TENACITY MARINE INC V NOC SWISS LLC AND ANOTHER

[2020] EWHC 2820 (Comm), Commercial Court (QBD), His Honour Judge Pelling QC (sitting as a High Court Judge), 13 October 2020

Procedure – Letters of indemnity – Mandatory order enforcing a letter of indemnity – Whether liability engaged – Language constituting a threat to arrest the vessel – Impossibility of compliance with order

The claimant owners of the motor tanker Tenacity sought orders giving effect to a letter of indemnity (LOI) issued by the respondent time charterer, NOC. In the LOI, NOC had agreed to indemnify the claimant in respect of any losses caused by the discharge of a cargo of diesel oil in accordance with NOC’s instructions, in circumstances where NOC could not produce the original bills of lading. NOC in turn applied for a similar order against Gulf Petrochem FZC (GP), which was a Part 20 defendant. GP had chartered Tenacity from NOC under a voyage charter and had issued an LOI to NOC in functionally similar terms and for similar reasons.