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Court of Appeal upholds decision that owners were entitled to repossess vessels following designation of the charterers’ principal as a terrorist by the U.S. authorities

4th Aug 2022

OCM Maritime Nile & Anr v Courage Shipping Co & Ors [2022] EWCA Civ 1091

Robert Bright QC and Charles Holroyd successfully represented the owners of two vessels in this appeal brought by bareboat charterers against a decision of Sir Andrew Smith.  The dispute arose following the designation by the U.S. authorities of the sole shareholder and director of the charterers as a terrorist.  It was common ground that this gave rise to an Event of Default under the bareboat charters and that the owners had validly terminated the charters on account thereof.  Both the trial and the appeal were expedited.

There were two issues on the appeal.  The first was whether, as a matter of construction, the owners were entitled to repossess the vessels without serving a notice under Clause 46 of the charters requiring the charterers to pay the “Outstanding Principal” and “Indemnity Sum” and without the charterers failing to make payment accordingly.  The second was whether relief from forfeiture should be granted.

The Court of Appeal upheld the judgment of Sir Andrew Smith on both issues, holding that the owners were not required to serve a notice under Clause 46 and that this was not a case in which relief from forfeiture would be appropriate.

Robert Bright QC and Charles Holroyd were instructed by Reed Smith LLP (Charlie Weller and CJ Kim).

Please read the judgment here