• General average guarantees and the actionable fault defence: The BSLE Sunrise [2019] EWHC 2860 (Comm)View More

    Mon, 04 November, 2019

    In a judgment handed down today following a hearing on a preliminary issue, the Commercial Court has held that the “actionable fault” defence under Rule D of the York Antwerp Rules is available to the issuer of a general average guarantee in the standard AAA / ILU form. Ruth Hosking appeared for the claimant shipowner. Benjamin Coffer appeared for the defendant insurers, instructed by Andrew Nicholas and Cameron Boyd of Clyde & Co.

    The Case

    The dispute arose from the grounding of the “BSLE SUNRISE” off Valencia in September 2012. The owners declared general average. Cargo interests issued general average bonds. The defendant insurers provided security for those bonds on the standard form general average guarantee approved by the Association of Average Adjusters and the Institute of London Underwriters.

    Owners brought a claim under the guarantees for contribution in general average and it was agreed that the question of whether the wording of the guarantees made a Rule D defence available in principle to the guarantors would be decided by way of preliminary issue.

    The guarantees provided that the insurers undertook to pay ‘“any contribution to General Average and/or Salvage and/or Special Charges which may hereafter be ascertained to be properly due in respect of the said goods.” 


    HHJ Pelling QC, siting as a High Court Judge, held that if the actionable fault defence was available to the receivers, no sums were payable under the guarantees. The standard form wording preserved the insurer’s right to rely on the defence available to the receivers under Rule D if the loss was caused by the shipowner’s actionable fault.

    The Judge considered that the word “due” in the bonds signified a sum that was legally owing or payable. He relied on the judgment of Sheen J in The Jute Express [1991] 2 Lloyds Rep 55 in holding that “and which is payable” means “and which is legally due.” He noted that the payment was to be made “on behalf” of the cargo interests concerned, suggesting that what the insurer was agreeing to pay was what the parties to the adventure would otherwise have had to pay themselves.

    The inclusion of the word “properly” served to put the point beyond doubt. The Judge found support in the success of insurers resisting claims under similarly worded guarantees in The Cape Bonny [2017] EWHC 3036 and The Kamsar Voyager [2002] 2 Lloyds Rep 57 (the Judge inferring that the guarantee in Kamsar was worded similarly to those in the present case).

    Owners relied upon The Maersk Neuchatel [2014] EWHC 1643 in support of their interpretation. Hamblen J had held a that Letter of Undertaking assumed an obligation to pay the sum determined under the average adjustment. The Judge distinguished the case on the basis that the wording of the LOU in that case was different.


    It is now clear that actionable fault is a defence available to insurers under the standard form ILU / AAA guarantee. The same is also likely to be true for most other forms of guarantee: the Judge considered that his conclusion was in accordance with the settled practice and understanding of the shipping industry, and that only very clear wording could justify departing from that practice and understanding. The Maersk Neuchatel looks to be the exception rather than the rule. 

    > download a copy of the judgment here


    Ruth Hosking

    Ruth’s practice encompasses the broad range of general commercial litigation and arbitration.  Her particular areas of specialism include shipping, civil fraud, private international law and commodities.  She undertakes drafting and advisory work in all areas of her practice and regularly appears in court and in arbitration, both as sole counsel and as a junior.  Ruth also accepts appointments as an arbitrator (both as sole and as part of a panel).

    Ruth has appeared in the House of Lords, Court of Appeal, High Court and has represented clients in a variety of international and trade arbitrations (including ICC, LCIA, LMAA, GAFTA and FOSFA).  She has been involved in a number of high profile cases, including "The Achilleas", a leading case on the contractual principles of remoteness of damage and "The Atlantik Confidence", the first case in which an English Court has determined that a person was barred from relying on the limits provided by the Limitation Convention. 

    > view Ruth's full profile

    Benjamin Coffer

    Ben was named Shipping Junior of the Year 2019 at the Chambers & Partners Bar Awards. He is described by the directories as  "a rising star" (Legal 500, 2019); “a standout shipping and commodities junior" (Chambers & Partners, 2018) and “a star of the future” (Chambers & Partners, 2017). He is also recognised as a leading junior in the Legal 500 Asia Pacific Guide. His significant recent cases include: 

    • Volcafe v. CSAV [2019] AC 358, the Supreme Court's authoritative analysis of the inherent vice defence and the burden of proof in cargo claims;
    • The Lady M [2019] 2 Lloyd's Rep. 109 (Court of Appeal), the first modern decision on the meaning of 'barratry' and its effect on the defences under the Hague Rules;
    • Alba Exotic Fruit v MSC Mediterranean Shipping Co [2019] EWHC 1779 (Comm), considering the test to be applied on an application to strike out for intentional delay;
    • The Maersk Tangier [2018] 2 Lloyd’s Rep 59 (Court of Appeal), the leading English case on package limitation for containerised cargoes under the Hague-Visby Rules; 
    • Al Khattiya c/w Jag Laadki [2018] 2 Lloyd's Rep. 243, concerning the significance of the place of a collision in a forum non conveniens application; and,
    • The Aqasia [2018] 1 Lloyd's Rep 530 (Court of Appeal), settling a 90-year dispute as to whether Article IV.5 applies to bulk cargoes. 

