SY RoRo 1 Pte Ltd and SY RoRo 2 Pte Ltd v Onorato Armatori srl, F.LLI Onorato Armatori srl, Moby SpA, and Compagnia Italiana Di Navigazione SpA [2024] EWHC 611 (Comm)

21 March 2024

Ø   Bareboat charter by way of financing.

Ø   Termination sum in the amount of hire for the balance of the original charter period upon termination of bareboat charter and withdrawal of the vessel.

Ø   Relief against forfeiture in favour of a sub-charterer (bareboat) upon termination by the owner of the head charter.

Ø   Specific performance against a charter guarantor in respect of redelivery obligation.

Sir William Blair J held:

·             In a bareboat charterparty that allows the owner to terminate the charter upon the occurrence of an agreed termination event (which is not a breach of the contract) and claim a termination sum in the amount of the hire for the balance of the original charter period, the owner may do so.

·             A bareboat charter creates possessory rights in favour of the charterer.

·             In a series of back-to-back bareboat charters, when the owner rightfully terminates the head charter, whether for breach or other reasons, the court has the discretion to grant a sub-charterer relief against forfeiture by imposing a new bareboat charter directly between the owner and the sub-charterer on such terms as the court thinks fit.

·             However, in the interests of certainty in commercial contracts, the court would rarely exercise the discretion in bespoke commercial contracts.

·             A court might refuse to grant specific performance against a guarantor who guarantees the performance and payment obligations of a charterer in respect of the charterer’s obligation to redeliver the vessel and treat the guarantee rather as monetary one in the usual way.

Observation:

·             The head bareboat charters in this case were by way of financing. The judge raised a question whether the principle that a mortgagee’s interest in the security is limited to the amount of the advance and costs, etc, and the balance has to be accounted for to the mortgagor might affect the present case. But that was not argued or explored at the hearing, and the Judge did not say anything further on it beyond raising it.

Zurich Insurance Company Limited (trading as Navigators and General), Daniel Skordis, and Luadem Single Member Private Company v Halcyon Yacht Charter LLP, and all other persons claiming to have suffered loss and damage by reason of the fire onboard the yacht “BIG KAHUNA” at Gouvia Marina, Corfu on 7 September 2022 [2024] EWHC 937 (Admlty)

25 April 2024

Ø   Limitation claim

Ø   Stay of limitation claim in favour of foreign jurisdiction

Ø   Appropriate forum to try the limitation claim

Admiralty Registrar Davison held:

·             When considering whether a limitation claim commenced in England in respect of a fire casualty that happened in in a foreign jurisdiction should be stayed in favour of the foreign jurisdiction, the burden is on the defendant (the stay applicant) to show the court that the foreign jurisdiction is available and the “more appropriate forum” to try the limitation claim and not merely that England is not the natural or appropriate forum.

·             That is a mirror image of the burden on a claimant applying for permission to serve the claim form out of the jurisdiction to show the court that England is the most appropriate forum to try the claim.

·             In deciding the question which is the more appropriate forum, in the context of a limitation claim, consideration will be limited to factors connected with the limitation claim itself, and the factors connected to the underlying claims will not be considered – the two are distinct.

·             Hence, availability of witnesses and evidence in respect of the casualty in the place of the casualty is not relevant to the question which is the more appropriate forum to try the limitation claim.

·             The fact that the casualty happened in a place, and must be tried subject to the law of that place, which is the natural and more appropriate forum to try the underlying claims, does not make that place the more appropriate forum to try a limitation claim.

·             There are only two issues in a limitation claim under LLMC 1976: (i) the quantum, which is arithmetically calculated and rarely disputed, and (ii) Art 4 defence, which is seldom raised due to its very high threshold to invoke.

·             It is commonplace for the limitation claim and the underlying claims to be tried in different jurisdictions.

·             Choice of forum is for the limitation claimant, who has the liberty to choose his domiciliary jurisdiction to have his limitation claim tried. This is a settled practice that a court would be exceedingly slow to interfere with.

·             The size of the applicable limitation amounts in different jurisdictions is irrelevant when considering which is the more appropriate forum. A limitation claimant is entitled to take advantage of the lower limit in a jurisdiction, unless that forum is not the appropriate forum for any other reason.

·             The fact that a foreign court may not recognise an English limitation decree or that the foreign court may decide question of limitation in parallel is not relevant to the question which is the more appropriate forum and is no ground to grant a stay.

·             On the facts of the case, the court refused the stay application.