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High Court Rules on Financial Fallout from Middle Eastern Shipping Collision

shipIssues arising from dramatic shipping collisions around the world are most frequently resolved in the calm surroundings of the High Court in London. In a case on point, the Court ruled on the financial consequences of an incident in which a tanker loaded with 95,000 barrels of natural gas condensate was struck and severely damaged by a container ship off a Middle Eastern port.

The container ship was travelling at over 10 knots when it drove into, and almost through, the tanker. The point of impact, close to the tanker’s starboard bow, was thankfully forward of her collision bulkhead and cargo tanks. Following earlier proceedings in London, the owner of the container ship was ruled 80 per cent liable for the collision, and the owner of the tanker 20 per cent.

The losses suffered by the container ship owner were agreed at about $2.5 million. The tanker owner’s losses were, however, disputed. The matter was complicated by the fact that the tanker owner had fallen into impecuniosity since the collision. After she was repaired, and her name changed, the tanker had been arrested in Singapore and compulsorily sold at judicial auction.

Ruling on the matter, the Court found that the tanker owner’s losses, by reference to the cost of repairing the vessel and the inability to use her profitably during those repairs, came to about $9.3 million. Losses arising from the tanker owner’s subsequent impecuniosity were not recoverable in that they had not been caused by the collision. The final sums payable by each shipowner to the other would be calculated by application of the previously decided 80/20 ratio.

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