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“Act” does not import culpability under cl.8(d) of ICA 1996. The Yangtze Xing Hua
The Court of Appeal in The Yangtze Xing Hua  EWCA Civ 2107 has upheld the decision of Teare J that “act” in the phrase “act or neglect” in cl. 8 (d) of the 1996 Inter-Club Agreement means any act, whether culpable or not. The charterers, who had not been paid for the cargo, had ordered the vessel to remain off the Iranian discharge port for four months, during which time the cargo overheated, leading to a claim being brought against the owners, which they settled. Owners were entitled to recover the full amount of the settlement from charterers under the proviso to cl. 8(d): “unless there is clear and irrefutable evidence that the claim arose out of the act or neglect of the one or the other (including their servants or sub-contractors) in which case that party shall then bear 100% of the claim.”
The Court of Appeal has confirmed that the natural meaning of the word “act” was something which is done and did not connote culpability. “Neglect” did connote culpability but in the context of the ICA, which contained various provisions which applied regardless of culpability, this did not colour the meaning of “act”. Under cl.8 the critical question was that of causation, whether the claim “in fact” arose out of the act, operation or state of affairs described.
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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