Gunvor International BV and ors v Herculito Maritime Limited and ors (“The Polar”) [2024] UKSC 2

17 January 2024

Ø   Charterers’ agreement to pay insurance premia for war and piracy risks, and their liability to contribute in general average following piracy

Ø   Incorporation of terms of charterparty into bills of lading

Lord Hamblen (delivering the unanimous judgement of the Court) held:

·             A charterer’s agreement to pay the insurance premia for war risk and kidnap and ransom risks does not create an insurance fund or code that absolves the charterer from liability to contribute in general average following piracy, except where the charterer and owner are joint insureds.

·             Incorporation of terms of a charterparty into a bill of lading is determined by the three-stage test, that is:

o     Examine the scope of the incorporation clause in the bill of lading to see if it is wide enough to incorporate the relevant terms of the charterparty. A general incorporation clause will import only the terms as to shipment, carriage, delivery and payment of freight.

o     Examine the relevant terms of the charterparty to see if it makes sense in the context of the bill of lading. Some degree of manipulation is permissible in the case of terms as to (i) shipment, (ii) carriage and (iii) delivery, but not as to other matters (including arbitration) in the absence of clear intention.

o     Check if the prima facie incorporated terms of the charterparty are consistent with the terms of the bill of lading.

Eurobank SA v Momentum Maritime SA & ors [2024] EWHC 210 (Comm)

29 January 2024

Ø   Equitable duties of a mortgagee arresting a ship

HHJ Pelling KC (sitting as a High Court Judge) held:

·             Arresting a ship is not an act of taking possession of a ship.

·             A mortgage has no equitable duty to take reasonable care of the ship unless he takes possession of the ship.

·             A mortgagee has no equitable duty to obtain the true market price for the ship unless he exercises the power of sale.

·             The only general duty of an arresting party is to act in good faith in arresting the ship to obtain security.

On costs:

·             Where the contract allows costs on an indemnity basis, costs will be awarded on that basis.

·             Such costs may be assessed either summarily or by detailed assessment.

·             On indemnity basis, costs may be claimed in excess of the guideline fee for fee earners and of the usual counsel’s fee, but that is subject to reasonableness requirement and the court’s usual discretion to reduce the rate and the hours.