We can't know exactly what Gensoul's thinking was during the negotiations at Mers-el-Kebir, but it does seem clear that Drachinifel's account (at least as you portray it) is unfair towards him and the French Navy. The breakdown of the negotiations at Oran were the result of a combination of German threats, British inflexibility, mistrust and poor diplomacy, and a degree of French pride and personal loyalty. This post contains elements from earlier questions on similar topics

The armistice between France and Germany was signed on the 22nd June 1940, near the small town of Compiegne (where the armistice that ended WWI had also been signed). Of the armistice's 24 articles, Article 8 concerned the French Navy. It stated that

The French Fleet (with the exception of that part which is left at the disposition of the French Government for the protection of French interests in the colonial empire) will be concentrated in ports to be determined and will be demobilised and disarmed under the supervision of Germany or, respectively, Italy. The peace-time home bases of these vessels will be used to designate these ports.

In other words, the French Navy would have to disarm in French ports under the supervision of the Axis powers. Article 8 also contained assurances that the French Navy would retain control of the disarmed ships, and that the Germans would make no attempt to take control of them or use them for military purposes. On the face of things, this should have been acceptable to the British too, but they did not trust the Germans. In effect, Article 8 placed the French Navy at the disposal of the Germans, and if they chose to break the terms of the armistice and sieze it, there was little the French could do. There was little discussion in British circles of Article 10, though, and it is equally important for understanding the breakdown of negotiations at Oran. Article 10 stated that anyone who left France to fight against Germany would be considered a franc-tireur (essentially, an person unprotected by the laws of war), and forbade the French government transferring any assets to the British. This was a powerful deterrent to anyone considering joining the British. The Germans had inflicted harsh reprisals on franc-tireurs during WWI, and it was clear that such policies would be repeated. While they might not be able to reach those in Britain or in the French West Indies, their families or property in France would be at risk. The thinking of the French Navy in 1940 must be seen in this context. An admiral who joined the British could see his family threatened; one who cooperated with the Germans, but was willing to scuttle his fleet if the Germans tried to sieze it was much safer.

The armistice came into effect on the 25th June. Over the three days between the signing and the implementation of the terms, the British made efforts to work out the French position. British diplomats reported their final conversations before leaving France, British senior commanders made outreaches to their French counterparts, and the Admiralty contacted its French equivalent, the Ministry of Marine. The French response was that they would not let the French fleet fall into German hands; it would be scuttled as soon as the Germans made any attempt to take it over. This was consistently stated, at multiple times and multiple levels within the new Vichy government. This was unacceptable to the British. From their point of view, the French fleet could well be taken over as soon as it returned to ports in France. Even if the fleet remained under French control, the Vichy Government could be pressured into fighting alongside Germany without breaking the armistice terms. This posed a real threat, as the RN did not have sufficient ships to fight off the French and Italian fleets in the Mediterranean. Strengthening the Mediterranean Fleet would weaken Home Fleet, shifting the balance of power in the North Atlantic towards the Germans. From the British perspective, the French fleet had to be put out of Axis hands for certain. Planning began for Operation Catapult, which was intended to seize, disarm or destroy the French fleet in the Atlantic and Mediterranean. On the French side, the plan had drawn up in the days before the armistice terms had been published. On the 20th June, Admiral Darlan, commanding the French Fleet, informed his senior commanders that the fleet was to fight on until instructed otherwise by the French Government. Instructions from other governments were to be ignored, and under no circumstances were intact French ships to be allowed to fall into the hands of the enemy. Final instructions to this effect were circulated to senior French commanders, including Gensoul, by a radio message sent on the 24th. The message instructed the admirals to make preparations to scuttle their fleets in case anyone tried to take them over. If the Germans broke the armistice, interepreted Article 8 differently, or forced different terms from those already in place, then the fleet would be scuttled or sent to the USA. Darlan was consistent in his advocacy of this position in the time between the 20th and the 3rd July. It was consistent with the terms of the Armistice, and thus kept him and his family safe, maintained a degree of independence for France, and would keep the French fleet out of Axis hands. The British, though, had to rely on Darlan's bona fides, which they were unwilling and unable to do. Gensoul was similarly devoted to the policy: on the 24th, he met with Admiral Dudley North, the British admiral in command at Gibraltar, and confirmed that he had no interest in handing over his fleet to the Germans (or the British). North's report on the meeting also indicates that Gensoul had prepared instructions for scuttling the fleet and wrecking the naval base at Oran.

In the Catapult plan, Oran - more specifically, the naval base at Mers-el-Kebir - was the responsibility of Vice Admiral James Somerville, commander of Force H at Gibraltar. He began planning for operations against Mers-el-Kebir on the 30th June, holding a commander's meeting to determine the best course of operations. This determined that, should negotiations fail, a few rounds should be fired as warning shots. If this should fail to persuade the French to agree to British terms, a limited barrage of gunfire and aerial bombing would be used to force the French crews to abandon their ships. Finally, the ships would be sunk by air attack, or by scuttling charges. While several of his officers (most notably Captain Holland of Ark Royal), who had had previous experience with the French, argued that the use of force was unnecessary and inappropriate, it is clear from his thinking that Somerville was seriously considering using force even at this early phase.

