COURT OF APPEAL GIVES STAR PERMISSION IN OIL COMPENSATION CASE

Star Energy has recently been granted permission to appeal Peter Smith J's decision in the case of Bocardo SA v. Star Energy Onshore UK Ltd. [2008] EWHC (ch) 1756. The case affects the assessment of compensation for rights to get oil under the Mines (Working Facilities & Support) Act 1966 and Petroleum (Production) Act 1934. In the earlier case of BP v. Ryder [1987] 2 EGLR 233, the High Court had held that principles of compulsory purchase compensation applied when valuing rights under that legislation, so that the value of the right to the acquirer was to be disregarded. However, Peter Smith J disagreed with Ryder and instead made an award based upon a percentage of the value of the oil obtained. The case also raises novel issues of land law, such as the extent to which a landowner's rights to sue in trespass extends below the surface of his land.

James Pereira (who did not appear in the High Court) has been acting as junior counsel advising Start Energy on its appeal, instructed by Norton Rose solicitors.