    > view Ben's full profile

  • Benjamin Coffer named Shipping Junior of the Year 2019View More

    Fri, 01 November, 2019

    At the Chambers & Partners Bar Awards which took place on 31 October, Benjamin Coffer was awarded Shipping Junior of the Year 2019. 

    Benjamin Coffer

    Ben was named Shipping Junior of the Year 2019 at the Chambers & Partners Bar Awards. He is described by the directories as  "a rising star" (Legal 500, 2019); “a standout shipping and commodities junior" (Chambers & Partners, 2018) and “a star of the future” (Chambers & Partners, 2017). He is also recognised as a leading junior in the Legal 500 Asia Pacific Guide. His significant recent cases include: 

    • Volcafe v. CSAV [2019] AC 358, the Supreme Court's authoritative analysis of the inherent vice defence and the burden of proof in cargo claims;
    • The Lady M [2019] 2 Lloyd's Rep. 109 (Court of Appeal), the first modern decision on the meaning of 'barratry' and its effect on the defences under the Hague Rules;
    • Alba Exotic Fruit v MSC Mediterranean Shipping Co [2019] EWHC 1779 (Comm), considering the test to be applied on an application to strike out for intentional delay;
    • The Maersk Tangier [2018] 2 Lloyd’s Rep 59 (Court of Appeal), the leading English case on package limitation for containerised cargoes under the Hague-Visby Rules; 
    • Al Khattiya c/w Jag Laadki [2018] 2 Lloyd's Rep. 243, concerning the significance of the place of a collision in a forum non conveniens application; and,
    • The Aqasia [2018] 1 Lloyd's Rep 530 (Court of Appeal), settling a 90-year dispute as to whether Article IV.5 applies to bulk cargoes. 

    Ben's broad international commercial practice has a particular emphasis on commodities, insurance / reinsurance and shipping. He appears as sole and junior counsel in the Court of Appeal, the Commercial Court and the London Mercantile Court, and before arbitral tribunals under the rules of many different international organisations including the LMAA, the LCIA, the ICC, the SIAC, the HKIAC, the Swiss Chambers' Arbitration Institution, FOSFA and GAFTA.

    Ben undertakes the full spectrum of shipping work, including every species of charterparty and bill of lading claim, as well as shipbuilding and ship finance disputes. He has developed a particular specialisim in cases involving carriage of goods under the Hague and Hague-Visby Rules, and has appeared in several of the leading cases on such claims in recent years in the Court of Appeal and Supreme Court. 

    > view Ben's profile

  • Success in fraudulent misrepresentation / deceit trial - Jeremy Richmond and Max DavidsonView More

    Fri, 01 November, 2019

    Jeremy Richmond leading Max Davidson (instructed by Greenwoods GRM) acted for the successful second defendant in the London Circuit Commercial Court trial of a fraudulent misrepresentation / deceit claim arising out of a US$3m investment in the United States: Damazein Global Investments Ltd v Salamanca Capital Ltd and another [2019] EWHC 2730 (Comm).

    Jeremy and Max’s client was a former director of a private merchant bank, the arranger for the investment. The claimant investor alleged that Jeremy and Max’s client had induced it to invest US$3m on the basis of allegedly deceitful statements about the investment sums already raised.

    The trial began on 2 October 2019, listed for 10 days before HHJ Pelling QC (sitting as a Judge of the High Court). After 2 days of evidence by the claimant’s witnesses (including Jeremy’s cross-examination of the claimant’s sole director), the claimant discontinued its claim and agreed to pay the defendants’ costs of the proceedings on the indemnity basis.


    Jeremy Richmond

    Jeremy specialises in commercial and modern chancery law.  He is described in Chambers and Partners as a “superb advocate” whose “expertise in chancery, commercial and banking matters is a useful complement to his insolvency skills”. He has been ranked as 'Leading Junior' for Commercial Litigation and Insolvency in The Legal 500 2020. 

    Jeremy’s practice spans a broad range of commercial chancery and insolvency matters.  It encompasses company law (including directors misfeasance), shareholder and joint venture disputes, banking law, sale of goods (both international and domestic), fraud (with an emphasis on asset recovery) and all aspects of general commercial law.   He also has a specialisation in cross-border insolvency issues particularly in relation to the shipping, commodities, insurance and aviation sectors.  Jeremy has advised and / or appeared for key parties in OW Bunker, Hanjin Shipping, STX Pan Ocean, Alpha Insurance and Arik Airlines. He regularly appears in the Chancery Division as well as in the Commercial and Circuit Commercial Courts.   Jeremy often works in conjunction with Counsel from other jurisdictions and with experts. 

    > view Jeremy's profile

    Max Davidson

    Max undertakes work in a broad range of commercial disputes, including shipping, sale of goods, international arbitration, conflicts of law, aviation, energy and insurance. He regularly appears in the Commercial Court and in international arbitration.

    Prior to joining Quadrant Chambers, Max studied law at King's College London, Oxford and Harvard. He was also a Visiting Tutor in Contract Law and Trusts Law and an Examiner in Commercial Arbitration at King's College London during 2012-2013.

    > view Max's profile

  • Claiming Negotiating Damages at Common Law - James M. Turner QCView More

    Tue, 29 October, 2019

    In a judgment handed down this week in Priyanka Shipping Limited v Glory Bulk Carriers Pte Limited (“The Lory”) [2019] EWHC 2804 (Comm), David Edwards QC (sitting as a Judge of the Commercial Court) dismissed a common law claim for negotiating damages for the breach of a memorandum of agreement (MOA) for the sale of a ship.

