On appeal from: [2015] EWCA Civ 16

This appeal arises out of the grounding of the Ocean Victory. 

In 2006, whilst under a time charter from bareboat charterers to the respondent and a sub-time charter from the respondent to a third party, the vessel was ordered to Kashima, Japan to discharge a cargo of iron ore. Swell and high winds led the Master of the vessel to halt the discharging operation and attempt to leave the port, whereupon the vessel was driven back by the prevailing conditions into the breakwater wall and became a total loss.

The appellant, the hull insurer and assignee of the bareboat charter, brought a claim against the respondent for damages for breach of a safe port warranty in the time charter. The respondent joined the third party to the proceedings on the basis that any liability it had to the appellant would be passed down the contractual chain to the third party.

Held: on the basis of evidence, the conditions in question were an abnormal occurrence and there was therefore no breach by the appellant/third party of the safe port warranty (unanimously).

Had there been a breach of the warranty, it was well established that coinsureds cannot claim against each other in respect of an insured loss (by majority).

The third party would not be entitled to limit its liability for loss of the ship pursuant to the 1976 Convention on Limitation of Liability for Maritime Claims, enacted into English law by the Merchant Shipping Act 1995, giving the words in the Convention their ordinary meaning (unanimously).

For judgment, please download: [2017] UKSC 35
For Court’s press summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII

To watch the hearing, please visit: Supreme Court website (1 Nov 2016 morning session), (1 Nov 2016 afternoon session), (2 Nov 2016 morning session), (2 Nov 2016 afternoon session), (3 Nov 2016 morning session), (3 Nov 2016 afternoon session)