MITSUI & CO LTD AND OTHERS V BETEILIGUNGSGESELLSCHAFT LPG TANKERFLOTTE MBH & CO KG AND ANOTHER (THE "LONGCHAMP")

[2014] EWHC 3445 (Comm), Queen's Bench Division, Commercial Court, Stephen Hofmeyr QC, sitting as a Deputy High Court Judge, 24 October 2014

General average - Substituted expenses - Piracy - Hijacked vessel held - Ransom demand followed by negotiations - Expenses incurred during negotiation period - Whether allowed in general average - York-Antwerp Rules 1974

In 2009 the defendant shipowners' chemical tanker MV Longchamp was hijacked by pirates in the Gulf of Aden and held in Somalia for about two months until a ransom was paid. The initial demand was for about US$6 million and the amount ultimately paid was US$1.85 million. The bills of lading stated that general average should be settled according to the York-Antwerp Rules 1974. The dispute between the claimant cargo interests and the defendants concerned the sole question whether certain expenses were allowable in general average under Rules A and F of the York-Antwerp Rules 1974. The expenses in question were professional media response services, crewÂ’s wages, high-risk bonus payments to crew, bunkers and telephone charges. The defendants' contention was that such expenses were claimable in general average, because they would not have been incurred if the first ransom demand had been met, and were therefore to be substituted for a higher ransom.