On the next day, 1st July, Somerville received the list of British demands from the Admiralty. There were four key parts to Britain's demands. The French fleet could join the British, and fight alongside them. If this was unacceptable, then they could steam to British ports and leave them there. The crews would be returned to France, and the ships would not be used against Germany or Italy unless they broke the terms of the armistice. The third was that the French could demilitarise their ships in place, to the satisfaction of British observers. Finally, if none of the other terms were acceptable, then the French ships must be sunk. Somerville requested clarification to his orders - essentially passing responsibility for the final decision to sink the French fleet to his superiors - before making his final plans. On the afternoon of the 1st, he spoke again with Holland and other officers who felt similarly. Following this, he sent another signal to the Admiralty, suggesting that Holland be sent in to negotiate, as well as suggesting some changes to the demands, to make them more acceptable to the French. The government refused to allow this softening of the demands, or to delay the operation, despite knowing (through intercepted French communications) that the Italians and Germans might be willing to allow the fleet to disarm in place, and that the fleet at Oran was reducing its crews. The War Cabinet met on the evening of the 1st, to reassess the situation. They produced a new set of demands, which would be transmitted to Somerville on the 2nd. These new demands changed the second and third points from the original set. Under the new second point, the ships would not be used by the British only if the French demanded it. British negotiators were not to mention this possibility before the French did. The third point saw the most significant change, calling for the French fleet to be sent to a French port in the West Indies - Martinique was suggested - where it could be disarmed or placed under American supervision. Demilitarisation in place would only be acceptable if suggested by the French, and only as a last resort. Somerville changed this somewhat, adding the possibility of disarmament in place as a component of the British demands.

On the back of fourthman's excellent answer, I'd highly recommend The Road to Oran by David Brown for an even-handed account of the events leading up to Mers-el-Kebir. As deep within the RN establishment as Brown was (he was a Naval Constructor for the Admiralty before becoming a writer I got my David Browns mixed up, regardless my point stands as this David Brown was head of the historical branch at the MoD for 25 years) his account is far more balanced than the conventional histories (that it sounds like Drachinfel is repeating).

He makes several points about the lead-up including:

· Communication between Britain and France was extremely difficult. The French naval headquarters was continually on the move before settling in Nerac. This had been chosen as it was Admiral Darlan's birthplace and was essentially just a country town - the French admiralty was being run out of a local post office for several days. There were times when the French naval attaché in London had to wait 48 hours to send messages to his superiors and another 48 hours to receive replies as they had to be routed through the French embassy in Spain. The Germans were also sending fake messages in Darlan's name confusing matters further.

· The naval attaché in London and Godfroy in Alexandria told the British on numerous occasions that the French admirals commanding the remaining fleets (including Gensoul) were all acolytes of Darlan and would be extremely reluctant to fight on alone without an order from Darlan. Darlan was firm in his position and reiterated this several times to the British and little effort was made to persuade him otherwise.

· For a few days after the signing of the armistice the British government was receiving reports that the Fleet commanders and the colonial governors in Africa were wavering in their support of the French government and would have continued the war if someone in a position of authority in the French government had issued a call to arms. De Gaulle was essentially a nobody and it was really only Darlan who could have changed the situation. Brown writes that, contrary to the belief of Holland and other British officers, Darlan was no longer a "fighting man" instead he was a politician who used the remaining navy as his power base.

· The French position to support the armistice was strengthened as it was believed that a Spanish entry into the war was imminent - particularly concerning to the French as their North African bases were extremely close to Spain, with Morocco as a target for Spanish expansion. A potential defeat by Spain was seen as far more humiliating than a defeat by Germany.

· Knowledge of French on the British side was extremely poor. Multiple communications were sent to France at a what Brown describes as a "school-boy level". There was great difficulty in securing the exact terms of the armistice (the terms of the agreement between France and Italy regarding the French fleet wasn't received until the 28th of June) and when it was received it was misunderstood - the key phrase "under the supervision of Germany" was mistranslated. The French word "contrôle" was translated as "control" rather than as "supervision; there is a large difference between "demobilised under German control" and "demobilised under German supervision" and the British understood the armistice terms as the former while the French saw them as the latter.

· Godfroy's surrender to Cunningham wasn't the result of one afternoon's negotiations as was attempted at Mers-el-Kebir - Cunningham had built a relationship over weeks and it also helped that Godfroy was outside of Darlan's inner circle and felt more free to act. Godfroy was also massively outgunned by the British fleet in Alexandria having only one old battleship; the British government was more concerned about Godfroy opening fire and damaging the port rather than him remaining in the war.