The Ocean Victory [2017] UKSC 35: safe port and abnormal occurrence
The Supreme Court decision on the safe port warranty, why the inquiry must not be fragmented, and the joint insurance and limitation holdings that came with it.
Gard Marine and Energy Ltd v China National Chartering Co Ltd (The Ocean Victory) [2017] UKSC 35, decided 10 May 2017, is the leading modern authority on the safe port warranty. A Capesize bulk carrier allided with the south breakwater and grounded leaving Kashima, Japan on 24 October 2006, in a storm combining long wave swell at the Raw Materials Quay with a severe northerly gale in the Kashima Fairway.
On the safe port issue the Supreme Court dismissed the appeal unanimously, applying Sellers LJ’s formulation in The Eastern City [1958] 2 Lloyd’s Rep 127 at 131. It held that abnormal occurrence is not a term of art and bears its ordinary meaning, an event well removed from the normal and out of the ordinary course, and that mere theoretical foreseeability does not make a rare event a normal attribute of the port. The judge below had erred by fragmenting the inquiry into the two weather components instead of asking the single question whether their simultaneous coincidence was abnormal.
The decision carried two further holdings on other issues: that the joint insurance provisions of BARECON 89 clause 12 barred recovery of the ship’s value from the demise charterer, by a majority with Lord Clarke and Lord Sumption dissenting, and that charterers could not limit under the 1976 Convention by reference to the tonnage of the very ship lost. The full article will set out each.