TMF Trustee Ltd & Ors v Fire Navigation Inc & Ors [2019]

TMF Trustee Ltd & Ors v Fire Navigation Inc & Ors [2019] EWHC 2918 — 1 November 2019 (Phillips J)

“Under a loan agreement to fund vessel purchases, Lenders served an Acceleration Notice, following which Borrowers failed to pay the amount sought. Lenders relied upon 'No set-off and 'Event of Default' clauses and sought summary judgment. Borrowers alleged (i) that the Notice was invalid, (ii) placing Lenders in breach, (iii) preventing Borrowers' compliance. For the purposes of their application, Lenders accepted (i) to (iii) but relied solely on the 'No set-off' clause which, they said, stopped any application of the 'prevention principle' relied on by Borrowers. The Court held that that clause could not stop Borrowers from arguing that amounts were never due in the first place, therefore the summary judgment application failed, and Borrowers were free to argue their defence.”

Louise Glover
E. G. Arghyrakis & Co.
04th December 2019