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Commercial Disputes Weekly – Issue 17412 September 2023

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"To allow the charterer to limit liability in this way would lead to the remarkable situation that the owner's claim would be paid out of the fund established by the owner itself."MSC Mediterranean Shipping Co SA v Stolt Tank Containers BV and others

Maritime – Tonnage Limitation
Following extensive fire damage to a container ship as a result of a cargo explosion, the charterer claimed to be entitled to limit its liability to the ship owner in relation to losses suffered by the owner for damage to the ship under section 2(1) of the Convention on Limitation of Liability for Maritime Claims 1976. The Court of Appeal upheld the decision of the lower court that the charterer was not entitled to limit its liability. The limitation of liability applied to claims by third parties against persons within the definition of ‘shipowner’ which in this case included the charterer. To allow the charterer to limit liability in this way would lead to the remarkable situation that the owner’s claim would be paid out of the fund established by the owner itself. The fund would be significantly reduced, which would prejudice all the third-party claimants, for whose benefit the fund had been set up. That cannot have been the intention of the parties to the 1976 Convention.
MSC Mediterranean Shipping Co SA v Stolt Tank Containers BV and others [2023] EWCA Civ 1007, 1 September 2023

Maritime – Cargo Damage
A cargo of cocoa beans was carried on board the M/V Maersk Chennai from Lagos, Nigeria, to Tanjung Pelepas, Malaysia. The cargo was discharged by 1 October 2017 but was not collected until around 28 November 2017, when it was found to be suffering from condensation and mould damage. The court rejected the cargo interests’ claim against the carrier because the damage occurred to the cargo after discharge from the vessel but before delivery to the consignee. There was sufficient evidence that the cargo did not suffer inherent vice. Although the carrier had caused the damage by its failure to properly ventilate the cargo, the carrier’s responsibility for the beans under the Hague Rules, which applied only as a matter of contract, ended upon discharge from the vessel. Clause 5 of the bill of lading limited the carrier’s liability for loss of or damage to the goods to loss or damage occurring in the period to which the Hague Rules apply, namely from loading to discharge.
JB Cocoa SDN BHD and others v Maersk Line AS trading as Safmarine [2023] EWHC 2203 (Comm), 5 September 2023

State Immunity
The parties were involved in a major dispute and proceedings arising from a number of transactions or alleged transactions including purchase and financing transactions. The allegations brought by both sides were serious and included bribery by government officials. The particular claim here was by some of the defendants including Privinvest Shipbuilding SAL (Holding) against President Nyusi, the president of the Republic of Mozambique. The claim was for contribution as an alleged joint tortfeasor or party to an alleged unlawful means conspiracy, and in deceit. The alleged activity by President Nyusi took place outside the United Kingdom, mostly before he became President and, in any event, not in his public capacity or part of his official functions. The court held that the President was entitled to raise an immunity challenge to the proceedings and that he had immunity from the jurisdiction of the English court in relation to the current civil and commercial proceedings whilst he was Head of State.
The Republic of Mozambique v Credit Suisse International and others [2023] EWHC 2215 (Comm), 4 September 2023

Contract formation
A dispute arose between the parties in relation to advice given by the claimant to the defendant in relation to increasing the value of land owned by the defendant that had development potential. The issue was whether and how much the claimant was entitled to be paid for his advice. The agreement was allegedly reached during a short meeting and the first written evidence was made about four months later. The claim was for just under £7.5m. The court held that the parties had reached an oral agreement which provided that the claimant would receive 15% of any price increase above £250,000 per acre. However, the right to payment was linked to the claimant improving the terms on offer and the claimant failed to establish that he was a or the effective cause of the ultimate sale. Further, the claimant was unable to recover on a quantum meruit basis for his efforts because of he was providing services pursuant to an agreement.
Burgess v Kempson [2023] EWHC 2216 (Ch), 5 September 2023

Should you wish to discuss any of these cases in further detail, please speak with a member of our London dispute resolution team below, or your regular contact at Watson Farley & Williams:

Robert Fidoe
Rebecca Williams
Ryland AshCharles Buss
Dev DesaiSarah Ellington
Andrew HutcheonAlexis Martinez
Theresa MohammedTim Murray
Mike Phillips
Andrew Ward

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