Breaking the unbreakable. Owners’ limitation claim scuttled.


Under article 4 of the 1976 LLMC the right to limit is lost if the party challenging limitation can prove that the loss resulted from his personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result. This is an extremely high hurdle to surmount and the right to limit has been regarded as virtually unbreakable – until now.


In The Atlantik Confidence Kairos Shipping Ltd & Anor v Enka & Co LLC & Ors [2016] EWHC 2412 (Admlty) (11 October 2016) Teare J. held that the right to limit was lost in circumstances where the cargo was lost following a decision by the owners to scuttle the vessel. Cargo had managed to establish that the vessel was lost due to a deliberate starting of a fire by the master and chief engineer upon the instructions of the  alter ego of the Owners, Mr. Ahmet Ali Agaoglu, the sole shareholder and director. Teare J. concluded: “In those circumstances the loss of the cargo resulted from his personal act committed with the intent to cause such loss. The loss of the cargo was the natural consequence of his act as he must have appreciated. There can be no doubt that he intended the cargo to be lost just as much as he intended the vessel to be lost.”

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Professor Simon Baughen

Professor Simon Baughen was appointed as Professor of Shipping Law in September 2013 (previously Reader at the University of Bristol Law School). Simon Baughen studied law at Oxford and practised in maritime law for several years before joining academia. His research interests lie mainly in the field of shipping law, but also include the law of trusts and the environmental law implications of the activities of multinational corporations in the developing world. Simon's book on Shipping Law, has run to seven editions (soon to be eight) and is already well-known to academics and students alike as by far the most learned and approachable work on the subject. Furthermore, he is now the author of the very well-established practitioner's work Summerskill on Laytime. He has an extensive list of publications to his name, including International Trade and the Protection of the Environment, and Human Rights and Corporate Wrongs - Closing the Governance Gap. He has also written and taught extensively on commercial law, trusts and environmental law. Simon is a member of the Institute of International Shipping and Trade Law, a University Research Centre within the School of Law, and he currently teaches at Swansea on the LLM in:Carriage of Goods by Sea, Land and Air; Charterparties Law and Practice; International Corporate Governance.

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