Nick Parton would like to clear up a misunderstanding circulating about the Court of Appeal judgment in this case.
It is being said that the Court of Appeal specifically held that a P & I Club guarantee is the only alternative now allowed to a payment of cash into court in order to set up a limitation fund. The relevant paragraph of Dame Elizabeth Gloster’s judgment actually said:
51. “For the above reasons, I would allow this appeal and declare that, as a matter of law, Owners are entitled to constitute a limitation fund under the 1976 Convention, by means of the production of a guarantee. As agreed prior to the hearing by all relevant parties, if and so far as is necessary, detailed consideration of the adequacy of the LOU offered by The Standard Club Europe Limited, will be dealt with by the Admiralty Court.”
The position therefore is that a guarantee issued by entities other than a P & I Club could also potentially be used to set up a limitation fund in England.