Indemnity claims arising under charters

Legal news

Published: 13 April 2015

If the owners of a vessel suffer a loss which is effectively caused by complying with the charterers' orders, the owners may be entitled to an indemnity from the charterers. However, an indemnity is not automatic, and will depend on the factual circumstances of each case and in particular the terms of the relevant charter party.

This article provides an overview of some of the leading cases on the subject, and also examines some actual indemnity cases in which the author has been instructed.

Members will be aware that in some of the situations described in the article, for instance where clean bills of lading are issued in spite of claused mates' receipts, owners' P&I cover will be jeopardized. Although an indemnity may be available from the charterers, it can never be taken for granted. Accordingly, owners are always advised to thoroughly consider the ramifications of agreeing to issuing clean bills in situations where they probably should have been claused.

The Association is grateful to Alison Shaw-Lloyd of Shaw-Lloyd & Co for providing this article.

Kristian Valevatn, Senior Claims Executive, Lawyer, Skuld Bergen 

See attached PDF for complete article.