The Kos [2012]: the employment indemnity after withdrawal
The Supreme Court decision that owners who withdrew a vessel recovered the cost of caring for cargo left on board under the employment indemnity and as bailees.
ENE 1 Kos Ltd v Petroleo Brasileiro SA (The Kos) [2012] UKSC 17 was decided by the Supreme Court on 2 May 2012. The owners withdrew the vessel from a SHELLTIME 3 time charter for non-payment of hire while cargo was on board at Angra dos Reis, and claimed the cost of the two and a half days spent discharging it.
The Supreme Court held that the owners were entitled to recover under the charter’s employment indemnity, because the loss flowed from compliance with the charterers’ order to load the cargo, and alternatively as bailees who had incurred expense in caring for goods after the contract ended. The decision is the modern statement of the indemnity that sits behind NYPE 2015 Clause 8.
The full article will cover the facts, the reasoning on causation under the indemnity, the bailment analysis, and the consequences for an owner deciding whether to withdraw with cargo on board.