This question is really testing two separate ideas: (1) whether flow direction matters when one side is a condensing, isothermal stream, and (2) which side of the exchanger the process stream should go on. Let's assess each option.
With the steam condensing isothermally, the meaningful choice comes down to stream placement, and putting the process stream on the shell side with a counter-current arrangement is the best practice here.
Therefore, the correct answer is counter flow with process stream on shell side.