Coexisting liabilities - The Ocean Victory and commercial practice

During the revision of the industry standard contract for bareboat charters, BARECON, a unique opportunity to address a drafting issue presented itself. Towards the end of the revision process, the UK Supreme Court gave judgment in Gard Marine & Energy Ltd v China National Chartering Co Ltd and Another (The Ocean Victory).1

On the point of insurance, the majority view was that the insurers could not recover their losses from the third-party time charterers because the owners and bareboat charterers were co-assured. The insurance and total loss provisions of BARECON have now been updated with the aim to ensure such recovery. Where the position that flows from judgments is not in line with commercial practices, BIMCO seeks to provide outcomes that are better aligned with these expectations.