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'''England'''
'''Pacific Pearl Co Ltd v Osios David Shipping Ltd (The “Panamax Alexander” and “Osios David”)'''
'''English Court of Appeal: Lewison, Males and Snowden LLJ: [2022] EWCA Civ 798: 14 June 2022'''
Case note contributed by Jim Leighton, LLM (Maritime Law), LLB (Hons), BSc (Hons), Solicitor Advocate of England & Wales, IMI Qualified Mediator, LMAA Supporting Member and International Contributor to DMC’s Case Notes
'''Background''''
As a result of a collision between three vessels (“Panamax Alexander”, “Osios David” and “Sakizaya Kalon”) in the Suez Canal, the owners of the vessels, via their IG P&I Clubs, entered into ASG 2 form Collision Jurisdiction Agreements, for the purpose of English law and jurisdiction applying to the resolution of the possible disputes that would arise between the parties regarding the apportionment of liability for, and the quantum of damages due to each party resulting from, the collision. Clause C of the ASG 2 form provided “Each party will provide security in respect of the other’s claim in a form reasonably satisfactory to the other.” The ASG 1 form LOU wording of security was what was contemplated to be provided by the other party’s P&I Club.
The judgment of the Court of Appeal was handed down by Males LJ (with whom Snowden and Lewison LLJ agreed). The key grounds of appeal (concerning the reasonableness of the security offered and whether there was an obligation to accept reasonable security if offered) were each addressed in turn by Males LJ.
'''Obligation to Accept Reasonably Satisfactory Security'''
Males LJ, in reversing the decision of the High Court on this issue, did so for the following reasons:
(e) Alternatively, if necessary, the same conclusion should be reached by way of an implied term that a party offered security in a reasonably satisfactory form would accept that security within a reasonable time (which in practice would likely be of short duration). That was because such a term was necessary as a matter of business efficacy and was so obvious that it went without saying, for much the same reasons as already indicated in relation to construction since, without such a term, the objective of the parties to avoid the costs and delays caused by an arrest would not be achieved.
'''Whether Security Offered Reasonably Satisfactory'''
Males LJ, in reaffirming the decision of the High Court on this issue, did so for the following reasons:
