Newcastle Protection and Indemnity Association v Assurance Foreningen Gard Gjensidig (The “Labrador”) - QBD (Com Ct)(Colman J) - 24 April 1998

Time-charterers’ P & I Club giving counter security to shipowners’ P & I Club - Shipowners’ P & I Club settling cargo claim and seeking indemnity from charterers’ Club - Liability as between charterers and shipowners incapable of determination by arbitration in accordance with charterparty because charterers dissolved - Whether shipowners’ Club entitled to indemnity under the counter security - Whether settlement reasonable

The owners of the vessel Labrador were in the Newcastle P & I Club (“the plaintiff”) and the time-charterers were in the Gard P & I Club (“the defendant”). While the Labrador was discharging a cargo of bagged fishmeal at Oran, the cargo in two of the holds caught fire. The shipowners declared general average. The receivers of the cargo threatened to arrest the vessel and demanded security in the sum of US$1,411,115. The plaintiff provided a guarantee to the receivers on behalf of the shipowners.