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Undang-undang Laksamana

COMMERCIAL CONTRACT – FORCE MAJEURE OR JUST EXCUSES? LESSONS FROM LITASCO V DER MOND OIL [2024] 2 LLOYD’S REP 593

The recent decision in Litasco SA v Der Mond Oil and Gas Africa SA [2024] 2 Lloyd’s Rep 593 highlights the strict thresholds required to invoke defences such as force majeure and trade sanctions in commercial disputes. The English Commercial Court dismissed claims of misrepresentation and found that banking restrictions and sanctions did not excuse payment obligations under the crude oil contract. This judgment reinforces the importance of precise contractual drafting and credible evidence in defending against payment claims, serving as a cautionary tale for businesses navigating international trade and legal obligations.

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Undang-undang Laksamana

CHARTERPARTY AGREEMENTS – CHARTERER’S GUIDE TO FOULING CLAUSES

In maritime charterparty agreements, fouling clauses outline who is responsible for the costs and time associated with hull cleaning when marine organisms accumulate due to specific operating conditions. These clauses are crucial for clarifying liabilities, particularly when charterers operate in warm, bio-rich waters or leave vessels idle, as fouling can significantly impact performance and fuel efficiency. Understanding the scope of a fouling clause helps charterers navigate potential costs and ensure clear terms for post-redelivery responsibilities, as highlighted in cases like The “Globe Danae” [2024] 1 Lloyd’s Rep. 309.

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Undang-undang Laksamana

BREACH OF CONTRACT – DAMAGES – FORESEEABILITY AND FAIRNESS IN FREIGHT LIABILITY CLAIMS

In JSD Corporation v Tri-Line Express [2024] 1 Lloyd’s Rep. 285, the court set a clear precedent on damages for property claims, ruling that only foreseeable and proportionate losses are recoverable. Applying principles akin to Hadley v Baxendale, the court allowed for repair costs if intent to remedy was evident but rejected double recovery, underscoring that damages must reflect actual loss without overcompensation. This decision serves as a guide for Malaysian courts, emphasizing fair and balanced recovery in line with foreseeable damages.

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Undang-undang Laksamana

ADMIRALTY IN REM – SHIPPING — FUEL OR FREIGHT? COURT CLEARS THE AIR ON GLOBAL FALCON BUNKER DISPUTE

In a decisive ruling on the Global Falcon bunker dispute, the court dismissed Meck Petroleum’s admiralty claim for unpaid high-sulphur fuel, finding that the fuel was supplied not for operational purposes but as cargo. With the vessel lacking necessary equipment to use high-sulphur fuel and evidence pointing to its transfer to another vessel, the court determined that Meck’s claim fell outside admiralty jurisdiction, leading to the release of the vessel and potential damages for wrongful arrest.

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Undang-undang Laksamana

COLLISION COURSE – COURT WEIGHS ANCHOR DRAGGING AND LIABILITY AT SEA

In a collision that underscores the high stakes of maritime vigilance, the court ruled that Belpareil bore the brunt of the blame for failing to control its dragging anchor and delaying critical warnings. Yet, Kiran Australia wasn’t off the hook entirely—apportioned 30% fault for its limited evasive action, the case serves as a stark reminder: in maritime law, all vessels share responsibility in averting disaster, even when one party’s errors loom large.

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Undang-undang Laksamana

GENERAL AVERAGE – PIRATE RANSOM DISPUTE: SUPREME COURT RULES CARGO OWNERS LIABLE IN THE POLAR CASE

In the landmark case Herculito Maritime Ltd v Gunvor International BV (The Polar) [2024] 1 Lloyd’s Rep. 85, the English Supreme Court upheld the shipowner’s right to recover a USD 7.7 million ransom paid to Somali pirates under general average. The Court ruled that cargo interests, despite their arguments regarding charterparty terms and insurance obligations, were liable to contribute to the ransom payment. This decision reinforces the importance of clear contractual provisions when seeking to limit or exclude liability in maritime contracts particularly matter relating to general average.

