistency between Article 17.1 and Appendix M, and the court cannot disregard the agreed calculation method even if it produces a commercially debatable result. The parties are bound by the formula they expressly adopted, and Altera is entitled to the sum claimed.

Parties
Claimant: Altera Voyageur Production Limited; Defendant: Premier Oil E&P UK Ltd
Jurisdiction
England and Wales
Judgment Date
17 July 2020
Procedural Posture
Commercial Claim (contractual Dispute) / Trial Judgment
Outcome
Judgment for the claimant
Legal Topics
Contract Interpretation, Hire Adjustment Formula, Force Majeure, Inconsistency Clause, Worked Examples in Contracts
Contract Law Commercial Law Contract Interpretation Hire Adjustment Formula Force Majeure Inconsistency Clause Worked Examples in Contracts

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Parties

Altera Voyageur Production Limited

Claimant

Premier Oil E&P UK Ltd

Defendant

Procedural Posture

Commercial Claim (contractual Dispute) / Trial Judgment

Legal Issues

  1. 1 What is the correct interpretation of the Hire Adjustment Formula in Section 5 of Appendix M of the Charterparty?
  2. 2 Should the worked examples (including Step 6) in Appendix M prevail over the narrative formula?
  3. 3 Is there an inconsistency between Article 17.1 and Appendix M regarding the adjustment of Daily Base Hire?

Ratio Decidendi

The court held that the worked examples in Section 5 of Appendix M, including Step 6, form part of the parties’ agreement and must be applied as written. There is no clear inconsistency between Article 17.1 and Appendix M, and the court cannot disregard the agreed calculation method even if it produces a commercially debatable result. The parties are bound by the formula they expressly adopted, and Altera is entitled to the sum claimed.

Court Disposition

Judgment for the claimant

Orders

  • Altera is entitled to USD 12,108,072.50 plus contractual interest.
  • Parties to agree a Minute of Order; if not agreed, submissions to be filed by specified dates.