Claimant Owners chartered the vessel “SAVINA CAYLYN” to the Defendant Charterers on an amended Shelltime 4 form, clause 50 of which allowed Charterers to place the vessel off-hire or alternatively terminate the charter, if the vessel failed three consecutive oil major vetting inspections or reviews. Charterers gave notice of cancellation after ten consecutive rejections, and a sole arbitrator held that they were entitled to do so. Dolphin Tanker Srl v Westport Petroleum Inc (The MT “Savina Caylyn”) [2010] EWHC 2617 (Comm) was the hearing of Owners’ appeal.  

In dismissing the appeal, the Court commented on three of the major concepts which the arbitrator had been required to interpret:

  1. The meaning of the term “oil major”. The Court held that this was to be given its natural and ordinary meaning, in that it referred to the six main international oil majors, and not just to the five listed in the relevant charter clause.  
  2. The meaning of “three consecutive inspections”. This was at issue because BP had given the vessel a “pass” inspection not following a nomination by Charterers to BP, but at Owners’ initiative. The Court held that the definition of “inspection” under the charterparty meant one that had been initiated by Charterers’ nomination of the vessel to the oil major in question.  
  3. The charterparty defined an inspection as a review by an oil major by either physical inspection, or inspection of the latest SIRE Report. The judge disagreed with Owners that Charterers must prove that the latest SIRE Report was either the effective cause of or an effective cause of rejection. As the reasons for rejection were not usually clear, it was sufficient to show that the SIRE Report was considered as part of the nomination process.