Japanese dry bulk operator Daiichi Chuo Kisen has won its appeal against a UK High Court order to pay $137.6m plus $29m in costs for the loss of the 176,000-dwt bulker MV Ocean Victory (built 2005) at the Japanese port of Kashima in 2006.
Daiichi Chuo Kisen had chartered the vessel from China National Chartering and it sailed into the port of Kashima with a cargo of South African iron ore. But the bulker was lost attempting to escape a sudden severe gale. In 2013 Justice Teare ruled that the Japanese company was liable for the loss for taking it into an unsafe port in breach of the charter party safe-port warranty. The order to pay a total of $167m added to Daiichi’s financial troubles. It was already in financial difficulties after being caught out by the post-2008 charter market collapse and was forced to call in financial support from major shareholder Mitsui OSK Lines and undertake a far reaching financial restructuring and asset sales.
However, yesterday the UK Court of Appeal overturned the original High Court ruling. The appeal court ruled the weather which claimed the MV Ocean Victory was an abnormal occurrence and there was no breach of the safe-port warranty by charterers. Instead, the vessel’s loss will have to be met by China National Chartering and its insurer Gard. The appeal court ruling could have significant implications for the Kashima port which has a poor safety record. The same day the MV Ocean Victory was lost, the 171,000-dwt bulker MV Ellida Ace (built 1996) also ran aground while leaving Kashima, and only 18 days earlier the 197,000-dwt Giant Step (built 1985) grounded off Kashima, subsequently breaking up.
Dry Bulk Shipping News - Shipbroker Notes