Farstad Supply AS v Enviroco Limited and another (Scotland)

Farstad Supply AS v Enviroco Limited and another (Scotland)

Enviroco is not entitled to contribution from Asco under section 3(2) of the 1940 Act because, on the proper construction of the charterparty, clause 33.5 excludes Asco's liability to the owner for damage to the vessel, even if caused by Asco's negligence. Therefore, Asco is not a person who, if sued, might also have been held liable for the purposes of section 3(2).

Parties
Appellant: Farstad Supply AS; Respondent: Enviroco Limited; Third Party: Asco UK Limited
Jurisdiction
England and Wales
Judgment Date
05 May 2010
Procedural Posture
Civil Appeal (scotland) / Supreme Court Judgment on Appeal From Inner House
Outcome
Appeal allowed
Legal Topics
Contribution Among Joint Wrongdoers, Contractual Indemnity and Exclusion Clauses, Interpretation of Charterparty, Circuity of Action, Statutory Construction (law Reform (miscellaneous Provisions) (scotland) Act 1940)
Contract Law Tort/delict Maritime Law Contribution Among Joint Wrongdoers Contractual Indemnity and Exclusion Clauses Interpretation of Charterparty Circuity of Action Statutory Construction (law Reform (miscellaneous Provisions) (scotland) Act 1940)

Case Brief

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Parties

Farstad Supply AS

Appellant

Enviroco Limited

Respondent

Asco UK Limited

Third Party

Procedural Posture

Civil Appeal (scotland) / Supreme Court Judgment on Appeal From Inner House

Legal Issues

  1. 1 Meaning and effect of section 3(2) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1940
  2. 2 Whether a contractual defence (such as an indemnity or exclusion clause) precludes contribution under section 3(2)
  3. 3 Proper construction of clause 33.5 of the charterparty and its effect on liability

Ratio Decidendi

Enviroco is not entitled to contribution from Asco under section 3(2) of the 1940 Act because, on the proper construction of the charterparty, clause 33.5 excludes Asco's liability to the owner for damage to the vessel, even if caused by Asco's negligence. Therefore, Asco is not a person who, if sued, might also have been held liable for the purposes of section 3(2).

Court Disposition

Appeal allowed

Orders

  • Interlocutor of the Inner House dated 1 May 2009 recalled
  • Interlocutor of the Lord Ordinary dated 23 April 2008 restored