James Watthey succeeds in High Court shipping case

26 Sep 2012

Just released is a written judgment in the case of the Te Hsing, handled by Hardwicke's James Watthey, who represented the successful shipowners. (Te Hsing Maritime SA and Another v Certasig SA and Another – [2012] EWHC B16 (Comm), High Court of Justice, Commercial Division, Stephen Males QC, 15 June 2012)

In that case, a claim was brought by the legal and beneficial owners of the Te Hsing against their hull underwriters after the vessel was rendered a Constructive Total Loss by a fire at sea, which claimed the lives of many crew.  Accordingly, the claim was for the full insured value of the vessel, with an alternative claim for salvage and General Average.

The defendant underwriters made an application for security for costs under CPR Rule 25.13, on the basis that the claimants were resident in Taiwan and therefore outside the EU Judgments Regulation and Brussels / Lugano Convention states.  The application was eventually heard about 3 weeks before trial.

Stephen Males QC, sitting as a Deputy Judge of the Commercial Court, said that security for costs is not available against a person resident out of the jurisdiction unless the applicant is able to show that an English costs order would be unenforceable in the claimants' home jurisdiction, or there would be additional obstacles or burdens in enforcing it, over and above the obstacles or burdens involved in enforcing in a Brussels or Lugano state. While there was no reciprocal enforcement treaty between the United Kingdom and Taiwan, it was common ground that an English costs order would be enforceable in Taiwan. Further, there was neither any evidence nor any reason to believe that the additional delays and expenses involved in seeking enforcement would exceed £20,000, which was less than the value of even the General Average claim. Further, 5 other vessels were beneficially owned by the second claimant, and the defendants could enforce any costs order by arresting in Singapore or elsewhere in the region.  In the circumstances, it was not just to order security.

For more information, contact Julia Weiss, Marketing Manager, on +44 (0)20 7242 2523.