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“Ocean Victory”

22nd Jan 2015

The Ocean Victory was “a remarkable maritime casualty”, the vessel rendered a total loss whilst leaving Kashima in a strong northerly gale. The vessel left due to difficulties at berth caused by long waves. The Judge below found in favour of the owners/demise charterers: the port was unsafe and the whole loss was recoverable from time charterers. The Court of Appeal has now reversed the Judge’s findings on both points.

First, the Court of Appeal held that the port was not unsafe and the charterers were not in breach of their safe port undertaking. It reconsidered the meaning of “abnormal occurrence” in the classic test for a safe port. The rare concurrence of two individually not rare events (strong northerly gale and long waves) was an abnormal occurrence for which charterers were not responsible, even if each event separately may have been characteristic of the port. The test is to be directed at a single unitary question: was the simultaneous coincidence of the two critical features an abnormal occurrence, or a characteristic of the port?

Second, the claim against time charterers was advanced by assignees of demise charterers, in respect of the demise charterers’ alleged liability to owners for the loss of the vessel in breach of a safe port undertaking. The Court of Appeal held that the Barecon demise charter excluded rights of recourse between owners and demise charterers, in favour of an insurance-funded solution. The parties to the demise charter had agreed to look to the required hull insurance and not to each other in the event of a total loss. As such demise charterers had no liability to owners for such losses which they could pass on to time charterers.

To view the judgment please click here.

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