    The decision is one of the first to grapple with the recent Supreme Court decision in One Step (Support) Ltd v Morris-Garner [2018] UKSC 20, [2019] AC 649.  In that case Lord Reed’s majority judgment issued a corrective to jurisprudence which, since the House of Lords’ decision in AG v Blake [2001] 1 AC 268, had seen the award of negotiating damages at common law “on a wider and less certain basis” than had been the case before Blake.

    What are "negotiating damages"?

    Negotiating damages “represent such a sum of money as might reasonably have been demanded by [the claimant] from [the defendant] as a quid pro quo for [permitting the continuation of the breach of covenant or other invasion of right]” (per Neuberger J in Lunn Poly Ltd v Liverpool & Lancashire Properties Ltd [2006] 2 EGLR 29 at [25]; see One Step at [4]).  They are “assessed by reference to a hypothetical negotiation between the parties, for such amount as might reasonably have been demanded by the claimant for releasing the defendants from their obligations” (One Step at [25]).

    Negotiating damages are commonly encountered in two situations: so-called user damages in tort; and damages awarded under Lord Cairns’ Act.

    A claim for user damages arises where the defendant has used or invaded the claimant’s property without causing direct financial loss: examples commonly given are riding a horse without permission or erecting an advertising hoarding protruding into the claimant’s airspace.  The defendant, having taken something for nothing, is required to pay a reasonable fee for the use made of the claimant’s property.

    As for Lord Cairns’ Act: historically, the Common Law Courts could only award damages for past breaches, i.e., where the cause of action was complete at the date the writ was issued. For the future, litigants had to look to the Courts of Equity for orders for specific performance and injunction etc. However, the latter had no power to award damages.  That inconvenience was remedied by Lord Cairns’ Act 1858, section 2 of which (now s. 50 of the Senior Courts Act 1981) allowed the Courts of Equity to award damages as well as or instead of an injunction.  

    Damages may be awarded under Lord Cairns’ Act for past breaches: Experience Hendrix LLC v PPX Enterprises Inc [2003] 1 All ER (Comm) 830 at [34] (where an injunction could still have been awarded; compare Surrey CC v Bredero Homes Ltd [1993] 1 WLR 1361, where it could not, and so no claim under Lord Cairns’ could be made).  However, damages for such breaches are assessed on the same basis as damages at common law: Johnson v Agnew [1980] AC 367.

    Damages in lieu of an injunction for future breaches, on the other hand, cannot be assessed on the same basis as damages at common law, as by definition such damages cannot be awarded at common law: Jaggard v Sawyer [1995] 1 WLR 269 CA at pp. 290-291 and One Step at [47].  Instead, negotiating damages may be awarded.

    The Issue

    As will be seen, the issue in The Lory was whether negotiating damages were available at common law for past breaches of the relevant term of the MOA.

    The Facts

    The Defendant Seller sold the Claimant Buyer its vessel on terms that included clause 19, by which the Buyer undertook that it would not trade the vessel and would sell it only for demolition.  By the time of (and after) delivery, however, the markets had moved against the Buyer, who then twice traded the vessel.  By the time of the trial, the vessel was completing discharge under the second fixture.  The day before the trial, it was fixed for a third.  The Seller claimed damages for or an injunction to restrain breach of clause 19 of the MOA (or both). The Buyer claimed a declaration that the Defendant was entitled to no more than nominal damages.

    The Outcome

    The Judge awarded an injunction restraining future trading of the vessel (expressly including the third fixture).  Damages could in principle be claimed for the first and second fixtures, but – because they were now in the past – only at common law.

    In a long and careful judgment, the Judge analysed Lord Reed’s judgment in One Step, noting his restatement of the purpose of the award of damages for breach of contract and affirmation of the compensatory principle in Robinson v Harman (1848) 1 Exch. 850.  He noted that, once the vessel had been sold and delivered, the Seller no longer had any proprietary interest in it, “no right or ability to use the Vessel to trade, and no right or ability to profit from the Vessel’s use (and equally no responsibility for any costs or liabilities incurred in relation to the Vessel’s operation)”.  Although the Seller was entitled to be placed in the position it would have been if the contract had not been breached, “it is not obvious how any further trading of the Vessel by the Buyer, albeit in breach of clause 19, could cause the Seller any loss.” [163].

    It was “no doubt” for this reason that no conventional damages claim had been made, but only a claim for a hypothetical release fee.  The “critical question”, so far as that claim was concerned, was whether the Seller could bring itself within [95(10)] of Lord Reed’s judgment and show that “ … the loss suffered by the claimant is appropriately measured by reference to the economic value of the right which has been breached, considered as an asset.” [189]

    Lord Reed had made clear that “that such an approach is not available in the case of a breach of any contractual right, but only where:… the breach of contract results in the loss of a valuable asset created or protected by the right which was infringed.”  The paragraph implicitly regards the relevant asset not as the contractual right itself but as something else, a valuable asset “created or protected by the right”.”  [190]

    The “valuable assets” that Lord Reed had in mind were essentially proprietary rights and analogous rights such as intellectual property and rights of confidence [193].  The Judge rejected the Seller’s submission that its right under clause 19 was within the same class: “once the Vessel was sold and delivered to the Buyer, the Seller had no proprietary or financial interest in her.  The Buyers’ use of the Vessel for trading, though in breach of clause 19, did not involve the Buyers taking or using something in which the Seller had an interest, a valuable asset, for which the Seller was entitled to require payment.” [196]

    The Judge regarded the right under clause 19 as more closely analogous to the non-compete obligation at issue in One Step, which Lord Reed did not consider fell within “the category of cases where negotiating damages were available as a measure of the Seller’s loss”.  [199]

    The claim therefore failed.  The Judge did, however, grant permission to appeal.  We may not, therefore, have heard the last word on this topic.

