Ship Owners Pay Dearly for Failing to Meet Litigation Deadline

A case concerning a maritime collision at the entrance to a Black Sea port serves as a warning to all that litigation deadlines are strictly enforced and that failing to meet them – even by a matter of hours – can have disastrous consequences.

Two vessels suffered damage when they collided in fog. The owners of vessel A put their losses at about $800,000 whereas the owners of vessel B said the costs of repairing their vessel came to $28,000. Following lengthy negotiations between the owners, the owners of vessel B offered to settle the issue of liability on a 50/50 basis.

Both owners had already twice agreed to extend the two-year statutory time limit for launching proceedings. However, as part of their settlement offer, the owners of vessel B set a strict deadline by which proceedings had to be issued and stated that their offer would not remain open beyond that date.

Proceedings were issued by the owners of vessel A some hours after the deadline had passed. They nevertheless sought to persuade the High Court that time for the service of proceedings should be extended and that the settlement offer remained open for acceptance.

Ruling in favour of the owners of vessel B, the Court found that the terms of the offer were crystal clear and that it had lapsed on the deadline's expiry. An extension of time was also refused. In those circumstances, the proceedings had not been validly served and the Court had no jurisdiction to try the claim.

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