New Judgment: Petroleo Brasileiro SA v ENE Kos 1 Limited  UKSC 17
02 Wednesday May 2012
On appeal from:  UKSC 17
The appellant had time-chartered their ship to the respondent on a 36 month lease. After the respondent failed to make a payment the ship was withdrawn, but at the time was laden with cargo. The cargo was not unloaded immediately as the respondent had sought to persuade the appellant to cancel the withdrawal, and as a consequence the ship was detained for cargo unloading longer than it would have been otherwise. The appellant claimed from the respondent the cost of the service of the ship whilst it was detained on the basis of i) the express terms of an indemnity in the charterparty, ii) under the terms of a new contract entered into after the withdrawal, iii) on the grounds of unjust enrichment and iv) under the law of bailment.
The Supreme Court unanimously allowed the appeal, restoring the High Court’s order of allowing the claim on the last basis alone. The leading judgment states that the indemnity clause in the charterparty applied as the detention of the vessel was not an ordinary incident of the chartered service nor a risk the appellant had assumed under the contract. Despite dissenting on this point L Mance agreed that in any case the claim would succeed under the law of bailment.