Suing and labouring

The suing and labouring clause is found in virtually all modern marine policies. The provision is of some antiquity, and its use is codified by the provisions of s78 of the Marine Insurance Act 1906. However, various aspects of its operation remain uncertain. The issues were discussed by Burton J in Melinda Holdings SA v Hellenic Mutual War Risks Association (Bermuda) Ltd [2011] EWHC 181 (Comm).

Melinda Holdings: the facts

In September 1989 the vessel Safir grounded on coral reefs off Egypt and its cargo of phosphate was spilled into the sea. Proceedings were commenced in Port Said court by Egyptian government entities against five defendants, including Fonderance (a Norwegian company and the vessel’s registered owner) and Seama (a UK company which was, at least in some documents, referred to as the beneficial owner). Judgment was given against the defendants in the sum of 300m Egyptian pounds (about US$51,650,000). The judgment was never satisfied. In addition to the judgment debt, Fonderance and Seama were in December 1996 also made liable for ‘court dues’ in the form of 5% of the judgment debt (US$2,587,500) for transmission to the Egyptian National Treasury, and a further 2.5% of the judgment debt (US$1,293,750) payable to the ‘Health and Social Services fund of the members of the Judicial Authorities’ (the ‘Judges Fund’). The latter sum was used to for the health and welfare of present and former judges and also state lawyers. Neither of these sums was ever paid.