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Undang-undang Laksamana

BROAD INTERPRETATION OF ‘SUBSEQUENT MODIFICATION’ APPLIES YORK-ANTWERP RULES 2016 GOVERNING GENERAL AVERAGE IN STAR AXE I LLC V ROYAL & SUN ALLIANCE

In Star Axe I LLC v Royal and Sun Alliance Luxembourg SA [2024] 1 Lloyd’s Rep 342, the court determined that the phrase “any subsequent modification” in the bills of lading extended to the York-Antwerp Rules 2016, not just amendments to the 1994 version. This broad interpretation significantly impacted the general average adjustments, applying the more modern rules outlined in the YAR 2016. The decision emphasize the importance of clear contract language when referring to evolving sets of industry rules, as it directly influences the liabilities and cost-sharing in maritime incidents.

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Undang-undang Laksamana

COURT UPHOLDS RECAP EMAIL AS BINDING CONTRACT IN MARITIME DISPUTE: PORALU MARINE V MV DIJKSGRACHT

In the recent case of Poralu Marine Australia Pty Ltd v MV Dijksgracht [2023], the Federal Court of Australia Full Court (FCAFC) ruled that a second recap email, summarizing key terms from negotiations, constituted the binding contract of carriage rather than the subsequent booking note. The court found that the recap email reflected the final agreement between the parties, while the booking note attempted to introduce new terms, including liability limits, which were not mutually agreed upon. This decision emphasizes the importance of recap emails in maritime contracts and reinforces the application of the Hague-Visby Rules in such cases.

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Undang-undang Laksamana

ONE-YEAR TIME BAR FOR MISDELIVERY CLAIMS REINFORCED BY COURT OF APPEAL IN FIMBANK PLC V KCH SHIPPING CO LTD (THE GIANT ACE) [2024]

In the recent decision of the English Court of Appeal in FIMBank plc v KCH Shipping Co Ltd (The Giant Ace) [2024], the court upheld that the one-year time bar under Article III Rule 6 of the Hague-Visby Rules, which are applicable in Malaysia under the Carriage of Goods by Sea Act 1950 (COGSA), applies to all liabilities, including claims for misdelivery of cargo, even when the misdelivery occurs after discharge. The court emphasized the broad application of the phrase “all liability whatsoever in respect of the goods”, confirming that the amended rule was designed to extend the time limit to cover such claims. This ruling underscores the need for timely legal action within the one-year period, reinforcing legal protection for carriers in both the UK and Malaysia.

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Recent Legal Updates

ADMIRALTY IN REM – WRONGFUL ARREST – POSSESORY RIGHT – ARREST GONE WRONG: WHEN A SHIP ARREST BACKFIRES WITH DAMAGES

In Eletson Holdings Inc & Ors v The Vessel “Paros” [2026] 8 MLJ 80, the High Court set aside an arrest after finding that the plaintiffs had no proprietary or possessory right to the vessel at the time of the writ, as the bareboat charter had already been terminated. The Court held that the claim was in substance a corporate control dispute dressed up as an admiralty action, and emphasised that such disputes do not fall within admiralty jurisdiction. Critically, the plaintiffs’ failure to disclose the termination of the charter when obtaining the arrest warrant amounted to a serious breach, leading the Court to find mala fides or gross negligence and order damages for wrongful arrest. The decision reinforces that ship arrest is a powerful remedy that must be exercised with full disclosure and a proper maritime foundation.

