ENE 1 Kos Ltd v Petroleo Brasileiro SA (Rev 1) [2010] EWCA Civ 772 (06 July 2010)

ENE 1 Kos Ltd v Petroleo Brasileiro SA (Rev 1) [2010] EWCA Civ 772 (06 July 2010)

Shipowners are not entitled to remuneration at market or contract rates for the period after withdrawal where the cargo remains on board, as there was no express or implied agreement, accident, emergency, or necessity justifying such payment. However, owners may recover expenses directly incurred in caring for the cargo during discharge (e.g., cost of bunkers used for pumping). Costs of providing a guarantee to avoid arrest are recoverable as costs of the action, subject to assessment by the Costs Judge.

Citation
[2010] EWCA Civ 772
Parties
Respondent/owners: E. N. E. 1 KOS LIMITED; Appellant/charterers: PETROLEO BRASILEIRO S. A.
Jurisdiction
England and Wales
Judgment Date
06 July 2010
Procedural Posture
Appeal / Court of Appeal Judgment on Appeal From High Court (commercial Court)
Outcome
Appeal allowed in part; cross-appeal dismissed in part.
Legal Topics
Charterparty, Remuneration for Storage/discharge of Cargo, Bailment, Costs of Guarantee, Quantum Meruit, Agency of Necessity
Maritime Law Commercial Law Charterparty Remuneration for Storage/discharge of Cargo Bailment Costs of Guarantee Quantum Meruit Agency of Necessity

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Parties

E. N. E. 1 KOS LIMITED

Respondent/owners

PETROLEO BRASILEIRO S. A.

Appellant/charterers

Procedural Posture

Appeal / Court of Appeal Judgment on Appeal From High Court (commercial Court)

Legal Issues

  1. 1 Whether shipowners are entitled to remuneration or expenses for storage/discharge of charterers' cargo after withdrawal of vessel for non-payment of hire
  2. 2 Whether costs of providing a guarantee to avoid arrest are recoverable as costs in the action

Ratio Decidendi

Shipowners are not entitled to remuneration at market or contract rates for the period after withdrawal where the cargo remains on board, as there was no express or implied agreement, accident, emergency, or necessity justifying such payment. However, owners may recover expenses directly incurred in caring for the cargo during discharge (e.g., cost of bunkers used for pumping). Costs of providing a guarantee to avoid arrest are recoverable as costs of the action, subject to assessment by the Costs Judge.

Court Disposition

Appeal allowed in part; cross-appeal dismissed in part.

Orders

  • Owners not entitled to remuneration at market or contract rates for 2.64 days after withdrawal.
  • Owners entitled to recover $28,756 for bunkers consumed during discharge operations.