    James M. Turner QC appeared for the Buyer on the instruction of Alex Andrews and Claire Don of Reed Smith.

    The judgment can be read here: Priyanka Shipping Ltd v Glory Bulk Carriers PTE Ltd [2019] EWHC 2804 (Comm)


    James M. Turner QC

    James M. Turner QC is a commercial advocate specialising in commercial contractual disputes across sectors including international commercial arbitration, energy, shipbuilding, offshore construction, shipping and banking.

    He appears on appeals from the Commercial Court and has extensive experience of Arbitration, appearing before (and sitting as arbitrator in) domestic and international arbitral bodies (such as HKIAC, LCIA, ICC and LMAA) as well as in ad hoc matters.

    Many of his cases require the co-ordination of a range of expert specialisms, ideally suited to James’s down to earth approach, team-building skills and highly-regarded technical knowledge. Reflecting the invariably international character of his practice, James has extensive experience in dealing with foreign law and multi-jurisdictional disputes. He has a particular eye for appreciating and addressing cultural barriers in international arbitration.

    > To view James' full website profile, please click here.

  • Section 70 Arbitration Act 1996: challenge or appeal: supplementary provisions - Ruth HoskingView More

    Fri, 18 October, 2019

    This article was first published on the Practical Law Arbitration Blog and can be found here.

    Mention section 70 of the Arbitration Act 1996 (AA 1996) to most arbitration practitioners and it is likely that they will immediately think of the sections 70(2) and (3). They require:

    • An applicant or appellant under sections 67, 68 or 69 of the AA 1996 to first exhaust any other available remedy of challenge.
    • An applicant or appellant to bring any application or appeal within 28 days of the award (or where there has been any arbitral process of appeal or review, the date when the applicant or appellant was notified of the result of that process).

    However, a recent decision of Moulder J, BSG Resources Limited v Vales and others, has considered the provisions of sections 70(6) and (7), AA 1996. Those provisions provide as follows:

    “(6) The court may order the applicant or appellant to provide security for the costs of the application or appeal, and may direct that the application or appeal be dismissed if the order is not complied with.

    The power to order security for costs shall not be exercised on the ground that the applicant or appellant is—

    (a) an individual ordinarily resident outside the United Kingdom, or

    (b) a corporation or association incorporated or formed under the law of a country outside the United Kingdom, or whose central management and control is exercised outside the United Kingdom.

    (7) The court may order that any money payable under the award shall be brought into court or otherwise secured pending the determination of the application or appeal, and may direct that the application or appeal be dismissed if the order is not complied with.”

    Section 70(6), AA 1996

    It was common ground between the parties that Vale (the respondent to the applications under sections 24 and 68 of the AA 1996) was entitled to security for its costs pursuant to section 70(6) AA 1996, but there was a dispute as to the quantum of that security.

    It was also common ground that, in principle, the court should award the sum which the applicant would be likely to recover in a detailed assessment if awarded costs on the standard basis, having regard to the factors set out in CPR 44.5. However, Vale submitted that there was a real possibility it would be awarded costs on the indemnity basis given (what it said) were the weaknesses of the challenge and the history of without merit applications.

    The question for the court was whether there was a real possibility that costs would be awarded on an indemnity basis (Danilina v Chenukhin). Moulder J confirmed that the question did not requite a consideration of the merits of the claim but rather an assumption that the appellant loses its challenge application. On the facts, Moulder J was not persuaded that Vale had shown a real possibility of costs being awarded on an indemnity basis. She noted the “unusual feature” of the case that when it was put to the administrators by Vale that the application under section 68 was “hopeless and plainly inappropriate”, the evidence was that the administrators sought further advice on the pending litigation. Having taken legal advice on the merits, they decided to proceed with it as being “clearly in line with the court approved objective of the administration”.

    Section 70(7), AA 1996

    Moulder J confirmed that the test under section 70(7) is different for appeals under sections 68 and 69 of AA 1996 from applications under section 67 of the AA 1996. Relying on Picken J in Progas v Pakistan, she held that it is necessary to show that the challenge in some way prejudices the ability of the defendant to enforce the award or diminishes the claimant’s ability to honour the award, and that (at paragraph 64):

    “In order to show that the ability to enforce the award has been prejudiced or the ability of the applicant to honour it has been diminished, it is therefore effectively necessary to satisfy a similar requirement to that of a freezing injunction, namely the risk of dissipation of assets between the time of the section 67 application and its final disposal.”

    It is not necessary (compare the position under section 67, AA 1996 challenges) to satisfy an additional threshold or requirement that the party seeking security should show that the challenge to the award is flimsy or otherwise lacks substance.

