Home News Business Law Sanctions Give Rise to Shipping Dispute

Sanctions Give Rise to Shipping Dispute

Sanctions imposed by western governments on numerous very wealthy individuals have inevitably resulted in some dislocation of world trade. A Court of Appeal case on point concerned the right to possession of a merchant vessel that had for many months been marooned in Syrian waters.

The vessel was chartered by companies that were owned, both legally and beneficially, by a businessman who had been sanctioned by the United States Government as a specially designated global terrorist.

There was no dispute that the designation amounted to an event of default and the vessel’s owners gave notice to terminate the charter contract. They said that they would repossess the vessel at her next port of call. The charterers, however, disputed their right to do so and caused the vessel to proceed into Syrian waters, where she had remained for almost a year.

Following a trial, a judge in London ruled that the charter contract had been lawfully and effectively terminated and that the owners were entitled to possession of the vessel.

In dismissing the charterers’ appeal against that outcome, the Court found that the judge gave true effect to the written terms of the charter contract, whilst having fully in mind its commercial background and the consequences of his decision. He was unimpressed by the charterers’ argument that enabling repossession of the vessel would represent a colossal windfall for the owners.

The judge was entitled to find that the charterers had, by their misconduct in and in relation to the proceedings, precluded themselves from seeking relief from forfeiture.

Published in
16 August 2022
Last Updated
26 October 2022