Insights

The referendum decision in the UK to leave the EU sends the UK into unchartered waters and creates a period of uncertainty for those in the shipping industry. Although the exit date and precise terms of departure from the EU are not yet known, this briefing is intended to highlight some possible areas for change arising from that decision.

On 11th May, 2016 the Supreme Court issued its judgment ([2016] UKSC 20) in the GLOBAL SANTOSH dispute, bringing finality to a string of appeals from the original arbitration award.  This judgment clarifies the effect of arrests caused by the actions or omissions of time charterers’ sub-contractors. The Supreme Court rejected the view that anything that sub-charterers or receivers might have done which resulted in the arrest of the ship was the responsibility of the time charterer. A “nexus between the acts leading to the arrest and the performance of functions under the time charter” was required for clause 49 to apply.

In previous publications the importance of accurate estimating of costs has been highlighted. In order to provide increased certainty for Members and the Club, the Board is requiring the Managers to change the way in which suppliers bill for the services they provide.

The English Court of Appeal has overturned a High Court decision on the interpretation of a consequential loss provision in a drilling contract in Transocean Drilling v Providence Resources[2016] EWCA Civ. 372. The judgment provides useful and more general guidance as to how the court will interpret provisions in commercial contracts. It also serves as a reminder of the importance of clearly drafted contractual provisions.