Court Of Appeal Reverses High Court Decision On Constitution Of Limitation Funds By P&I Club Lous

In Cosmotrade SA v Kairos Shipping Ltd ("The Atlantik Confidence") [2014] EWCA Civ 217, the Court of Appeal reversed the High Court's first instance decision that English law does not allow constitution of a Limitation Fund by P&I Club Letter of Undertaking.

First Instance Decision

The first instance decision was reported in a previous blog post. The Court considered whether a Limitation Fund could be constituted by lodging a P&I Club LOU into court, and held that it could not. Simon J found that there must be a specific statutory provision stating that a guarantee is acceptable to constitute a Limitation Fund. English law contained no such...