A ship owner had an implied right of indemnity against the acts of charterers, even under their own orders where they lead to false claims. The more foreseeable the owners’ loss, the more likely it is to be an ordinary incident of the chartered service and therefore outside the scope of the indemnity.
The court will restrict the application of indemnities and comparable clauses in two ways: it requires a sufficient causative link between the order and the consequence giving rise to the claim, and a provision of this kind will not usually be held to cover ordinary expenses and losses of trading, the risk of which rests upon the owner.
Judges:
Sir Donald Nicholls V-C, Evans, Mann LJ
Citations:
Times 08-Jul-1994, Independent 20-Jul-1994, [1994] 2 Lloyds Rep 227
Jurisdiction:
England and Wales
Cited by:
Cited – Petroleo Brasileiro Sa v Ene Kos 1 Ltd (‘The MT Kos’) SC 2-May-2012
The MT Kos had been chartered by the appellants. The respondents failed to make payments, and notice was given to withdraw the vessel. The contract said that such a notice was without prejudice to any claim. At the time, the vessel was laden. The . .
Lists of cited by and citing cases may be incomplete.
Transport
Updated: 26 October 2022; Ref: scu.89987