24/06/2022

Shagang Giant

NKD Ltd v Bart Maritime

Decision of the Honourable Mr Justice Butcher of 24 June 2022.

The dispute arose directly out of COVID-19 lockdown restrictions imposed by the Government of India during March and April 2020 and their impact, if any, on Bart’s ability to transfer title of the vessel to her intended buyers, NKD. In April 2020 NKD had purported to terminate the MOA on grounds of force majeure arguing that the Indian Government lockdown rendered Bart unable to transfer title and/or NKD unable to accept transfer of title over the vessel. NKD sued Bart for the return of the deposit paid to Bart in advance under the terms of an amended MOA.

Following a seven day trial held before the honourable Mr Justice Butcher in the Commercial Court, NKD’s claim for the return of their deposit paid to Bart was dismissed. Mr Justice Butcher also held that NKD’s termination on grounds of force majeure was an act of default under the terms of the MOA. He further held that Bart’s counter-claim succeeded to the extent that they were entitled to a declaration that they could retain the deposit paid to them by NKD in full.

The decision is an important and timely one given it turned directly on the construction of a force majeure clause and on a party’s “ability” to perform specifically in the context of effecting transfer of title over a vessel. Consideration of the direct impact of COVID-19 lockdown restrictions on such “ability” was a key issue arising. Mr Justice Butcher’s decision also provides useful dicta and guidance as to the principles of construction to be applied to similarly worded MOAs, in particular regarding the distinction between “delivery” and “transfer of title” over a vessel.

Timothy Young QC and Colleen Hanley acted for the successful Defendant, Bart Maritime, the owners and sellers of the “Shagang Giant”, a VLOC (very large ore carrier) vessel destined for green recycling in Alang, India. They were instructed by Wikborg Rein, London.

Read the judgment