M/V Pacific Pearl Co Ltd v Osios David Shipping Inc [2022] EWCA Civ 798 - 14 June 2022 (Lewison LJ, Males LJ, Snowden LJ)

The High Court had found the Britannia LOU, despite its inclusion of a sanctions clause potentially suspending payment, to be in a form “reasonably satisfactory to the other” as required by the agreed ASG 2 form; nevertheless it found the Respondent under no obligation to accept it. The CA disagreed. On proper construction the ASG2 was to operate instead of an arrest and there was no right of arrest once security in in satisfactory form had been provided. An opposite finding, which would have allowed a beneficiary to seek better or alternative security elsewhere, was held contrary to Admiralty practice and the “clear purpose and…language of ASG 2”. The appeal was allowed.