High Court of Justice, 11 May 2018, Agile Holdings Corporation v. Essar Shipping Ltd, [2018] EWHC 1055

The appellant Agile Holding Corporation (“Agile”) appealed under section 69 of the Arbitration Act, 1996 against the respondent Essar Shipping Limited (“Essar”).

The arbitration concerned the chartering by ship of a cargo of iron from India to Tunisia. As the cargo was combustible, the vessel was cleared to load but caught fire during the voyage. Under the contract, it was the charterer who was responsible for loading and unloading the goods under Article 8 of the charter party. Also, clause 8 b) of the Agreement settling disputes between the parties, the charterer in principle bears 100% responsibility for loading, unloading or other handling of the goods “unless the words “and liability” are added to clause 8 or there is a similar amendment making the master responsible for handling the cargo, in which case: 50% of charterers 50% of owners”. The respondent had argued that section 49 of the agreement was an amendment to that effect, which the appellant refuted.

The arbitrators had concluded that Article 49 was not sufficient to cover the assumption of full liability of the master. However, the clause having transferred only one element of the cargo to the master was inoperative according to the British Court because there was a loading error during the period of responsibility of the charterers. The judge considered that the arbitrators’ conclusion that the 50/50 allocation pursuant to paragraph (8)(b) would be applicable was wrong in law. Consequently, the respondent is 100% liable and the appeal must be allowed.

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