Thursday 26 May 2022
The Claimant appeals the Order of Sir Nigel Teare (sitting as a High Court Judge) dated 21st and the consequential costs Order dated 29th October 2021.
The Appellant’s Vessel “PANAMAX ALEXANDER” was in collision with the Respondent’s Vessel “OSIOS DAVID”. Following the collision, the parties entered into a Collision Jurisdiction Agreement (“the CJA”) in the standard (and widely used) form of the London Admiralty Solicitors’ Group (form ASG21). By Clause C, the CJA provided that “Each party will provide security in respect of the other’s claim in a form reasonably satisfactory to the other”. The Appellant duly offered security, in the form of a Letter of Undertaking from its P&I Club (“the LOU”). However, the Respondent refused to accept it, leading to prolonged proceedings of the “PANAMAX CHRISTINA” in South Africa.
The Appellant sued the Respondent for damages for breach of the CJA. At the trial, in addition to the primary issue (whether the LOU was a form of security reasonably satisfactory to the Respondent) a previously unheralded point arose as to whether, under the CJA, the Respondent actually had any obligation to accept security that was in a form reasonably satisfactory to it. The Judge held that it did not. That decision is now appealed along with the consequential costs ordered.