Recent English law developments

We summarise below some recent, important, decisions of the Court of Appeal in the areas of commodity trading and shipping/marine insurance.

Rhine Shipping DMCC v Vitol SA [2024] EWCA Civ 5801

The issue before the Court of Appeal was whether delays to the vessel ‘MV Dijilah’ in reaching its second loadport because of a ‘detention’ at the previous loadport, were a breach of the CP by the Owners (Rhine), where the CP provided "arrest/detention or other sanction levied against the vessel", and therefore if the indemnity in the charterparty was engaged? 

At the first loadport bunkers and stores on board the Vessel were arrested by a third party in connection with a claim against the Vessel’s bareboat charterers; ie that arrest had nothing to do with Rine or Vitol or their CP.  The bareboat charterers had time chartered the Vessel to Rhine which had sub-chartered the Vessel to Vitol for the carriage of crude oil Vitol had purchased.

Due to the delay of the Vessel at the first loadport because of the third party arrest, the price payable by Vitol for the crude oil significantly increased as it was linked to the date of the Bill of Lading (to be issued at the second loadport).  Vitol claimed the price difference from the Owners.

The Court held that the Vessel was detained in breach of the contractual warranty (and that the Owners were liable under a contractual indemnity) despite the arrest relating to bunkers/stores of a third party.  The Court also found that but for the arrest, the date that the Vessel would have arrived at the second loadport was ascertainable and, therefore, that the price difference payable by Vitol based on the BL expected vs actual date was recoverable.

Finally, the Owners argued that an alleged internal ‘hedging’ system within Vitol reduced its losses, and/or that the loss claimed was too remote against the Owners.  On those points the Court held that there was no hedge on the facts which reduced the loss (just a netting off practice which did not reduce losses) and that the loss was/ought to have been within the contemplation of the Owners and was, therefore, recoverable.

Royal Sun Alliance and others v Textainer and Others Court of Appeal [2024] EWCA Civ 547

This important decision involves Excess of Loss insurance policies. The case concerned Textainer’s entitlement to substantial sums that it had recovered and expected to recover from the Estate of its bankrupt lessee, Hanjin Shipping Company of South Korea and the application of insurance “paid up” in terms of claims and “recovered down” in terms of the insurers’ rights of subrogation principles.  The insurers claimed from Textainer monies/monies to be recovered from the Estate by way of subrogation.

The Court of Appeal rejected the insures’ claims.  There are various parts to the Judgment but of particular interest is that the Court held that, as a matter of principle, recoveries made by Textainer from the Estate were to be applied on a “top down” basis and not on a proportionate basis (as argued by the insurers) such that the monies were applied in favour of Textainer; and that the circumstances did not represent under-insurance for the purposes of Section 81 of the Marine Insurance Act 1906.

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In May 2024, new Statute law in the area of digital markets and competition entered English law.

The Digital Markets, Competition and Consumers Bill received Royal Assent on 24 May 2024.  The Act gives the Competition and Markets Authority (CMA) much broader powers to protect consumers (including the ability directly to impose fines on businesses which infringe consumer protection legislation).  The new rules deal with the regulation of digital markets; wider promotion of competition; and clamp down on unfair practices that ‘dupe’ consumers into spending, including subscription traps, drip-pricing, fake reviews, secondary ticketing, and pressure selling.

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