    In considering the facts before her, Moulder J bore in mind the observations of Teare J in X v Y that “… the jurisdiction conferred on the court by section 70 should not be used as a means of assisting a party to enforce an award which has been made in its favour”. However, on the facts of that case, Moulder J considered that Vale had not established a risk of dissipation or diminution of assets and was seeking by its application to use it as a means to assist in the enforcement of the award.

    The case therefore reaffirms the high threshold required for applications under section 70(7) of the AA 1996.


    Ruth Hosking

    Ruth’s practice encompasses the broad range of general commercial litigation and arbitration.  Her particular areas of specialism include shipping, civil fraud, private international law and commodities.  She undertakes drafting and advisory work in all areas of her practice and regularly appears in court and in arbitration, both as sole counsel and as a junior.  Ruth also accepts appointments as an arbitrator (both as sole and as part of a panel).

    > To view Ruth's full profile, please click here.

  • Scuttling: the Innocent Co-Assured’s (Uninsured) Peril - “The Brillante Virtuoso” - Nichola WarrenderView More

    Thu, 10 October, 2019

    Can a separate innocent co-assured establish an insured peril of “piracy” “malicious mischief” “persons acting maliciously” “vandalism” or “sabotage” in the face of a finding of wilful misconduct by its co-assured?

    This was just one of the questions considered by Teare J in the context of a war risks policy in the latest first instance decision in Suez Fortune Investments Ltd & Piraeus Bank AE v Talbot Underwriting Ltd & others (“The Brillante Virtuoso”) [2019] EWHC 2599 (Comm) arising out of the loss of the tanker Brillante Virtuoso off the coast of Aden in July 2011.

    The Claims

    On 5/6 July 2011 the Brillante Virtuoso was boarded by a group of armed men as she was drifting off the coast of Aden late at night. The vessel was ordered towards Somalia but sailed only a short distance after which her main engines were stopped and an improvised explosive incendiary device was detonated causing a fire in her engine room.  The fire spread and caused severe damage to the vessel. 

    The Owners claimed this was a result of a fortuitous hostile third-party attack on the vessel and together with the mortgagee bank as separate co-assured brought a claim under their war risks policy.  The war risk insurers denied liability.  They did so, primarily on the basis that the vessel had been scuttled although various other defences were also raised. They counterclaimed for declarations of non-liability under the policy. 

    The vessel was found to be a constructive total loss by Flaux J in 2014 (see [2015] EWHC 42 (Comm)).  In 2016 the Owners’ claim was struck out for failing to disclose documents and a subsequent application for relief for sanctions was refused by Flaux J (see [2016] EWHC 1085 (Comm)) leaving the bank’s claim and the war risk insurers’ counterclaim to proceed to trial.

    The Court’s Decision

    After a lengthy enquiry into the circumstances of the loss at trial, Teare J held that the Owners had scuttled the vessel. 

    Nevertheless the bank argued that from its perspective what had occurred was an act of “piracy” or “malicious mischief” or “persons acting maliciously” or “vandalism” or “sabotage.”   Teare J did not share that view.   

    He held that this was an attempted insurance fraud against the war risk insurers and in such circumstances:-

    1. It was not piracy: to establish piracy as an insured peril there must not only be an unlawful attack at sea but conduct which a business man would say amounted to piracy. The events which had occurred did not amount to piracy in the popular or business sense.  There was no attack on the vessel.  The motives of the armed men were not to steal or ransom the vessel or steal from the crew but to assist the Owners to commit a fraud upon their insurers.  Irrespective of whether the events were considered from the point of view of the Owners or of the innocent bank, an attempted insurance fraud is not an act of piracy.
    2. It was not “persons acting maliciously”: following the Supreme Court decision in the B Atlantic [2018] UKSC 26 an element of “spite ill-will or the like” was required to be involved and this was absent in the present case.  There was an intention to damage the vessel but this was in furtherance of a fraudulent plan and no doubt with an intention to profit from doing so. As in The Salem [1982] QC 946 the vessel was not lost or damaged because of a desire to harm the vessel or the Owners.  It was damaged because the armed men wanted to assist the Owners and make money from their actions and whatever threats were made to the crew in the carrying out of the plan, that element of ill-will was not sufficient to colour the operation as a whole.
    3. It was not “malicious mischief”: this must bear the same meaning as “malicious” for the peril of “persons acting maliciously.”
    4. It was not vandalism: vandalism is not just damage to property but wanton or senseless damage to property. The damage in this case was not undirected or mindless violence or damage which was ordinarily described as vandalism. 
    5. It was not sabotage: sabotage is damage to, or disabling of, property so as to frustrate the use of that property for its intended purpose.

    The war risk insurers also succeeded on alternative defences including breaches of specific warranties in the policy relating to navigational limits and a compliance with BMP3 with respect to anti-piracy measures.


    Given that the war risk insurers were required to establish wilful misconduct to the usual high standard, the decision is in many ways a classic investigation into a maritime casualty and those that practice in this area would do well to heed the practical guidance given by Teare J as to what documents are useful to those charged with such task and the general approach to the evaluation of the evidence in such cases.

    Even to those who are unfamiliar with the maritime peril of “piracy,” it is unlikely to come as much of a surprise that a pretend pirate attack is not such an act. 

