[2025] EWHC 2036 (Comm)

Mr Coldrick submitted that the Court must be satisfied that it was an objectively reasonable decision, in the sense that it was a decision that a reasonable shipowner could reasonably have come to in the circumstances. In this regard he relied upon the decision of Eder J in Falkonera Shipping v. Arcadia Energy[2012] EWHC 3678 (Comm); [2013] 1 Lloyd's Rep. 582 at 597rc [85] by analogy. There the issue was whether the owner, whose prior approval was required, had acted unreasonably in withholding consent to the use of certain vessels in relation to a proposed ship-to-ship transfer to discharge the charterers’ cargo.

At [85] of his judgment, Eder J stated:

“… it is important to note that the question is not whether the owners’ conduct was right (or wrong) but only whether they acted unreasonably in withholding their approval. Thus, the question is not whether the owners’ conclusions that led them to refuse consent were justified, if they were conclusions which might be reached by a reasonable man in the circumstances, even though that conclusion might in fact be incorrect or some other persons might take a different view: see Ashworth Frazer, ibid, page 2183. Thus, I accept the owners’ submission that they were only in breach if no reasonable shipowner could have regarded their concerns as sufficient reason to decline approval.”

The Claimant contended that the relevant assessment related to whether a reasonable shipowner could, in all the circumstances and under considerable pressure of time, reasonably have judged that loading the Neftisa Cargo would give rise to an exposure to sanctions. In Teare J’s first decision in The Triton Lark, he said at [55]:

“…The effect of the clause is that the owners must make a judgment. It must be made in good faith; otherwise, it would not be a judgment but a device to obtain a financial gain. the judgment reached must be objectively reasonable. An owner who wishes to ensure that his judgment is objectively reasonable will make all necessary enquiries. If he makes no enquiries at all it may be concluded that he did not reach a judgment in good faith. But if he makes those enquiries which he considers sufficient but fails to make all necessary enquiries before reaching his judgment I do not consider that his judgment will on that account be judged unreasonable if in fact it was an objectively reasonable judgment and would have been shown to be so had all necessary enquiries been made.”

Relying on this, Mr Coldrick submitted that what ultimately matters here is the objective reasonableness of the outcome or result (i.e. the objective reasonableness of the decision/the judgment), not the process or procedure (i.e. the steps taken or not taken in the decision-making process, the enquiries made or not made). That approach answered the Defendant’s complaints about the absence of sufficient evidence in relation to the Claimant’s decision making process and the contention that the Claimant could and should have taken further and better steps to investigate whether Mr Gutseriev controlled Neftisa.

In relation to burden of proof, Mr Coldrick submitted that where a shipowner makes a judgment that compliance with an order will give rise to an exposure to sanctions and there is a prima facie reasonable basis for that judgment, the evidential burden shifts to the charterer. A prudent shipowner will wish to protect his vessel and its crew. A decision on a serious and important matter such as exposure to risk of breaking the law should be respected by the Court.

Provided there is some prima facie reasonable basis for the judgment, it would be wrong to approach the matter on the basis that the shipowner’s judgment must be regarded as unreasonable unless the contrary is proved. In the alternative he submitted that, it was unlikely that the burden of proof will be of any great assistance in this context.