Supreme Court Rules Ransom Negotiation Expenses Recoverable In General Average

The Supreme Court has today vindicated the position taken by the shipowners in a claim arising out of the seizure of the MV Longchamp by Somali pirates, Mitsui & Co Ltd v Beteiligungsgesselschaft LPG Tankerflotte MBH & Co KG. The successful shipowners, represented by Stephenson Harwood partner Duncan McDonald and associate Mary Dodwell, claimed for general average contributions under Rule F of the York-Antwerp Rules 1974 in relation to the vessel's operating expenses incurred during the period of negotiation of a ransom with the pirates. Rule F allows the recovery of "substituted" expenses, being those incurred "in place" of another expense where that other expense would itself have been allowable in GA.