    A theme common to Teare J’s analysis of the other perils is that it confirms that it is not only the physical damage which must be proved but also an additional element relevant to the motive or manner in which such damage is carried out.  Thus for “malicious damage” and “malicious mischief” the requirement of “spite ill-will or the like”; for “vandalism” the “undirected or mindless violence or damage” and for “sabotage” an intention to “frustrate the use of the property for its intended purpose.”  As these classes of perils are not exclusive to marine policies, the approach taken by Teare J to them is likely to be of interest beyond the seas of marine insurance.

    Accordingly The Brillante Virtuoso decision may well yet be known as something other than (or at least not just) a unique scuttling case.

    This case note and commentary has been prepared by Nichola Warrender who acted for the war risk insurers led by Jonathan Gaisman QC, Richard Waller QC and together with Keir Howie (all of 7KBW), instructed by Chris Zavos, Jo Ward, Anna Haigh, Suzy Oakley and Jacob Hooper at Kennedys Law LLP.

    Download the judgment here.



    Nichola Warrender

    Nichola is an experienced junior who enjoys a broad commercial litigation and arbitration practice with particular emphasis on shipping, carriage of goods, commodities, shipbuilding, energy and construction and related insurance and finance disputes.

    Nichola undertakes drafting and advisory work in all of her practice areas.  She regularly appears as an advocate in the High Court and in arbitration, as sole counsel and as a junior.  She has a good balance between led and non-led work and is frequently recommended as a junior by those with whom she has previously worked.

    Nichola is a meticulous and persuasive advocate with a wide range of experience within her fields of specialism and in more general commercial disputes.  Many of her cases involve issues of jurisdiction, private international law or require careful analysis of complex factual, expert and technical or legal issues.  She has experience in various forms of pre-emptive remedies such as freezing orders, anti-suit injunctive and other pre-action relief and has obtained or resisted most forms of pre-trial applications.

    Nichola is recommended as a leading junior for shipping law. Latest quotes include:  "Her attention-to-detail is outstanding, she is highly personable, and is a persuasive orator."

    > view Nichola's full profile

  • Quadrant Chambers is raising money for Breast Cancer Care through Tour de LawView More

    Wed, 09 October, 2019

    Quadrant Chambers is proud to be taking part in 'Tour de Law 2019', the legal sector's biggest charity bike race in aid of Breast Cancer Care.

    On Wednesday 16th and Thursday 17th October, we will be virtually cycling to Paris and back from the comfort of our library. We will be going head-to-head with fellow chambers and law firms whilst watching all the action live on a digital leader board. We are aiming to cycle 1,000km as quickly as we can in a bid to become Tour de Law Champion, and, more importantly, raise £5,000 to support those living with breast cancer.

    If you would like to help us cycle to victory, then please email Olivia de Satgé in our marketing department by clicking here and sign up to one (or more) of our 15-minute slots. It is possible to cycle as an individual or bring colleagues together to form a team, as two Wattbikes (indoor exercise bikes) will be set up in the library.

    You can help us raise funds for this fantastic charity by donating to our JustGiving page. Every pound counts!

  • Commodity Financing, Warehousing and Contractual Limitation Provisions - Natixis v Marex and Access World - Robert Thomas QC and Nicola AllsopView More

    Tue, 08 October, 2019

    Last week the Commercial Court (Mr Justice Bryan) handed down judgment in a case which has important implications for commodity financing, warehousing and more generally in relation to reliance upon contractual limitation provisions.

    The decision:

    (i) affirmed that estoppel can only be used as a shield and not as a sword;

    (ii) included an insightful analysis as to the relationship between the holder of a warehouse receipt and the warehouse;

    (iii) considered what is required by way of notice in order to permit a party to rely on its standard terms and conditions to limit its liability in negligence;

    (iv) contained a detailed discussion of the reasonableness requirement contained in UCTA.


    In Natixis v Marex and Access World [2019] EWHC 2549 (Comm), the Court considered a four handed dispute. The background can be summarised as follows. Marex entered into various purchase and repurchase contracts with a Chinese company, CHH, for the sale of various parcels of nickel.  Natixis agreed to buy the nickel from Marex pursuant to further spot purchase and re-purchase contracts (referred to as PC1 to PC5). The nickel was stored at warehouses owned by Access World and both purchases involved a set of transferable warehouse receipts which had originally been issued by Access World. By the time of the trial, it was common ground that the warehouse receipts provided by CHH to Marex which were in turn provided to Natixis were counterfeit. Following this discovery, Natixis closed out its futures position and claimed the sum of US$32 million in damages from Marex. Marex in turn brought claims against Access World in contract and for negligence and against its marine cargo insurers for an indemnity under the terms of its insurance policy.

    The decision

    In a wide-ranging judgment, the Judge considered each of the claims in turn, save for that against the insurers, Marex’s claim against them having been compromised following cross examination of its witnesses. As a result, the Judge did not need to consider (for what would have been the first time) whether there had been a failure to present the risk fairly under the new Insurance Act 2015. However, he did consider a number of other important issues.

    Natixis, succeeded on its straightforward case that Marex had breached its purchase contract in various respects, notably because Marex had failed to pass title in the nickel to Natixis.  Marex’s construction argument, that it had simply promised to deliver whatever warehouse receipts Marex had been provided with, even if (as was the case) they were forgeries, was described by the Judge as contrary to the ordinary and natural meaning of the clauses, uncommercial and un-businesslike. He found that, on the wording of the contracts, the obligation was to provide genuine warehouse receipts and that since Marex had failed to do so it was in breach of contract.

