Lloyd's Shipping & Trade Law

Glencore Energy UK Ltd v Transworld Oil Ltd (The ‘Narmada Spirit’) [2010] EWHC 141 (Comm)

Papas Olio JSC v Grains & Fourrages SA and FOSFA [2009] EWCA Civ 1401

Insurance contracts often contain provisions calling upon the insured to maintain a certain pattern of behaviour or state of affairs failing which cover will cease automatically. In English law they are called ‘warranties’ albeit warranties cover encompass other situations as well. Warranties are familiar to readers of Shipping and Trade Law because they originated and are common in marine insurance. When used responsibly they have public policy benefits strongly advocated by economists because they can be used as a tool to classify risk and also as a means of encouraging risk decreasing behaviour and the converse. But in some jurisdictions such as New Zealand these tools are condemned by law where the actual loss to the individual insured was not in the event caused by non-compliance with the provision. The justification for this intervention is that the legal results where there is no causal link are ‘wrong and unjust’, unfair, ‘Draconian’ or contrary to the ‘reasonable expectations’ of the policyholders.

AP Moller-Maersk A/S v Sonaec Villas Cen Sad Fadoul [2010] EWHC 355 (Comm)

Having found discrepancies in the documents presented, an issuing bank could take the view that merely serving a notice is sufficient for rejection, since art 16(c)(iii) of UCP 600 does not call for any further actions to be taken. However, in Fortis Bank SA/NV v Indian Overseas Bank [2010] EWHC 84 (Comm) the English court chose to imply a term requiring the banks to act in accordance with their documentary disposal statements, failing which they will be precluded from relying on the discrepancies. In so doing, the courts have made the draconian remedy of preclusion available in order to urge the banks to comply with ‘the best practice and reasonable expectations of experienced market practitioners’.

Vitol SA v Capri Marine Ltd (No 2) (The ‘Thor’) [2010] EWHC 458 (Comm)

Al Dawood Shipping Lines Ltd v Dynastic Maritime Incorporated (The MT ‘Napa’) [2010] EWCA Civ 104

Masefield AG v Amlin Corporate Member Ltd [2010] EWHC 280 (Comm)

Economic duress - letter of credit - time to open letter of credit in relation to commencement of loading - waiver