Costs of defending cargo claim. Recovery under Inter-Club Agreement.

 

In London Arbitration 30/16 the tribunal held that where a claim was made against owners, in circumstances in which they incurred no liability to the claimants under the bill of lading, the costs of defending the claim were recoverable under clause 3 of the 1996 Inter-Club Agreement. This had been incorporated into the time charter on NYPE 1993 form.

 

The claim had been brought in a foreign court against the registered owners, the master, and the charterers and judgment had been given against the time charterers. In doing so the tribunal departed from a previous arbitration award in London Arbitration 10/15 where it was held that such costs could not be recovered when there was in fact no liability to cargo owners. Alternatively, the tribunal found that the owners would be able to recover under an implied indemnity as the cause of the cargo damage was the charterer’s order to wait outside the discharge port for 35 days.

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