English Court of Appeal decides P&I Club LOU is acceptable to constitute limitation fund in UK
The English Court of Appeal (CoA) ruled on 6th March, 2014 in the case of ATLANTIK CONFIDENCE, that a limitation fund under the 1976 Limitation Convention (implemented in the UK by the Merchant Shipping Act 1995) can be constituted by way of a P&I Club LOU, as opposed to a cash deposit. This overturned the English High Court which held that owners could only establish a limitation fund through a cash deposit and that a P&I Club LOU was unacceptable. The International Group submitted a letter in support of owner’s appeal, which the court commented was helpful.
This is a very important decision and will be welcomed by shipowners and P&I Clubs alike. Clyde & Co represented the owners and their P&I Club and below is a link to their article and the CoA judgment.