The UK Court of Appeal has turned down a bid by trader Glencore to overturn a ruling that it must indemnify pool operator Navig8 in a tanker dispute.
Glencore had appealed the Navig8 claim regarding letters of indemnity (LOIs) on the grounds it was time-barred by a clause in a voyage charterparty.
Lord Justice Peregrine Simon said the appeal hinged on whether the obligations and rights contained in two LOIs issued in 2016 by Glencore were subject to the three-month limitation provisions in the voyage charter.
Two issues were raised: whether these charter provisions were incorporated into the Glencore LOIs, and, if so, was the effect of the time limit clause such that no claims could be made after the limitation period?
Justice Simon found in favour of Glencore on the second point, but in favour of Navig8 on the first, rejecting the appeal.
He ruled that the voyage charter and the Glencore LOIs are quite distinct agreements with separate and discrete rights and obligations, with disputes under the former to be resolved by arbitration and disputes under the latter to be resolved by litigation in the high court.
"In these circumstances I agree with the judge that the Glencore LOI neither provided in terms, nor are to be treated as including, any limitation on their validity."
The case arose from a high court judgement in March that Glencore must indemnify Songa Chemical and Navig8 Chemical Pool against a tanker cargo claim by French lender Societe Generale (SocGen).
In the lower court, Justice Andrew Baker had found that LOIs applied in the case of a shipment of 19,000 tonnes of sunflower seed oil on the 20,000-dwt Songa Winds (built 2009) in 2016.
