The Maritime Advocate–Issue 709



1. Cross-undertakings in the Context of Freezing Orders – the Sting in the Tail?
2. Jurisdiction Clauses and the US Courts
3. HIV and AIDS, the Facts – UK P&I Comments
4. Navigators Goes Belgian
5. CMA CGM Offers New Insurance Offering
6. People and Places

FOB Network News

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1. Cross-undertakings in the Context of Freezing Orders – the Sting in the Tail?

Maryam Taher and Paris Pantelis have sent in this note on Fiona Trust v Privalov [2016] EWHC 2163 (Comm):-

If a Claimant with a good arguable case shows that the Defendant will probably move his assets beyond reach, the courts in England and Wales will sometimes prevent that. The old Mareva injunction is now a Freezing Order, often with wide financial provisions, and a recent hot topic is the damages that a Defendant can recover if he suffers loss because of it.

The Claimant’s application is usually urgent. The Defendant does not know about it beforehand (as it is made without notice) and the claim may later fail. So the Claimant must first promise to meet any losses that the Defendant incurs as a result of the Freezing Order.

The cross-undertaking

This is called a cross-undertaking in damages. Its usual form is:

“If the court later finds that this order has caused loss to the [Defendant], and decides that the [Defendant] should be compensated for that loss, the [Claimant] will comply with any order the court may make”.

Claimants used to make this promise without thinking much about what might happen later, but a High Court and then Court of Appeal decision have highlighted real dangers here.

The recent case

In Fiona Trust v Privalov [2016] EWHC 2163 (Comm) the Claimant sought over $575 million for alleged bribery and corruption and obtained orders that tied up over $480 million of the Defendant’s assets for many years. However, after a huge trial the claim largely failed and Claimant recovered only $16 million.

The Defendant’s claim

The Defendant then said that if the Freezing Orders had not been made he would have traded in newbuildings and achieved good returns by investing the profit. He claimed over $387 million, almost 25 times the Claimant’s damages award.

Nobody credibly plans and records in advance what they would have done if y amount had not been tied up for z years, so a Defendant has to try to recreate the past.

The court’s approach

The Judge ruled as follows:

1. Depending on how the Defendant has behaved, the court might consider it unfair or unjust to award damages; however, if it does:

2. The court will say that the Claimant had breached a contract – that the Defendant would not be restricted as per the terms of the Freezing Order; so

3. The Defendant gets damages under ordinary contract principles, including causation, mitigation and remoteness; however

4. Some flexibility is necessary, as of course the parties did not really enter into the contract being considered; also

5. A “liberal assessment” is used. This does not mean that a Defendant gets damages for losses that he has not suffered. However, it acknowledges that he might not be able to say precisely how the frozen funds would have been used. So the court will not scrutinise the evidence or claim structure as it otherwise would, because it is hard for the Defendant to be exact; thus

6. If the claim is proved – either on balance of probability or by showing a real and substantial chance of profit – the court will make the best assessment possible, applying percentage discounts to reflect uncertainties.

The result

The Judge held that the Defendant had a 50% chance overall of achieving the claimed profit. Damages calculated accordingly were nearly $60 million, approaching four times that recovered by the Claimant.

This was despite the Claimant’s detailed challenges that (a) the Defendant was a proven habitual liar (b) his claim did not match what he had said at the time (c) he would not have concluded any of the various contracts and (d) the vagaries of the shipping market and the worldwide economy meant there were too many uncertainties.

The result

A cross-undertaking in damages is not a formality that a Claimant can forget about once he gets the Freezing Order. It can involve liability for large damages later on, when a “liberal assessment” will give a Defendant the advantage.

What should a Claimant do?

First, focus early on the size of the claim. Examine this carefully and restrict the Defendant’s use of assets only as far as needed – the smaller the amount involved the less the Defendant will later be able to claim.

Second, keep a continuous record of the evidence, especially as to significant changes, either within material filed by the Defendant or in his market, and note anything that might need investigating later. Perhaps many years afterwards, the key issue will be what the Defendant says he would have done at the time. Keep a close eye on his business activities and any trends in relevant markets.

Third, as far as possible capture and test the evidence of what happened at the time – what the Defendant said and did.

Court of Appeal

Here the Claimant argued that, by failing further to challenge the wording of the Freezing Order, the Defendant had either broken the causation link between the Order and the claim or had failed to mitigate loss.

However, by its decision on 21 November the court rejected that. As a defence to a claim under a cross-undertaking, a Claimant will probably not often succeed in saying that the Defendant could and should have done more, at the time, to attack the specific terms of the Freezing Order.


Defendants claiming under cross-undertakings need to prove loss, but the courts will allow them much leeway. So Claimants seeking Freezing Orders must be:

(a) careful and realistic about claim size;

(b) aware of the Defendant’s market and his activity within it; and

(c) alert to obtain and also test the crucial evidence at all stages.

