Rejecting The ‘Reasonably Satisfactory' Offer Of Security: Reasonable To Refuse?

Background

The present case concerned a collision in the Suez Canal in July 2018 between three vessels, PANAMAX ALEXANDER, SAKIZAYA KALON and OSIOS DAVID, the first of which had been on route to Iran. At the time of the collision, President Trump had announced the re-introduction of sanctions against Iran.

In English law, and in many other jurisdictions, the arrest of a vessel is a means of establishing jurisdiction and of obtaining security in maritime claims. Arrest is costly, however, and may not be the ideal way to do either. As a result, the owners of ships involved in a collision often enter into a jurisdiction agreement and exchange letters of undertaking from each owner's P&I Club (or Hull Underwriters) by way of security ("LOUs").