ON THE HORIZON - 2025 Shipping Case Digest. Holding course in rough waters

Introduction

As the industry continued to work through the residual effects of COVID-era delays, contract backlogs and supply-chain disruption still featured in disputes reaching the English courts. That context framed January’s decision in Bunge SA v Pan Ocean Co Ltd (The Sagar Ratan) [2025] EWHC 193 (Admlty), which addressed the BIMCO Infectious or Contagious Diseases Clause for Time Charter Parties 2015. The Admiralty Court upheld the tribunal’s award in favour of charterers, holding that the discharge port was not an “Affected Area” merely because the crew had contracted COVID-19. Since the quarantine arose from the specific infection status of the crew as opposed to any general restrictions applicable to vessels, the clause was not triggered, and the vessel remained off-hire.

At the same time, geopolitical realities began to come to the fore. In March, Berytus Insurance & Reinsurance Co SAL v Golden Adventure Shipping SA (The Rubymar) [2025] EWHC 664 (Comm) produced the first Commercial Court decision arising out of the Red Sea conflict. Here, the Court refused to stay English proceedings brought by insurers under an asymmetrical law and jurisdiction clause, holding that the clause fell outside the scope of the Hague Convention on Choice of Court Agreements and that the parties’ choice to allow non-exclusive, asymmetric jurisdiction carried with it the foreseeable risk of parallel proceedings.

Sanctions

Sanctions and compliance issues featured prominently in this year’s decisions, with two judgments handed down the same day offering contrasting illustrations of how far owners may go when faced with a perceived sanctions risk.

In Tonzip Maritime Ltd v 2Rivers Pte Ltd (The Catalan Sea) [2025] EWHC 2036 (Comm), owners refused to load a cargo at Ust-Luga after sanctions screening flagged the shipper, a Russian oil trader, as linked to a designated individual. Relying on an EPS Sanctions Clause, owners argued that performing the voyage could expose them, their insurers and crew to sanctions. Charterers treated the refusal as a repudiatory breach and cancelled the charter. The Commercial Court accepted that such clauses may, in principle, be triggered by a real risk of sanctions exposure, not only by an actual breach, but stressed that owners’ judgment must be reasonable and supported by credible evidence. On the facts, the connection between the shipper and the sanctioned individual was historic and unsubstantiated, and owners failed to make the enquires that a prudent operator would have undertaken. Their refusal to perform was therefore unjustified and amounted to a wrongful termination of the charter.

A different outcome followed in Ceto Shipping Corporation v Savory Shipping Inc (The Victor 1) [2025] EWHC 2033 (Comm). The tanker Victor 1 was on a bareboat charter, with title to pass to charterers at the end of the term provided all sums due under both the charter and a related management agreement had been paid. When a proposed sub-charter involved Iranian-origin oil with indications that the cargo might be routed to Venezuela, owners and managers declined to perform, citing the serious risk of US sanctions exposure. The Commercial Court held that their decisions fell within the “reasonable judgment” permitted by the clause, noting the high likelihood that participation in the voyage could have led to designation under US regulations. It also found that charterers were not entitled to the transfer of title, as the condition requiring payment of all sums due at the expiry of the charter was strict and had not been met.

These decisions highlight the fine balance now facing shipowners between commercial performance and sanctions compliance. The English courts continue to apply a pragmatic test: genuine, well-founded caution will be respected, but vague or speculative fears will not.

Limitation of liability

The year also saw a steady stream of authorities refining long-standing shipping doctrines. The Supreme Court’s judgment in MSC Mediterranean Shipping Company SA v Conti 11 Container Schiffahrts-GmbH& Co KG MS (The MSC Flaminia) [2025] UKSC 14 is arguably the year’s headline decision, while the Admiralty Court’s judgment in Réseau de Transport d’Électricité v Constain Ltd [2025] EWHC 73 (Admlty) also provides clarification on the scope and timing of limitation rights.

