The High Court has ruled in on the interim rent that must be paid to Associated British Ports by its tenant of the Immingham Oil Terminal pending the outcome of their ongoing lease dispute. Sales J’s ruling significantly increases the rent that the tenant, Humber Oil Terminals Trustee Ltd (HOTT), a joint venture between oil companies Total and Conoco, must pay.
Central to the case was the amount HOTT must pay ABP in interim rent for the oil jetty at the Immingham Oil Terminal (IOT). ABP proposed an interim rent for the jetty of £24.9m per annum, whereas HOTT proposed an annual rent of £2.3m – less than the £4,045,244 it had been paying.
Setting the main figure almost halfway between ABP and Hott’s figures, Sales J ruled that the interim rent payable by HOTT in relation to the oil jetty is £14,800,306 per annum, plus a further £500,000 for a connected pipeline. He ruled that the interim rent should take effect from 8 April 2010.
The parties had already agreed interim rent payable under other leases of parts of the premises at a total of £316,350.
In the ongoing dispute, HOTT applied to the court under the 1954 Landlord and Tenant Act for the grant of new leases, but ABP opposed the application under section 30(1)(g) on the ground that it intends to occupy the premises for the purposes of its own business.
In July last year, Vos J determined a key preliminary issue in the case in ABP’s favour, ruling that ABP did intend to occupy the premises for business purposes under s30(1)(g). His decision was backed by the Court of Appeal earlier this month.
The interim rent dispute centred primarily on the the jetty lease, with Sales J being asked to decide precisely how it should be valued.
Sales J backed ABP’s argument that there should be an uplift in the rent to represent the value of the prohibition on the charging of ship or goods dues, and rejected HOTT’s claim that only the concrete and steel structure of the jetty fell to be valued. HOTT claimed that the equipment it has installed on the jetty should not be included in the calculation.
However, the judge said: “All the pipelines and equipment are firmly anchored to the oil jetty structure. For legal purposes, they have become part of the oil jetty structure and hence are property owned by ABP, subject to a right of removal by HOTT under the terms of the oil jetty Lease. I reject the bare jetty approach put forward by HOTT.”
Humber Oil Terminals Trustee Limited v Associated British Ports Chancery (Sales J) 18 May 2012
Nicholas Dowding QC, Mr Mark Sefton (instructed by DLA Piper UK LLP) for the Claimant
Christopher Nugee QC, Mr David Holland QC (instructed by Eversheds LLP) for the Defendant
