O voyage-charted their vessel The Costa Lotta to VC, to carry a consignment of crude oil from Piraeus (Greece) to Southampton (the UK). VC own The Jolly Roger. VC are domiciled and have their place of registered business in Piraeus. VC have no agents, nor any business activity in England at all.
During the voyage to carry the oil, The Costa Lotta got into difficulties due to especially bad weather conditions that arose whilst she was in the Mediterranean going towards the Italian coastline. The master of the vessel, Captain Hook, ordered the vessel close into the shoreline and gave a “mayday” call to the Italian Coastguard. A salvage company agreed to assist The Costa Lotta, which was at this initial stage refused refuge at any Italian port. By the time salvage terms were agreed, a considerable amount of the cargo of crude oil had escaped from The Costa Lotta into the surrounding seawater. The salvage company sent their vessel, Thunderbird, to assist The Costa Lotta, and Captain Hook signed a LOF 2000 with the SCOPIC provisions. The salvage operation succeeded in rescuing The Costa Lotta and stopping further oil from escaping. The salvors also provided an effective clean up procedure, which greatly minimised the impact to the environment of the oil that had escaped into the sea. That damage to the environment was minimised was due not only to the specialist skills in oil pollution control of the master of Thunderbird, but also to the considerable efforts made by Captain Hook and his crew.
The Costa Lotta was eventually given refuge by the Italian authorities, and towed into the Ligurian Sea and into the Port of Genoa. Much of her cargo had been lost. Although the clean-up operation appeared to have successfully contained the oil, the neighbouring French authorities were concerned to monitor the arrival of The Costa Lotta into Genoa. When The Costa Lotta arrived within the jurisdiction of the Port, Captain Hook was detained by the Port Authorities to give a detailed report of the incident. The Authorities have now refused to release him and there are suggestions that he might be prosecuted for his part in the occurrence of the incident. The French authorities have also threatened to prosecute the owners of the vessel for the perceived threat of oil damage to the French Rivera coastline (such damage would be most detrimental to the tourist industry there).
The salvors are now pressing O for remuneration for the salvage operation, but O are avoiding them. O have now in fact sold The Costa Lotta to Sergio’s Ltd, a company owned by Bruno, who has been interested in this vessel for some time. Bruno knows nothing about the salvage matter between O and the salvors.
VC have failed to complete payment of agreed freight for the above charter of The Costa Lotta, which was due when the vessel sailed from Piraeus. VC are of the view that the vessel encountered difficulties and lost her cargo because of the master’s incompetence. VC argues that this entitles them to set-off the freight owed against damages that will arise for loss and damage to the cargo.
O have just been informed by their agent that The Jolly Roger is due to berth in Liverpool (UK) within the next few days.
Answer ALL three parts of this question:
The marks for this question will be awarded for overall merit and will not be divided equally between each part.
(a) Will O be successful in a claim against VC for the outstanding freight, and if so, what procedural steps could they take in order to bring the claim?
(b) Critically consider the issues arising in any salvage claim in the above scenario.
(c) Critically evaluate the modern determination to use criminal law in the regulation of ship-source pollution.
PART B (Word limit: 1, 000 words)
Critically evaluate the approach adopted by the English courts in their determination of the “proximate cause” element in a marine insurance claim.
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