Havila Kystruten AS & Ors. v STLC Europe Twenty Three Leasing Limited & Anor.

Havila Kystruten AS & Ors. v STLC Europe Twenty Three Leasing Limited & Anor.

The lessors' election to demand payment of the Termination Sum under clause 28.1(e) precludes them from exercising foreclosure or security rights under clause 7 of the PDSA in respect of the same Termination Event, unless and until a new Termination Event arises from non-payment. Payment into the nominated frozen account constitutes good discharge of the lessee's obligation. The claimants have a real prospect of success on public policy and relief from forfeiture arguments, justifying continuation of the injunction. Reverse summary judgment is refused on Capella but granted on Castor as to the existence of Termination Events.

Parties
Claimant: Havila Kystruten AS; Claimant: Havila Kystruten Operations AS; Claimant: HK Ship III AS; Claimant: HK Ship IV AS; Defendant: STLC Europe Twenty Three Leasing Limited; Defendant: STLC Europe Thirty Four Leasing Limited
Jurisdiction
England and Wales
Judgment Date
08 December 2022
Procedural Posture
Commercial Court Claim / Summary Judgment and Cross Summary Judgment Applications
Outcome
Summary judgment granted in part for claimants; reverse summary judgment granted in part for defendants; interim injunction continued until trial; declaratory relief granted.
Legal Topics
Summary Judgment, Cross Collateralised Ship Finance, Sanctions Enforcement, Contractual Election, Relief From Forfeiture, Payment Into Frozen Accounts, Public Policy and Illegality
Commercial Law Banking and Finance Law Contract Law Sanctions Law Summary Judgment Cross Collateralised Ship Finance Sanctions Enforcement Contractual Election +3 more

Case Brief

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Parties

Havila Kystruten AS

Claimant

Havila Kystruten Operations AS

Claimant

HK Ship III AS

Claimant

HK Ship IV AS

Claimant

STLC Europe Twenty Three Leasing Limited

Defendant

STLC Europe Thirty Four Leasing Limited

Defendant

Procedural Posture

Commercial Court Claim / Summary Judgment and Cross Summary Judgment Applications

Legal Issues

  1. 1 Whether Termination Events occurred under the charters for Capella and Castor vessels
  2. 2 Whether the lessors' election under clause 28.1(e) precludes exercise of clause 7 PDSA rights (the 'election issue')
  3. 3 Whether payment into a frozen nominated account constitutes good discharge (the 'bank account issue')

Ratio Decidendi

The lessors' election to demand payment of the Termination Sum under clause 28.1(e) precludes them from exercising foreclosure or security rights under clause 7 of the PDSA in respect of the same Termination Event, unless and until a new Termination Event arises from non-payment. Payment into the nominated frozen account constitutes good discharge of the lessee's obligation. The claimants have a real prospect of success on public policy and relief from forfeiture arguments, justifying continuation of the injunction. Reverse summary judgment is refused on Capella but granted on Castor as to the existence of Termination Events.

Court Disposition

Summary judgment granted in part for claimants; reverse summary judgment granted in part for defendants; interim injunction continued until trial; declaratory relief granted.

Orders

  • Interim injunction extended until trial preventing enforcement of security or foreclosure by defendants.
  • Declaratory relief granted that lessors' election under clause 28.1(e) precludes exercise of clause 7 PDSA rights for the same Termination Event.