Posted on: 12 May 2020
The MIRACLE HOPE – who has to put up security in a chain of LOIs, how much and when?, ask Robert Thomas QC (pictured) and Ben Gardner of Quadrant Chambers in a recently published article.
Teare J handed down judgment on 27 April 2020 in two related actions: Trafigura Maritime Logistics v Clearlake Shipping and Clearlake Chartering USA v Petroleo Brasileiro. The Judge handed down a further, consequential judgment on 6 May 2020. The judgments provide some important guidance about the requirements imposed by the International Group of P&I Clubs’ standard letter of indemnity (“LOI”) wording and the position of intermediate parties in an LOI chain. Robert Thomas QC and Ben Gardner appeared for the Clearlake parties in the middle of a chain of LOIs, instructed by Andrew Purssell and Karnan Thirupathy of Kennedys.
Trafigura was the time charterer of the vessel MIRACLE HOPE. Trafigura sub-chartered the vessel to Clearlake, and Clearlake sub-chartered to Petrobras on back-to-back terms, for a voyage carrying 1 million barrels of crude oil from Brazil to China. The charterparties permitted the charterers to order discharge without production of bills of lading against owners’ standard LOI wording. Clearlake was therefore in a back-to-back position between Trafigura and Petrobras.
Petrobras requested discharge to receivers without production of the bills, which Clearlake passed on to Trafigura and Trafigura passed… Use this link to read the article in full.