Interlegal succeeded in defense of Shipowner’s legal interests under the case on EWRI insurance recovery by the Charterer
19 February, 2025
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Charterer’s rejection to recover EWRI in full.
The parties entered into the Time Charter Party, whereunder the Shipowner should provide and pay for the all insurance of the vessel, while EWRI (extra war risks insurance) to be for Charterer’s account. However, while the vessel was calling at the Gulf of Aden and the Persian Gulf, war risk insurance rate for those regions significantly increased; therefore, the Charterer rejected to recover insurance in favor of the Shipowner in full, referring to the following clause of the Time Charter:
“Any extra war risk insurance above Owners basic premium is to be for Charterers account, but to be no higher than the lowest relevant Lloyd’s of London rates and to include any rebate”.
Therefore, the Charterer, having applied solely to the contract terms, tried to reduce war risk insurance recovery amount as much as possible.
Despite the allegedly unambiguous terms of the Time Charter, Interlegal law team did its best to hold a series of constructive negotiations with the Charterer. The latter, in turn, was represented by the English leading law firm. Negotiations resulted in signing of a settlement agreement.
Our lawyers analyzed in detail the additional clauses incorporated in the Time Charter, such as BIMCO Conwartime 2004 Clause, and essentially strengthened the Client’s position by the English case law principles governing the Agreement. After that, we facilitated dispute settlement between the Parties on the most acceptable and favorable terms for the Client. Following long-term negotiations, the parties signed a settlement agreement, whereunder the Charterer reimbursed EWRI costs as soon as possible, maximum close to the amount paid by the Shipowner at the very beginning.
Such result not only facilitated defense of the Client’s interests but also helped the Client to preserve reliable commercial relations with the Charterer for the purpose of further cooperation. If you face similar problems during your fleet operation, please do not hesitate to contact us. We are always ready to become your reliable partner in settlement of complex legal issues.
Interlegal law team led the case: associate attorney Taras Dragan and lawyer Diana Mykhailova, managed by partner Karyna Gorova.
