Enviroco Ltd v Farstad Supply A/S (The “Far Service”) – Ch D (Gabriel Moss QC sitting as a deputy High Court Judge) – 22 May 2009

Charterparty – Exemption clause allocating insurable risk between owner and charterer and their “affiliates” – Vessel sustaining damage by fire during cleaning of oil tanks by contractor – Owner bringing proceedings against contractor – Contractor relying on exemption clause on basis it was an “affiliate” of charterer – Contractor would have been an “affiliate” had its parent company’s shares not been registered in name of Bank as security under terms of deed of pledge – Whether parent company ceased to be “member” of contractor by reason of pledge – Whether contractor an “affiliate” of charterer

The vessel Far Service was chartered by the defendant (“the owner”) to Asco UK Ltd as charterer (“the charterer”). On 7 July 2002 the claimant contractor (“the contractor”) was instructed to clean the oil tanks of the vessel. Whilst the tanks were being cleaned by the contractor’s employees a fire occurred in the engine room causing substantial damage. The owner brought proceedings against the contractor in Scotland for damages, claiming about £2.7 million.