In The MSC Flaminia, the Supreme Court addressed whether a charterer could limit liability as a “shipowner” under the 1976 Convention for claims brought by owners following an explosion and fire on board caused by dangerous cargo. The Court held that charterers do have the right to limit liability for owner claims, clarifying that the Convention is neutral as to the identity of the claimant. However, the Court confirmed that damage to the vessel itself does not fall within the scope of limitable claims, whereas costs that fall within Article 2.1(e) (e.g. removal or destruction of cargo) may be limited even if incurred by owners. This decision clarifies the boundary-lines of limitations, namely that the benefit of limitation applies widely in theory, but only for a defined scope of claims.

In Réseau de Transport d’Électricité v Constain Ltd [2025] EWHC 73 (Admlty) the facts concern the damage, in 2016, of two high-voltage undersea cables after anchors of the dumb barge Stema Barge II dragged across them during a storm in the English Channel. The Admiralty Court considered whether Stema UK, a company within the same corporate group as the barge owner, could invoke limitation rights under Article 1(4) of the Convention (which extends limitation rights to persons for whose acts or defaults the shipowner is responsible), and whether res judicata, cause of action estoppel or abuse of process barred the late-raised limitation argument. It was held that the right to limit is substantive for the purposes of cause of action estoppel and that Stema UK was precluded from resurrecting its limitation defence because the issue had already been determined and permission to appeal refused. The ruling underscores that limitation rights must be asserted promptly and cannot be repeatedly recharacterized after final determination.

Contractual Certainty

Contractual certainty remained a recurring theme in 2025, with the courts asked to interpret widely used standard forms in both bareboat charter and ship sale contexts. The decisions in Songa Product and Chemical Tankers III AS v Kairos Shipping II LLC (The Songa Pride) [2025] EWCA Civ 1227 and Orion Shipping and Trading LLC v Great Asia Maritime Ltd (The Lila Lisbon) [2025] EWCA Civ 1210 are likely to become touchpoints for practitioners dealing with BIMCO BARECON and Norwegian Saleform 2012 respectively.

In The Songa Pride, the Court of Appeal addressed the BARECON 2001 form (with wording unchanged in BARECON 2017), specifically the interplay between clauses 28 and 29 on repossession following early termination. The Court confirmed that “current or next port of call” is the primary mechanism for repossession, and that the reference to a port “convenient” to owners is a fallback only where the current or next port is impracticable. This restores commercial common sense to BARECON repossession clauses and underlines the courts’ preference for interpreting even finely balanced wording by reference to its ordinary meaning in the context of the contract as a whole.

Turning to The Lila Lisbon, the Court of Appeal considered whether the standard wording of clause 14 in the Norwegian Saleform 2012 imposed any obligation on the sellers to exercise reasonable diligence to be ready to deliver by the cancelling date, and whether, if the buyers cancelled under that clause in circumstances of “proven negligence”, they could recover loss-of-bargain damages even though the sellers’ breach was not repudiatory. The Court answered both questions in the buyers’ favour, confirming an implied obligation of diligence and the right to compensation for loss of bargain where non-readiness is due to negligence. An appeal to the Supreme Court has been requested, so further clarification may follow.

However, the most significant development in this area arguably came with the Supreme Court’s recent decision in King Crude Carriers SA v Ridgebury November LLC [2025] UKSC 39. This highly anticipated judgment resolved a long-standing debate over whether the Mackay v Dick principle—preventing a party from relying on its own breach to avoid a condition precedent—forms part of English law. The Supreme Court held that it does not. Where a condition precedent to payment is not fulfilled due to a party’s breach, the remedy is damages, not a claim in debt. This clarification reinforces the primacy of the parties’ agreed terms and the importance of certainty and predictability in commercial contracts, particularly for those using the Norwegian Saleform and similar contracts.

Regarding the latter case, it is interesting to note that the Court did not address the principles in Griffon Shipping LLC v Firodi Shipping Ltd (The Griffon) [2013] EWCA Civ 1567. This implies that The Griffon remains good law i.e. where the obligation to pay a deposit has already accrued, the deposit is payable as a debt.