Implied indemnity and the Inter-Club Agreement

 

When an owner settles cargo claims, is the Inter-Club Agreement (ICA) the exclusive means of seeking recovery from a charterer under a charter containing the ICA, or can recovery be made under the implied indemnity? This was the issue before the tribunal in London Arbitration 19/17. The head owners settled claims under the bills of lading in respect of condensation damage to a cargo of steel carried from various ports in China and Taiwan to Antwerp. The principal cause of sweat developing was the difference in the ambient temperature between the Chinese loading ports and the loading port in Taiwan. The head owners then recovered a contribution from the time charterers under the ICA which was incorporated into the charter, which was on NYPE form. The disponent owners then sought to recover the full amount of what they had paid the head owners from their sub-charterer. The sub charter was also on NYPE form incorporating the ICA. They claimed this by way of an implied indemnity, on the ground that the claims had arisen as a consequence of following charterers’ orders to load cargo into the same holds at different ports with varying temperatures, so resulting in the cargo sweat which damaged the cargo.

 

The tribunal rejected this claim on two grounds. First, the disponent owners had agreed to a voyage, which inevitably involved the possibility of loading cold cargo which then had to be carried through warmer waters to the destination and the risk of cargo sweat occurring was something the disponent owners had agreed to undertake. Second, for cargo claims the implied indemnity gave way to the express provision that cargo claims were to be apportioned between owners and charterers in accordance with the ICA. On the facts these cargo claims were subject to 50-50 apportionment under cl. 8(d).

 

 

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