Richardson International Ltd. v. Mys Chikhacheva (The)

Richardson International Ltd. v. Mys Chikhacheva (The)

The guarantee must be construed in its commercial and factual matrix to mean it secured payment to the plaintiff upon judgment; the Bank's technical objection to a heading was unfounded in that context and the Bank should have made payment promptly, but the Court will not, in these circumstances, award costs against the Bank as a non-party; costs of $500 are awarded against the shipowner.

Citation
2002 FCT 482
Parties
Plaintiff: Richardson International, Ltd.; Defendant/owner: The Ship "Mys Chikhacheva" / Shipowner (Bering Trawlers Ltd.); Guarantor (provider of Security): Royal Bank of Canada
Court
Federal Court
Jurisdiction
Canada
Judgment Date
26 April 2002
Procedural Posture
Action in Rem (ship Arrest) / Post Judgment Enforcement Motion to Compel Payment Under Bank Guarantee
Outcome
Motion resolved by consent with payment under the guarantee agreed; court declined to award costs against the Royal Bank of Canada and awarded modest costs against the shipowner.
Legal Topics
Ship Arrest, Bail/guarantee, Interpretation of Security, Costs, Judgment Enforcement
Source Language
English
Maritime Law Contract Law Civil Procedure Banking Law Ship Arrest Bail/guarantee Interpretation of Security Costs +1 more

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Parties

Richardson International, Ltd.

Plaintiff

The Ship "Mys Chikhacheva" / Shipowner (Bering Trawlers Ltd.)

Defendant/owner

Royal Bank of Canada

Guarantor (provider of Security)

Procedural Posture

Action in Rem (ship Arrest) / Post Judgment Enforcement Motion to Compel Payment Under Bank Guarantee

Legal Issues

  1. 1 Whether the bank guarantee covered payment to the plaintiff despite an inconsistent heading naming the court as beneficiary
  2. 2 Whether a guarantor who submitted to the Court's jurisdiction could be condemned to pay as if a party
  3. 3 How to construe contractual security given the commercial context for release of a vessel

Ratio Decidendi

The guarantee must be construed in its commercial and factual matrix to mean it secured payment to the plaintiff upon judgment; the Bank's technical objection to a heading was unfounded in that context and the Bank should have made payment promptly, but the Court will not, in these circumstances, award costs against the Bank as a non-party; costs of $500 are awarded against the shipowner.

Court Disposition

Motion resolved by consent with payment under the guarantee agreed; court declined to award costs against the Royal Bank of Canada and awarded modest costs against the shipowner.

Orders

  • $500 payable to Plaintiff Richardson International, Ltd. by Bering Trawlers Ltd.