
Case Summaries
Sea Master Shipping Inc v Arab Bank (Switzerland) Ltd [2018]
“In a London arbitration involving a bank to whose order the bills of lading had been consigned, shipowners sought demurrage. The Court allowed shipowners' challenge to the Tribunal's ruling that the bank received rights but not liabilities under the bills so that claims against it were not arbitrable. The Court did not rule on the demurrage or the extent of liabilities, referring these issues back to the Tribunal.”
Shagang Shipping Company Ltd v HNA Group Company Ltd [2018]
“H, the guarantor of a long-term time charter, faced a USD68.Sm claim from S after charterers failed to perform. H argued that both charter and guarantee were unenforceable, being procured by bribery, evidenced by individuals' confessions. S said the confessions resulted from torture. All relevant parties and events were in the PRC. The 1st instance Judge found no bribery and that neither the confession nor torture evidence was reliable. The CA ruled that the Judge should first have decided upon the torture, so his finding on bribery was unsound. In the unusual circumstances, the matter was remitted to another 1st instance judge to consider the evidence afresh.”
Sixteenth Ocean GmbH & Co Kg v Societe Generale [2018]
“After the intervention of US sanctions, a USD35.5m shipbuilding loan concluded with IRISL subsidiaries was terminated and called in by the lenders. The sums due — including a 'termination amount' demanded on 9 June 2010 — were repaid by the subsidiaries on 14 December 2010 and irretrievably distributed between lenders by 5 January 2011. On 10 January 2017 the claimant subsidiary started proceedings alleging that the 'termination amount' was never due, having been paid under economic duress, and sought damages for breach of contract or in restitution. The Court held that any breach occurred on 9 June 2010 and any unjust enrichment between 14 December 2010 and 5 January 2011, so that on any view the 6-year Limitation Act period had expired. Nor could it be extended under s.32, economic duress not constituting 'fraud' and there being no deliberate concealment of the distribution.”
Seadrill Ghana Operations Ltd v Tullow Ghana Ltd [2018]
“By a 5-year 2013 contract, Seadrill agreed to provide drilling services to Tullow by a semi-submersible tug, in specified sea areas off Ghana. In2014, an UNCLOS tribunal ordered Ghana to stop drilling with the effect that from late 2016 Tullow would not be able to exploit the relevant areas. Tullow ceased to pay hire and terminated the contract relying on a term excusing performance if fulfilment of the contract was delayed or prevented by defined 'force majeure' events. The Court found that although there was a force majeure event as defined (drilling moratorium) it had to be the sole cause of the party's failure to perform. Here however there were two concurrent causes preventing performance and the other (government failure to approve a wider plan), was held to be the effective one.”
Fehn Schiffarhts GMBH & Co KG v Romani Spa [2018]
“Owners challenged an arbitration award which held them liable to charterers in damages representing loss of value of the cargo following unauthorised fumigation. After the damage, receivers had assigned rights to charterers. If, as appeared, that assignment had been the basis of the tribunal's ruling, they had erred in law in not first making any finding that the receivers had sustained loss (an assignee not being able to acquire rights greater than those of the assignor); if charterers in their own right had suffered the loss (as alternatively argued), this too was not apparent from the award, which the Court ordered should be remitted to the tribunal for further consideration.”
London Arbitration 15/18
“The Tribunal found that Sellers had exceeded the contractually specified period of delay, such that Buyers were entitled to terminate a shipbuilding contract and recover the instalments advanced; The Tribunal rejected Sellers' contentions for an implied term as to mutual co-operation and non-impeding, or the application of the 'Prevention Principle' on the grounds that the sophisticated express terms left no room for such provisions.”