This model answer for a law-related essay on international business transactions, specifically focusing on the case of 'United Kingdom Supreme Court in Globalia Globalia Business Travel SAU of Spain v Fulton Shipping Inc of Panama (The New Flamenco) [2017] UKSC 43, [2017] 1 WLR 2581,' exemplifies e...
Critically evaluate the decision of the United Kingdom Supreme Court in Globalia Globalia Business Travel SAU of
Spain v Fulton Shipping Inc of Panama (The New Flamenco) [2017] UKSC 43,[2017] 1 WLR 2581
Globalia Business Travel SAU of Spain v. Fulton Shipping Inc of Panama (otherwise known as
The New Flamenco) [2017], was a case heard by the United Kingdom Supreme Court. The
primary issue in the case is whether a contractual clause could limit the ability to cancel a
contract for repudiatory breach. The decision has significant ramifications on international
business transactions, particularly in the area of contractual interpretation. The ruling clarified
the definition of "owner" under English law in the context of bareboat charters, and the
implications of that definition for liability in cases of damage or collision.There were additional
substantial implications for corporate contracts and cross-border business activities, thus the
legal and business community eagerly awaited the decision. This essay offers a critical
assessment of the New Flamenco case ruling, highlighting its relevance for affecting global
corporate deals as well as its influence on other cases. While some claim that the ruling gives
parties entering into commercial contracts more clarity and flexibility, others assert that it might
not have much of an effect on those transactions. This essay makes the case that, while the
New Flamenco decision does hold a number of benefits for parties and commercial contracts
and does have considerable implications for liability in cases of damage or collision that involve
bareboat-chartered vessels, the true scope of of the impact in this area is still to be determined
due to noticeable lack of application due to the particular nature and focus of the decision.
The court's strategy in Globalia is supported by case law like Arnold v Britton [2015], which
defined the rules guiding the interpretation of commercial contracts which was later followed and
applied in Globalia. The court did maintain the necessity test for implied terms, stating that a
term can only be implied if it is required to give the contract business effectiveness or to reflect
the parties' presumptive intention. The court also held that the limitation of liability under Article
III(2) of the Hague-Visby Rules applied through the Carriage of Goods by Sea Act 1971, since
, Candidate Number: 216820
Critically evaluate the decision of the United Kingdom Supreme Court in Globalia Globalia Business Travel SAU of
Spain v Fulton Shipping Inc of Panama (The New Flamenco) [2017] UKSC 43,[2017] 1 WLR 2581
the shipper had not declared a higher value for the yacht. As a result, the test for implied words
can be applied with more consistency and a ‘welcome degree of clarity’1 and reaffirms the
importance and applicability of the Rules in conjunction with ruling in Globalia. The court's
strategy in Globalia is similarly supported by previous case law such as the case Elena D’Amico
[1980] and Hussey v Eels [1990] of which clarified the threshold for assuming a term into a
commercial contract. Overall, it is clear that the judgement in Globalia has codified and
expanded on previous case law and has had major and pervasive ramifications on the decisions
and rulings that proceed, giving parties dealing with commercial contracts greater understanding
and clarity. The body of case law above supports the court's approach and its practicality in
dealing with an issue which is far from ‘straightforward’2. The significance of this ‘clear and
concise’3 judgement is that the courts now have a structured and streamline profile to follow in
future cases and can apply the decision in Globalia to such cases and provide a result like seen
in this case which was ‘commended’4 by commentators like Lara Hicks for the use of a ‘leaner
basis to rationalise’5 the facts of the case. Despite the lack of direct application of this approach
in subsequent cases the ‘rationale’6 that was established the decision will provide the courts
with far greater ‘clarity’7 in the future.
The result in Globalia indicates a major divergence from conventional English contract law
standards and has been hailed as a historic case. Lord Clakre rejected the ‘difference in kind’8
test and the test used in Globalia can be deemed to be ‘narrower’9 than Haldane’s test used in
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