The Ocean Victory – a $137.7 million cautionary tale for charterers

The far reaching scale of port safety warranties and potential liabilities for charterers that may ensue from breaches of those warranties have been highlighted recently in the decision of the Commercial Court in the United Kingdom in Gard Marine & Energy Ltd v China National Chartering Co Ltd.¹ A sub-time charterer was left with an eye-watering $137.7 million liability following the total loss of capesize bulk carrier the 'Ocean Victory'.

On 24 October 2006, while attempting to leave the Japanese port of Kashima during a severe gale, the 'Ocean Victory' encountered strong winds and heavy seas in the fairway and ran aground and broke apart. The vessel had attempted to leave Kashima on the advice of the Charterers' port representative based on a concern that she could not be restrained by moorings and tugs.