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'''Background'''
The appeal arose out of the constructive total loss of “Ocean Victory” when, in attempting to leave Kashima port in Japan during a severe storm in October 2006, she contacted the northern end of the south breakwater, wen¬t went aground and thereafter broke in two, necessitating her removal.
Owners of “Ocean Victory” had demise chartered her to a related company, on the Barecon 89 form. That company in turn period time chartered her to Sinochart, which in turn trip time chartered her to Daiichi (with all charterparties containing a materially identical safe port undertaking) for a voyage which encompassed the call at Kashima port.
The judge at first instance had held that there had been a breach of the safe port undertaking and awarded Gard substantial damages for loss of vessel (USD88.5m), liability for SCOPIC (Special Compensation P & I Clause) expenses (USD12m), liability for wreck removal expenses (USD34.5m), and loss of hire (USD2.7m).
The Court of Appeal set aside the judgment holding that (a) the conditions which affected Kashima port were an abnormal occurrence; in consequence there was no breach of the safe port undertaking, and (b) the insurance provisions in the demise charterparty meant Gard, as assignees of owners, were not entitled to claim against demise charterers in respect of losses covered by the hull insurance.[[http://www.onlinedmc.co.uk/index.php/Gard_Marine_%26_Energy_v_China_National_Chartering_-_The_Ocean_Victory_-_Court_of_Appeal]]
The issues for decision on appeal to the United Kingdom Supreme Court were:
Footnote 3: CMA CGM S.A. v Classica Shipping Co Ltd [2004] 1 Lloyd’s Rep 460, [2004] EWCA Civ 114
Footnote 4: The “CMA Djakarta” (fn2fn3), per Longmore LJ, at [10]
Footnote 5: Articles 1 and 2 of the 1976 Convention provide:
