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Geden Operations Ltd v Dry Bulk Handy Holdings Inc (M/V "Bulk Uruguay")

In the Bulk Uruguay, Popplewell J considered the correct test for anticipatory breach by renunciation when a party makes it clear that its ability to perform is wholly dependent on the actions of an independent third party.  The dispute arose in the context of a time charter between charterers and disponent owners under which the charterers were permitted to order the vessel through the Gulf of Aden without obtaining the prior consent of disponent owners.  However, the disponent owners subsequently informed the charterers that under the terms of the head charter the disponent owners were required to obtain consent from head owners for any transit of the Gulf of Aden and that the usual position of the head owners would be to refuse.  Popplewell J rejected the submission that by the very fact of not being back-to-back the disponent owners had put it out of their power to perform the charterparty and thereby evinced an intention not to perform.  He held that the correct test required an assessment of the likelihood that head owners would give consent.  The tribunal concluded that the head owners might or might not refuse an order to transit the Gulf of Aden and that the disponent owners had not therefore renounced the contract. This was a finding of fact and so the charterers’ appeal under s69 of the Arbitration Act 1996 was dismissed.

Charles Kimmins QC and Thomas Corby acted for the Claimants (instructed by Lax & Co LLP)

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