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Liability for general average and incorporation of charterparty war risks terms in bills of lading (Herculito Maritime Ltd v Gunvor—The ‘M/V POLAR’)

Published on: 13 January 2022
Published by: LexisPSL
  • Liability for general average and incorporation of charterparty war risks terms in bills of lading (Herculito Maritime Ltd v Gunvor—The ‘M/V POLAR’)
  • What are the practical implications of this case?
  • What was the background?
  • What did the court decide?
  • Case details

Article summary

Insurance & Reinsurance analysis: Following the detention of the M/V ‘POLAR’ by pirates in the Gulf of Aden and declaration of general average (GA) by her owners, Cargo Interests resisted the owners’ claim for them to contribute in GA. The arbitrators held that Cargo Interests were not liable to contribute in GA. This was on the grounds that the voyage charter terms in respect of war risks/Gulf of Aden were incorporated into the bills of lading. As a result, the owners agreed to look solely to their insurance cover for losses covered thereby, rather than to the holders of the bills of lading in GA. On appeal, the Commercial Court concluded that Cargo Interests were liable, but gave permission to Cargo Interests to appeal. That appeal was dismissed by the Court of Appeal, upholding the first instance judgment, finding in favor of the owners and holding that the bills of lading did not exclude liability on the part of Cargo Interests to pay their share of the GA. Written by Richard Hugg, partner and Nikki Chu, senior associate at Stephenson Harwood LLP. or take a trial to read the full analysis.

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