FSL-9 PTE Ltd & Anor v Norwegian Hull Club

FSL-9 PTE Ltd & Anor v Norwegian Hull Club

The 'liberty to apply' provision in the letter of undertaking does not entitle owners to apply to the court to require the defendant P&I club to increase the amount of its undertaking. The provision enables owners to arrest charterers’ assets if the security provided proves inadequate, notwithstanding the prohibition against arrest or re-arrest in the instrument. The right to enforce an increase in security lies against the charterers, not the P&I club directly.

Parties
Claimant: FSL-9 PTE LIMITED; Claimant: NORDIC TANKERS TRADING A/S; Defendant: NORWEGIAN HULL CLUB
Jurisdiction
England and Wales
Judgment Date
10 May 2016
Procedural Posture
Commercial Court Summary Judgment Application / Summary Judgment
Outcome
Summary judgment for the defendant P&I club
Legal Topics
Construction of Letters of Undertaking, Security for Claims, Jurisdiction, Third Party Rights
Contract Law Maritime Law Insurance Law Construction of Letters of Undertaking Security for Claims Jurisdiction Third Party Rights

Case Brief

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Parties

FSL-9 PTE LIMITED

Claimant

NORDIC TANKERS TRADING A/S

Claimant

NORWEGIAN HULL CLUB

Defendant

Procedural Posture

Commercial Court Summary Judgment Application / Summary Judgment

Legal Issues

  1. 1 Whether 'liberty to apply' in the Letter of Undertaking entitles owners to apply to court to require the P&I club to increase security
  2. 2 Whether the club is contractually obliged to increase security upon application by owners
  3. 3 Interpretation of contractual terms in maritime security instruments

Ratio Decidendi

The 'liberty to apply' provision in the letter of undertaking does not entitle owners to apply to the court to require the defendant P&I club to increase the amount of its undertaking. The provision enables owners to arrest charterers’ assets if the security provided proves inadequate, notwithstanding the prohibition against arrest or re-arrest in the instrument. The right to enforce an increase in security lies against the charterers, not the P&I club directly.

Court Disposition

Summary judgment for the defendant P&I club

Orders

  • Defendant P&I club is entitled to summary judgment
  • Parties to draw up an order; court will hear on consequential matters