Bitesize know how from the English Courts
Knowledge Counsel London
"…the language used is sufficiently clear to qualify the Owners’ obligation to follow the Charterers’ orders…"
MARITIME – SANCTIONS
The Court of Appeal has allowed owners’ appeal against a decision that they had not been entitled to refuse to follow charterers’ order. Charterers ordered owners of the MV CATALAN SEA to lift a cargo of crude oil to be shipped by a Russian oil company. Owners refused on the basis that the charterparty permitted them to do so where the order was prohibited by sanctions or would expose owners to sanctions. The court agreed that the High Court judge had correctly concluded that the charterparty requirement that the order “expose … to sanctions” could be satisfied by owners reasonably forming a judgment that there would be a real risk of a breach of sanctions. It did not need a conclusion that sanctions contravention was more likely than not. The judge had erred in concluding that owners’ decision of the real risk of sanctions liability was not a reasonable one. The Court of Appeal considered that it was an objectively reasonable decision and allowed owners’ appeal.
LANDLORD AND TENANT – BUILDING SAFETY
The Technology and Construction Court (“TCC”) has rejected an argument by tenants of premises used for a residential training school that the lease had been frustrated by cladding defects in the building and/or the legislation passed following the Grenfell Tower fire. The court rejected the defence put forward by the tenants on the basis that the risk of any defects had already been allocated in the terms of the lease, including with a wide repairing obligation that covered latent defects. The claimant freehold owners were awarded summary judgment on their claim for unpaid rent.
CONSTRUCTION
The TCC has allowed a challenge to an adjudicator’s determination in a decision that required it to analyse how a pre-construction services agreement (“PCSA”) and the JCT building contract worked together. The dispute related to delays to air sealing works and whether an extension of time was permitted. The contractor had an obligation to open up and test the works under the PCSA. To the extent that the contractor was in breach of that obligation before the JCT contract was entered into, the contractor’s contractual right to complain about that breach was not lost when the JCT contract was entered into. The clause in the JCT contract that provided for the parties’ rights and liabilities under the PSCA to be subsumed into the JCT contract preserved liabilities for pre-existing breaches.
Belong (Construction) Ltd v Seddon Construction Ltd [2026] EWHC 1275 (TCC), 28 May 2026
MARITIME – LIMITATION
In March 2025 the MV SOLONG ploughed into the side of the MT STENA IMMACULATE causing significant damage and the death of one of its crew. Owners of the SOLONG sought to limit liability for claims made against them. Owners of the STENA IMMACULATE challenged that right in reliance on article 4 of the 1976 Limitation Convention. The captain of the ship was found criminally guilty of gross negligence manslaughter and owners of the SOLONG conceded that he was guilty of a gross failure of his watchkeeping and navigation duties. However, the court rejected the argument that the collision resulted from acts or omissions of the owners of the SOLONG committed recklessly and with knowledge that such loss would probably result. There was no basis for an assertion that senior management at the owning company of the SOLONG had realised that the ship was being navigated in a dangerous way.
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