A recent decision of a specialist tribunal in Dubai could have far-reaching consequences for the maritime industry. In this article Robert Thomas QC, of Quadrant Chambers, and Robert Lawrence and Leonard Soudagar, of Clyde & Co, examine how it is now possible, in certain circumstances, for a shipowner to set up a limitation fund in the UAE.
When Hanjin Shipping went into administration in late 2016, reportedly over 500,000 containers were stranded or arrested at ports worldwide, including many in the Middle East. Cargo owners who find themselves in such circumstances can be critically affected (particularly if the cargo is temperature sensitive, perishable or urgently required), and they will often look to their cargo insurers. This note highlights a number of issues which are likely to arise when a carrier becomes insolvent during a laden voyage, and claims are made under a marine cargo policy in the UAE.
In Bailey & Others (Joint Liquidators of D&D Wines International Limited) v Angove’s Pty Limited1, the Court of Appeal overturned a decision of the High Court, and so permitted the liquidator of an insolvent agent to recover funds due to it from end-customers despite the agency having been terminated.
Background
The global crisis and the rights of foreign creditors of Sovereign States
The global financial crisis has been well documented in the press, with one recent headline in The Times reading “Like Iceland, Ireland can refuse to pay up”. Claims that States face bankruptcy not unnaturally raise the alarm bells for the financial markets. Can States be sued if they default in payment? RPC recently enforced a claim against assets of an EU State, as discussed below...
Bankrupt States: A misnomer