In the Court of Appeal on appeal from the High Court of Justice
Navig8 Chemicals Pool Inc v Glencore Agriculture BV
This was an appeal by Glencore from the decision of the High Court on 9 March 2018, in which it was held that the claimants (Navig8) indemnity claim under Letters of Indemnity (LOIs) issued by Glencore was not defeated by the operation of a time bar clause in a voyage charterparty as between Navig8 as disponent owners and Glencore as charterers.
The issue before the Court of Appeal was whether the obligations and rights contained in the two LOIs issued by Glencore to Navig8 for discharging without bills of lading were subject to the time limits contained in the voyage charterparty (Glencore LOIs)
The Glencore LOI's were signed by and on behalf of Glencore and there was no mention anywhere on the LOI's of the voyage charter or its terms.
The charterparty provided, inter alia, that the period of validity of any letter of indemnity will be 3 months from the date of issue.
Glencore submitted that this provision in the charterparty must be read into the Glencore LOI's and that its effect is to bar Navig8's claim because it was made after the 3 month period.
Navig8 submitted in response that the Glencore LOI's were stand-alone agreements and therefore not subject to the time limits in the charterparty.
The Court of Appeal held that the Glencore LOI's were documents which set out self-contained obligations and rights and that they neither provided in terms, nor are to be treated as including any limitation on their validity. The argument that the time limit contained in the charterparty was to be regarded as being transposed into the Glencore LOI's was accordingly rejected.
This decision is in line with the current legal position in England that written commercial agreements subject to English law are to be regarded as containing all the terms of the bargain between the parties. Given that letters of indemnity are important commercial instruments, they need to be interpreted robustly and in a straight forward way.
Clyde & Co acted for the successful owners, Songa Chemical AS before the High Court.