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Demise charter – the demise of your recovery?

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Demise charter – the demise of your recovery?

Insight / Update – 11 September 2020

The recent decision in Fimbank PLC v. KCH Shipping Co. Ltd [2020] EWHC 1765 (Comm) is a stark reminder of the importance in recovery claims of making inquiries as to the existence of a demise (bareboat) charter.

As many readers will know, Owners are not generally liable for cargo damage in cases where a vessel is on bareboat charter. In those cases, the bareboat charterer will be the legally liable party and the correct recovery target. Thereford any time limit will have to be protected against that party. In this case, the Claimant, Fimbank PLC (“Fimbank”) commenced arbitration against Owners, but did not protect time to commence an arbitration claim against the bareboat charterer.

Fimbank then applied to the High Court under section 12(3)(a) and (b) of the Arbitration Act 1996 to extend time for commencing arbitration proceedings against the Defendant bareboat charterer, KCH Shipping Co. Ltd (“KCH”). The decision provides helpful guidance as to the circumstances in which the Court will grant an order extending time to commence arbitration, and a reminder that such orders will not be easily granted by the Court.

Authors

Jai Sharma

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Simon Culhane

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