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GUARANTEE – PERSONAL GUARANTEE ≠ PAY ON DEMAND: COURT DRAWS THE LINE BETWEEN SURETYSHIP AND DEMAND GUARANTEES

In CE Energy DMCC v Bashar [2026] Lloyds’s Rep 267, the Commercial Court clarified that not all guarantees labelled “on demand” will be treated as demand guarantees. On a proper construction, the court held that the personal guarantee in question was a contract of suretyship, requiring proof of the principal debtor’s liability rather than automatic payment upon demand. Crucially, the court found that the debtor’s “irrevocable” admissions of debt in a payment agreement created a binding contractual estoppel, which the guarantor could not challenge. The decision also confirms that, where payment is due on a “day certain”, a seller may still claim the price notwithstanding retention of title. The case underscores the importance of precise drafting and the risks of entering into settlement agreements that conclusively fix liability.

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MARITIME NEGLIGENCE – PLAINTIFF CLAIMED FOR DAMAGES CAUSED DURING ANCHOR DEPLOYMENT OPERATION – CALDERBANK OFFERS

In Tom Eastwind 365 Sdn Bhd v The Owners of the Vessel “Icon Sophia” [2025] 9 MLJ 397, the High Court held that the doctrine of res ipsa loquitur applied in a maritime collision during an anchor deployment operation, allowing an inference of negligence against the tug owner. The Court clarified that the doctrine is not defeated merely because the defendant adduces evidence explaining the accident – such evidence goes to rebutting the inference, not preventing it. While liability was established due to the tug master’s error of judgment in manoeuvring too close to a stationary barge, the plaintiff failed to properly prove its damages and was awarded only RM50,000. Notably, despite succeeding on liability, the plaintiff was ordered to pay costs after rejecting reasonable Calderbank offers, underscoring the risks of pursuing litigation without properly substantiated claims.

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JURISDICTION – BILLS OF LADING – BREACH OF HIMALAYA CLAUSE – BREACH OF EXCLUSIVE JURISDICTION CLAUSE – ONEROUS OR UNUSUAL TERMS

In Maersk Guinéa-Bissau SARL v Almar-Hum Bubacar Baldé SARL [2026] 1 Lloyd’s Rep 215, the English Commercial Court held that a shipper was liable for breach of an exclusive jurisdiction clause and a Himalaya clause after commencing proceedings in Guinea-Bissau instead of England. The Court confirmed that such clauses are standard and enforceable, and that commencing foreign proceedings in breach of them can give rise to a claim for damages. Notably, the Court also recognised that Himalaya clauses may be used offensively, allowing subcontractors to recover losses caused by wrongful litigation. The foreign judgment was not recognised due to lack of jurisdiction and denial of natural justice.

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DELIVERY WITHOUT PRESENTATION OF BILL OF LADING – LOI WON’T SAVE YOU: SHIPOWNER LIABLE FOR MISDELIVERY DESPITE INDEMNITY

In United Overseas Bank Ltd v The “Maersk Katalin” [2026] 1 Lloyd’s Rep 18, the Singapore High Court reaffirmed that delivery of cargo without presentation of original bills of lading remains a fundamental breach, even where carried out against letters of indemnity. The Court held that LOIs merely shift commercial risk but do not authorise misdelivery, and rejected arguments of consent, ratification and causation. Significantly, the Court emphasised that the burden lies on the carrier to prove that the loss would have occurred in any event – a burden not easily discharged. The decision underscores the continued strict liability regime in misdelivery cases, particularly where banks as bill holders are involved.

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CONTRACT LAW – ‘UK COURTS’ MEANS ENGLAND: COURT UPHOLDS JURISDICTION DESPITE VAGUE CLAUSE

In SMT Global Logistics Ltd v Georgian Airlines LLC [2025] Lloyd’s Rep. Plus 89, the Commercial Court held that a clause referring disputes to “the court in accordance with current legislation of the United Kingdom” was a valid jurisdiction clause in favour of the High Court of England and Wales. The Court also confirmed that the Montreal Convention does not apply to pure contractual claims for non-performance, such as repayment and loss of profits. Emphasising a broad and commercially sensible interpretation, the Court enforced the parties’ choice of forum and refused to stay proceedings, reaffirming that jurisdiction clauses will be upheld unless there are overwhelming reasons to depart.

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