METALL MARKET OOO V VITORIO SHIPPING CO LTD AND ANOTHER (THE "LEHMANN TIMBER")

[2013] EWCA Civ 650, Court of Appeal, Civil Division, Lady Justice Arden, Lord Justice Patten, Sir Bernard Rix, 7 June 2013

General Average - Exercise of lien - GA guarantee and GA bond - Vessel suffering general average events - Piracy - Engine failure - Shipowner requesting from consignee a bond and insurer's guarantee or cash deposit - Shipowner only receiving insurer's guarantee - Whether lien for cargo's general average contribution thereby waived - Shipowner exercising lien for general average contribution - Whether thereby prevented from recovering cargo storage expenses - Shipowner entitled to recover storage and other expenses incurred in exercising lien over cargo following discharge

This was the appeal and cross-appeal of the parties of the judgment at first instance of Popplewell J ([2012] 2 Lloyd's Rep 73) following an arbitration award decided in favour of V, the disponent owners of the vessel Lehmann Timber. The vessel was captured by Somali pirates and then released when ransom was paid by V. Four bills of lading with MMO as consignee had been issued providing for adjustment of general average in accordance with the York-Antwerp Rules in London and incorporating the terms of a charterparty including English law and London arbitration clauses. After ransom was paid by V, the vessel sailed for a port of refuge. She then suffered an engine breakdown upon which V declared general average and held MMO liable for 28.82931 per cent of the GA disbursements. MMO refused to provide a bond or cash deposit for any part of the cargo, but an insurers' guarantee was provided for the cargo carried under bill of lading no 4. V exercised their lien over the cargo and took it to Hamina, Finland, where it was discharged into a warehouse, incurring storage charges. In the arbitration, V sought to recover MMO's contribution to GA and the costs of preservation of cargo. The arbitral tribunal decided in favour of V on both claims. Upon appeal, Popplewell J upheld the arbitrators' decision that a GA guarantee was insufficient security without a GA bond and that retaining the GA guarantee alone could not be said to be inconsistent with continuing to exercise the lien; but held in favour of MMO that V could not recover storage costs. Both sides appealed.