Singapore Arbitration 2/19

Singapore Arbitration 2/19

“Under a contract for sale and purchase of a vessel, with an NSF type "encumbrances clause" (9), Sellers disputed liability to pay a bunker claim incurred by prior bareboat sub-charters. After the (post-delivery) arrest of the vessel in the Philippines, Buyers settled the claim and started arbitration proceedings seeking an indemnity from Sellers. The tribunal found that the claim in itself did not give rise to a breach of clause 9, as it was not an in rem debt against the vessel (and bareboat sub-charterers had no authority to create a lien); however, the pre-delivery issue by them of an (un-served and unknown to Sellers) in rem writ in Singapore did place Sellers in breach of clause 9, rendering them liable to indemnify Buyers.”

Antonino Cordopatri
E. G. Arghyrakis Co.
04th April 2019