Inta Navigation Ltd and Anr v Ranch Investments Ltd and Anr – QBD (Com Ct) (Teare J) – 5 June 2009

Sale of ship – Right of first refusal – Buyers concluding MOA with sellers on Norwegian Saleform terms for purchase of a newbuilding – MOA conferring right of first refusal on buyers to purchase second newbuild vessel – Sellers giving notice to buyers of sale of second newbuild to third party on novation terms – Buyers exercising right of first refusal – Whether resulting contract on Norwegian Saleform terms or on novation terms

By a MOA on the Norwegian Saleform dated 26 November 2004 Inta Navigation Ltd and Genel Denizcilik Nakliy Ati AS (collectively “Geden”) agreed to sell to Ranch Investments Ltd and Wah Kwong Shipping Holdings Ltd (collectively “Wah Kwong”) Hull No S271, a 159,000 dwt crude oil tanker under construction by Hyundai pursuant to a shipbuilding contract dated 29 December 2003. The purchase price under the latter contract was US$48,500,000. The purchase price under the MOA was US$70,500,000. The MOA provided for a deposit of 10% of the sale price to be paid within 5 banking days from the date of the sale agreement, with the balance on delivery at Hyundai’s yard.