Kyla


  • Date: 01/01/2012

Following a major collision in 2009 the Member declared the ship to be a constructive total loss (“CTL”) and terminated its charter with Bunge. Bunge disputed that the ship was a CTL and challenged the Member’s termination of the charter. The Member brought a claim in London arbitration proceedings for a declaration that the charter was frustrated and Bunge counter-claimed for damages of over $9 million.

The arbitrator held that the Member had not undertaken to repair the ship up to the level of the ship’s insured value. Bunge appealed to the English High Court and Mr Justice Flaux held that the charterparty created an assumption of risk and responsibility for the Member to repair hull damage up to the ship’s stated insured value of $16m notwithstanding her market value of some $5.75m. Mr Justice Flaux refused leave to appeal. The Member applied directly to the Court of Appeal in order to ask that court to exercise its residual jurisdiction to set aside the refusal of leave to appeal. The Court of Appeal declared that it had no jurisdiction to hear the Member’s application as the High Court had held that “the case was not a case of general importance”. Lord Justice Longmore stated that the residual jurisdiction to set aside a refusal of leave to appeal was only exercisable in cases in which the refusal stems from unfair or improper process. Longmore LJ stated that:

“ If the shipowners wish to be sure that they have readier access to the expertise of this court, they should agree to the High Court resolving their disputes in the first place.”