In Dolphin Tanker SRL v Westport Petroleum Inc (the "Savina Caylyn") QBD – 21 October 2010, the High Court reviewed the decision of London arbitrators which considered which companies should be considered as oil majors.
The "Savina Caylyn" had been chartered on a Shelltime 4 form for a five year period. Clause 50 of that charter stated:
"should the vessel be failed on three consecutive oil major vetting reviews/inspections due to Owner's/vessel's reason, the Charterers ... shall have the option to cancel the charter ...A vetting review/inspection is defined as a nomination by the Charterers to an oil major and the oil major reviewing the vessel by either a physical inspection or latest SIRE inspection report".
The Charterers terminated the charterparty on the basis that there had been ten consecutive qualifying rejections which met the criteria in Clause 50 of the charter. Only three of these were relevant to this dispute. The Owners rejected that argument by asserting that the expression 'oil major' in Clause 50 should be restricted to five named companies who had been referred to in an earlier part of the clause. These were BP, Shell, ExxonMobil, Chevtex and Total Fina Elf, but it did not include ConocoPhillips. The rejection by ConocoPhillips had been one of the qualifying rejections relied upon by the Charterers to bring themselves within Clause 50. The sequence of the rejections is not reported. The Charterers in response said that the oil majors meant one of the six established oil majors as generally understood, i.e. the five companies named in the earlier part of the Clause plus ConocoPhillips.
The Owners also said that there had not been three consecutive failures. There had been a "pass" of the vessel given by one oil major at some point in that chain. The pass which the Owners relied upon was one given to the vessel as a result of the unilateral approach to BP. It was not as a result of a nomination of BP by the Charterers. That pass was relied upon to interrupt the run of failures. The Charterers in response said that any pass had to be the result of a vetting review of inspection following a nomination by Charterers to a particular oil major in line with the clause.
The arbitrators, held that Charterers were entitled to terminate the charterparty. Their view was that the expression 'oil major' in Clause 50 of Shelltime 4 referred to all the six recognised majors including ConocoPhillips. The BP pass did not affect that series of rejections because it had not resulted from a nomination by the Charterers. It was something the owners had commissioned "off their own back".
The Owners appealed but the Court decided the arbitrators had approached the matter correctly and dismissed the appeal.
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