Munin Navigation Company Ltd & Anor v Petrodel Resources Ltd ('Munin Explorer')

Contractual programme maps may provide a default position without creating an immutable obligation to survey every listed line. Where the contract gives the company power to designate survey areas during performance, that power permits reasonable adjustment of the programme without formal contractual amendment, provided the designation remains within the contract’s scope. A contractor which performs work in accordance with the company’s post-contract designation is entitled to payment. The substitution of a vessel under a novation does not alter that construction where the parties agree that technical references to the original vessel are to be read as references to the substitute.

Petrodel engaged Silver Queen Maritime Ltd to conduct a seismic survey using the vessel GEO MARINER. The contract required a minimum acquisition of 1,200 2D sail kilometres and included programme maps in Exhibit A6. After the GEO MARINER became unavailable because of piracy risks, the parties novated the contract to Munin Navigation Company Ltd and substituted the MUNIN EXPLORER, whose deeper draft made some shallow-water lines impracticable.

Munin performed the survey, including lines identified through subsequent communications and an infill programme, and invoiced Petrodel. Petrodel withheld payment, contending that Exhibit A6 required all its listed lines to be surveyed and counterclaiming for non-performance. HH Judge Mackie QC entered summary judgment for Munin in [2011] EWHC 2268 (Comm). The central issue was whether the programme maps fixed the contractual work or operated subject to later designation under the contract.

1. Appeal dismissed. The Court of Appeal unanimously upheld summary judgment for Munin. Lord Justice Longmore gave the leading judgment, with Lord Justices Rimer and Jackson agreeing.
2. Exhibit A6 did not immediately impose an absolute obligation to survey every line shown on the programme maps and no other lines. That would be an uncommercial construction, because clauses 7.1 to 7.3 expressly contemplated that the company would designate survey areas during performance and that its representative would give directions concerning the work programme.
3. The lines in Exhibit A6 constituted a default position where no later designation was made. The company could subsequently designate different or additional lines where, for example, a listed line was unsuitable or another nearby line appeared more promising. Such an adjustment did not require the formal amendment procedure in Exhibit D clause 25.1.
4. The company’s power of designation was subject to limits. A contractor could resist a designation if it endangered the crew or vessel or required the vessel to leave territorial waters. No such issue arose on the evidence.
5. The novation did not change the contractual construction. The parties knowingly substituted the MUNIN EXPLORER, agreed that technical references to the GEO MARINER were to be read as references to the substitute, and proceeded with the contract. After the novation, Petrodel designated lines through the revised programme and infill communications. Munin surveyed those lines and was therefore entitled to payment.
6. Petrodel’s defence and counterclaim were hopeless on the proper construction of the contract. The claim was suitable for summary judgment, and the appeal was dismissed.

• Court of Appeal (Civil Division): The appeal from the summary judgment order was dismissed unanimously.
• High Court of Justice (Commercial Court): HH Judge Mackie QC entered summary judgment for Munin in [2011] EWHC 2268 (Comm).