ICL Shipping Ltd. & Anor v Chin Tai Steel Enterprise Co Ltd. & Ors, Court of Appeal - Commercial Court, October 10, 2003, [2004] 1 LLR 21,[2004] 1 WLR 2254,[2003] EWHC 2320 (Comm),[2004] 1 Lloyd's Rep 21

Reporting Judge: [2004] 1 LLR 21,[2004] 1 WLR 2254,[2003] EWHC 2320 (Comm),[2004] 1 Lloyd's Rep 21

President: ICL Shipping Ltd. & Anor v Chin Tai Steel Enterprise Co Ltd. & Ors

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Extract

Case No: 2003 Folio 268

Neutral Citation No. [2003] EWHC 2320 (Comm)

IN THE HIGH COURT OF JUSTICE

QUEENS BENCH DIVISION

COMMERCIAL COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 10 October 2003

Before :

THE HONOURABLE MR JUSTICE COLMAN

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Between :

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Mr Nigel Teare QC and Mr Nigel Jacobs (instructed by Ince & Co) for the Claimants

Mr Lionel Persey QC and Mr Michael Davey (instructed by Howard Kennedy) for the Defendants

Hearing dates : 15 and 21 July 2003

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Judgment

Mr Justice Colman:

Introduction

1. The applications now before the court raise points of wide-ranging importance as to the effect of the Convention on Limitation of Liability for Maritime Claims 1976. The provisions of that Convention are incorporated in substance into English law by the Merchant Shipping Act 1995.

2. The underlying facts are as follows.

3. The United Kingdom is a party to the 1976 Convention. Singapore is not. It is instead a party to the predecessor to that Convention, namely the 1957 Convention. There are numerous differences between the two conventions but the most important substantive difference is that, whereas under the 1957 Convention (Article 1.1) a shipowner is entitled to limit his liability for specified areas of liability, including cargo damage unless the occurrence giving rise to the claim resulted from the actual fault or privity of the owner, under the 1976 Convention entitlement to limit liability is barred (under Article 4) if it is proved that the loss resulted from the owner's ``personal act or omission, committed with the intent to cause such loss, recklessly and with knowledge that such loss would probably result''.

4. The First Claimants (``ICL'') were the owners of the ICL VIKRAMAN. The First Defendants (``Chin Tai''), a Taiwan corporation, were holders of a bill of lading dated Hamburg 10 August 1997 issued by ICL under which ICL acknowledged receipt for shipment of 10,078 mt of casting billets for carriage on ICL VIKRAMAN from Poland to Taiwan. Tragically, on 26 September 1997 the vessel collided with the MOUNT 1 in the Malacca Strait and sank with the loss of 26 lives and all the cargo.

5. Chin Tai arrested a sister ship - the ICL RAJA MAHENDRA - under proceedings commenced in Singapore in April 1998: Admiralty in Rem No. 236 of 1998. The parties were not able to agree as to the terms of security for the release of that vessel. Negotiations took place between Ince & Co, in London, acting for the Second Claimants, ICL's P & I Club, and Daire O'Keefe & Co in Newry, Northern Ireland, acting for cargo interests. Singapore law firms Khattar Wong (for the Club) and Joseph Tan Jude Benny & Scott (for cargo) were also involved. The Club's letter of undertaking was accepted by Cargo under protest and the sister ship released. The point of disagreement related to the identification of the amount covered by the letter - ``any sum found to be due to you for damages, interest and costs in a court or tribunal of competent jurisdiction''. The ship interests wanted the letter to make express reference to such amount as should be found due in the Singapore proceedings or in London arbitration. The reason for the insistence on wording to cover London arbitration was that the bills of lading expressly incorporated a London arbitration clause to be found in the underlying charter...

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