    The Judge also rejected Marex’s argument that the contracts should be avoided on the grounds of common mistake. Having decided against Marex on the issue of construction, the Court found that it bore the risk and assumed responsibility for any forged documents. Accordingly, in accordance with the principles set out by the Court of Appeal in The Great Peace [2003] QB 679, which confirmed that before a plea of common mistake can succeed, it must be shown that the contract itself does not already provide for one party to bear the particular risk, Marex’s reliance on the doctrine was stillborn.

    Accordingly, the Court awarded damages to Natixis in the full amount of its claim, namely $32 million.

    In its claim against Access World, Marex brought claims in contract and in tort. Its primary claim was one based on alleged contractual warranties and associated alleged estoppels which were said by Marex to give rise to an obligation on the part of Access World to deliver up the nickel the subject of two of the transactions which Marex had entered into. In this context, Marex argued for the existence of a contract in a number of ways and, in particular it relied upon emails from Access World in which Access World had incorrectly confirmed the authenticity of two of the relevant warehouse receipts. The Court rejected this argument and in so doing, considered the nature and status of the relationship between a warehouse and the holder of a warehouse receipt. Perhaps surprisingly, as the Court observed, the status of such receipts has not received a great deal of attention from the English courts. However, the Judge was clear that they do not constitute a document of title in the common law sense and that the relationship between the warehouse keeper and the relevant person who has the right to possession of the goods is that of bailment. As the Judge observed, where there is a warehouse receipt there is a bailment of goods between the first order party (in this case a company called Straits) and Access World, that bailment being contractual in nature and at least evidenced by the terms of the warehouse receipt. When another party presents a duly completed original warehouse receipt to Access World, the latter may attorn to that party. However, there is no relationship between a warehouse keeper and any buyer from the first order party unless and until the warehouse keeper attorns to the buyer, the warehouse receipt not being a document of title within the Sale of Goods Act 1979. A fortiori, presentation of a false warehouse receipt could not give rise to an attornment.

    Marex also sought to argue that a genuine warehouse receipt would give rise to a unilateral contract between its holder and Access World on the basis that it contains a statement by Access World to whoever may become endorsee that Access World would deliver the goods to the endorsee upon presentation of the original warehouse receipt. The Judge considered this to be fundamentally flawed. First of all, it failed to have regard to the fact that the relationship between Access World and Straits was one of bailment, to which neither Marex nor Natixis was party and the fact that it is only upon attornment on presentation of a genuine warehouse receipt that any relationship is created between Access World and the endorsee. It also failed on the facts because no genuine warehouse receipt had ever been presented.

    The Court also rejected an argument that there was a warranty in the form of a collateral contract, there being no evidence of any intention to create legal relations nor any contractual offer.

    Finally, the Court noted that in the absence of a contract the estoppel upon which Marex had also relied could not exist because otherwise estoppel would be used as a sword and not as a shield.

    Turning to the case in negligence, the Court found that Access World owed Marex, but not Natixis, a duty of care in authenticating the receipts and that it had not exercised reasonable skill and care in its authentication of the receipts presented to it for this purpose, which related to the PC4 to PC5 transactions only. However, the Court also found that Marex’s conduct in the transactions that it had entered into with CHH constituted contributory negligence which should lead to the recoverable damages being reduced by 25%, but rejected the argument that it was sufficient to break the chain of causation.

    Nevertheless, the Court also held that, notwithstanding the gratuitous/non-contractual nature of the authentication exercise, Access World was entitled to rely on the limitation of liability contained in its standard terms and conditions. In this regard, Marex had argued that if (as the Judge found) there was no binding contract between Access World and Marex there was no proper basis for holding Marex to be bound by Access World’s terms and conditions. Secondly, it argued that if those terms and conditions applied, the limitation of liability provision did not meet the reasonableness requirement within the Singaporean equivalent to the UCTA 1977.

    In rejecting these arguments, the Court found that what was required in order for there to have been an effective disclaimer of liability was reasonable notice of that disclaimer. That in turn depends on the consideration of two related issues. First, whether the relevant provisions particularly are onerous or unusual and secondly whether Marex had sufficient notice of those provisions. As the Judge noted, these are interrelated issues because the more outlandish a particular clause is, the greater degree of notice required. In this context, the Judge found that the terms in question were neither onerous nor unusual and that, Access World having (amongst other things) issued thousands of warrants to Marex over the course of 10 years, each of which expressly referred to its terms and conditions, and Access World having also issued invoices to Marex containing a similar reference, and reference to its terms and conditions appearing on every email sent by Access World, sufficient notice had been given.

    With regard to the argument that the terms and conditions did not apply to gratuitous services as opposed to contractual ones, the Judge held that the reasonable person in the position of Marex would have understood that the terms and conditions, on their wording, applied to extracontractual services such as the authentication services provided by Access World.

