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Web Alert: Standard Club fights for members' interests in the Court of Appeal

News & Insights 9 December 2013

Action aims to avoid multi-million pound payments into court in marine liability cases

Action aims to avoid multi-million pound payments into court in marine liability cases.

The Standard Club has supported a case to the UK Court of Appeal in order to provide shipowners with a choice in respect of establishing a limitation fund.

The case follows the loss of the cargo ship MV Atlantik Confidence, which sank off Oman with a cargo of steel products following a catastrophic engine room fire in April 2013.  The Standard Club is seeking to establish a limitation fund to secure potential P&I claims by way of a letter of undertaking (LOU) pursuant to the 1976 Limitation Convention.  The Standard Club and Kairos Shipping requested permission to the Commercial High Court of London to establish the fund by way of an LOU. The request was denied by the Commercial High Court, but the Standard Club and Kairos Shipping have appealed this decision to the UK Court of Appeal.

Mehtab Kassam, Claims Executive, Standard Club said:
“Making large payments into court has become customary in cases of this nature, but there is nothing in the 1976 Limitation Convention which requires a limitation fund to be put up in cash. Letters of Undertaking are widely accepted around the world as being good security and we believe that the assumption that cash is necessary should be challenged in order to reflect modern market practice.”

“We want the English courts to recognise and accept not only the financial standing of IG Clubs, but also the established method of securing claims throughout the world by way of club LOUs.”

Kairos Shipping Ltd and The Standard Club Europe Ltd v Enka & Co LLC and others was heard in the Court of Appeal on 4 December with the decision expected in early 2014.  Clyde and Co LLP represented The Standard Club (Europe) Ltd and Kairos Shipping in the action.  The appeal was largely unopposed by the known claimants.  The International Group supported the Standard Club’s action and submitted a letter to the Court, endorsing the Standard Club’s and Kairos Shipping’s action.


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