    Finally, having weighed up all the relevant factors, including the fact that Marex was a commercially sophisticated LME broker with access to legal advice, the Judge had little hesitation in finding that the limitation provisions in Access World’s terms and conditions were reasonable. In fact, the provision reflected similar clauses in the industry, which the Judge considered were appropriate in circumstances where the warehouse keeper generally has no knowledge of the commercial considerations and risks that are in play, in contradistinction to the customer who can assess those risks and take other steps to ameliorate risks that it faces.  Interestingly, the Judge also found that the inclusion of a limitation clause is an integral part of the very assumption of responsibility which Access World was prepared to undertake and that any intervention by the Court would be to disrupt the equilibrium of the very circumstances in which an assumption of responsibility arose, which, he said, the Court should be extremely reluctant to do.

    A copy of the judgment can be found here

    Robert Thomas QC and Nicola Allsop acted for Access World Logistics, instructed by Adrian Marsh and Iain Kennedy of Hill Dickinson LLP.

    Robert Thomas QC

    Robert's practice has moved from strength to strength since taking silk in 2011. He retains a strong presence in the traditional areas of his practice and has recently complemented this with substantial experience in commercial fraud and related relief. He is ranked as a Leading Silk in the latest editions of both directories, and has been praised in previous editions for having a "fantastically effective and intellectual style", for "consistently deliver[ing] a first-class service" and for his ability to handle "difficult cases on a tight timetable". He is a registered practitioner in the DIFC and is also receiving an increasing number of appointments as an arbitrator.

    Robert is ranked as a leading barrister in Chambers & Partners UK and Global editions and in the Legal 500 UK, Asia-Pacific and EMEA editions. 

    "He is a real fighter and an exceptional advocate." (Legal 500, 2020)

    "He gives excellent advice and his advocacy is authoritative, reasoned and persuasive." ..."Very user-friendly." (Chambers UK 2019)

    > view Rob's full profile

    Nicola Allsop

    Nicola specialises in civil fraud, insolvency, company law (particularly shareholder disputes) and banking litigation. Nicola's practice has a strong international element; she was called to the Bar of the BVI in 2012, in the Cayman Islands in 2016 (limited admission) and many of her cases raise cross-border and jurisdictional issues. Nicola has a wealth of trial experience both as sole counsel and as part of a team. Notable cases include the Weavering litigation which occupied her throughout most of 2016 and concerned a claim against the Fund’s Cayman auditors arising out of a large-scale fraud perpetrated by the Fund’s founder Magnus Peterson; a 10-week fraud trial Sita v Serruys; a series of matters arising out of the collapse of the Arch Cru Fund; and a long-running shareholder dispute involving the Barclay Brothers and the affairs of Coroin Limited, the owner of Claridges, the Berkeley and the Connaught.

    Nicola is recommended as a leading Junior for Commercial Litigation in the Legal 500 UK Bar.

    "Very hands-on and user-friendly, she is a real team player and integrates very well." (Legal 500, 2020)

    “A decisive and thorough advocate who often has the ear of the court.” (Legal 500, 2019)

    > view Nicola's full profile

  • Quadrant Chambers shortlisted for ‘Chambers of the Year 2019’ at the British Legal AwardsView More

    Tue, 01 October, 2019

    We are delighted to have been shortlisted for 'Chambers of the Year' at the British Legal Awards 2019.

    The awards take place on 21 November at the Ball Room Southbank.

    Good luck to all those nominated. A full shortlist can be found here:

  • Quadrant Chambers in the Legal 500 2020View More

    Thu, 26 September, 2019

    We are very pleased to be recommended as a leading set in nine different practice areas in the latest legal 500, including three top rankings. We have 117 individual recommendations and 55 barristers recommended across 15 practice areas in this year’s edition. We have 16 new entrants and 18 barristers moving up the rankings.

    We have new recommendations for Caroline PoundsPaul Henton and Ben Gardner in energy and natural resources and for Gemma Morgan in international arbitration. We have new entries in aviation for Emily McWilliams and Koye Akoni. Turlough Stone strengthens our banking recommendations. Tom Bird and Max Davidson are newly recommended in commodities. Guy Blackwood QC is our latest silk to be recommended for commercial litigation. Simon Oakes is in for Pensions, David Semark, Christopher Jay and Emily McWilliams all make this year’s shipping rankings and travel sees new entries for Tim Marland, Mark Stiggelbout and Emily McWilliams.

    We are recommended as a leading set for :

    • aviation - "'the kings and queens’ of aviation"
    • banking & finance - "...invested heavily in the banking and finance arena and now boasts an impressive cohort of well-respected and highly experienced silks and juniors."
    • commercial litigation - "Quadrant Chambers has ‘excellent strength in depth’ and many solicitors report they have ‘not felt the need to look beyond the set for commercial litigation work in the past couple of years’."
    • commodities - "frankly the range of talent available is now so good it is very strong set in terms of maritime law and commodity trade disputes"
    • energy - "simply an excellent set, with a number of strong energy practitioners."
    • insurance & reinsurance - "provides an ‘excellent service’ for insurance work and its expertise spans marine and non-marine cases."
    • international arbitration - "a popular choice for major arbitrations in the commodities, energy, maritime, and infrastructure sectors, and fields a strong cadre of experienced counsel and arbitrators."
    • shipping - "has the ‘strongest consolidated offering of shipping skills at the London Bar’ and offers a ‘very wide range of very able counsel and juniors'"
    • travel - "‘highly regarded’ for cross-border disputes and its members are regularly involved in high-profile aviation and shipping-related mandates."