Lastly, note that these principles are not confined to Freezing Orders, but apply equally to other types of injunction.

2. Jurisdiction Clauses and the US Courts

Vincent de Orchis at the firm of Montgomery McCracken has written recently on the line taken in US Courts in respect of Jurisdiction Clauses. Read the note here:-

3. HIV and AIDS, the Facts – UK P&I Comments

Our inbox contains sage advice from Sophia Bullard, crew health programme director at UK P&I Club:-

“At the end of 2016, there were approximately 36.7 million people living with Human Immunodeficiency Virus (HIV). It is possible to protect against HIV infection, and with the right treatment, people with HIV can live a long and healthy life. Where permitted by local law and with the consent of the individual, the UK P&I Club pre-employment medical examination (PEME) includes consented HIV screening and counselling.

What is HIV and AIDS?

“HIV is a virus which attacks the immune system – the body’s defence against diseases. HIV stays in the body for life, but treatment can keep the virus under control and the immune system healthy. Without medication, people with HIV can develop Acquired Immune Deficiency Syndrome (AIDS) which is the most advanced stage of an HIV infection when the immune systems can no longer fight infections.

“AIDS is life threatening and there is no cure, but if HIV is caught early and treated, it is unlikely to lead to AIDS. It is therefore important that crew members get tested early if they have been at risk of HIV, as it will mean that treatment can be provided that will prevent the development of AIDS.


“HIV is only spread in certain body fluids from a person infected with HIV. These fluids are blood, semen, pre-seminal fluids, rectal fluids, vaginal fluids and breast milk. The following practical measures can greatly reduce crew members chances of contracting the disease:

· Use contraception such as condoms

· Get tested regularly and know your partner’s HIV status

· Don’t share needles with anyone


“HIV medicines slow the progression of the virus in your body. HIV is a type of virus called a retrovirus, and the drugs used to treat it are called antiretrovirals (ARV).These drugs are always given in combination with other ARVs; this combination therapy is called antiretroviral therapy (ART). Many ART drugs have been used since the mid-1990s and are the reason why the annual number of deaths related to AIDS has dropped over the past two decades. Although a cure for HIV does not yet exist, ART treatment can maintain the health of users for many years, and greatly reduces the chance of transmitting HIV to a partner(s).”

4. Navigators Goes Belgian

Sspecialty insurance holding The Navigators Group has entered into a share purchase agreement for the acquisition of all of the shares of Antwerp, Belgium-based Assurances Continentales – Continentale Verzekeringen NV (ASCO) and Bracht, Deckers & Mackelbert NV (BDM).

The proposed acquisition is part of Navigators’ strategy of expanding its specialty insurance expertise to more brokers and insureds across Europe, according to a company statement. As aggregate consideration for the acquisition of ASCO and BDM, Navigators will pay €35 million in cash at the closing of the transaction.

ASCO is a specialty insurance company offering marine and property and casualty insurance. BDM is an insurance underwriting agency that underwrites risk coverage in niche markets on behalf of ASCO and a number of major international insurers.

Additionally, as part of the transaction, Navigators will acquire all the shares of Canal Re SA, a Luxembourg reinsurance company that is a wholly-owned subsidiary of ASCO. The acquisition reinforces Navigators’ presence in the European Union’s single market, enabling Navigators to best serve its European clients after Brexit, and also provides opportunity for BDM and ASCO to take their expertise to a wider European audience.

5. CMA CGM Offers New Insurance Offering

Word reaches us via the estimable Handy Shipping Guide that the giant shipping group is launching a product which rather looks like a standing reproach to the marine insurance offerings of the usual suppliers. It reminds us of many moons ago when a reforming spirit called for one box mutual to “coupez le Crap”. Here is a flavour of the story:-.

The CMA CGM Group has launched its solution to deal with unforeseen events during freight transport. ‘SERENITY by CMA CGM’, what the French container shipping line is calling its new insurance offering, is part of CMA CGM’s self-explanatory (and appallingly named) ‘Customer Centricity’ strategy, which aims puts clients at the centre of the Group’s development.

With ‘SERENITY by CMA CGM’, the company says it is starting a new perfume concept: the commitment to compensate for any kind of unforeseen events, which allows businesses shipping their goods with CMA CGM to be more efficiently protected through a range of value-added products, which have been designed to meet customers’ expectations and needs.

With this product, CMA CGM says it hopes to relieve its customers of all the administrative and procedural complexities in case of unforeseen damage to their cargo.

Accessible: an offer that is accessible to all, businesses or individuals who need to transport goods in one or several containers

International: an international offer, available worldwide at all stages of transport

100% CMA CGM: an offer that is entirely supported by CMA CGM, whatever the country and the means of transportation used.

‘Cargo Value SERENITY’ is the first product in the ‘SERENITY’ portfolio, which allows a quick compensation for businesses whose goods have been damaged or lost during transport for any reason, including natural disasters. It provides for a refund up to 100% of the value of the goods in less than 30 days. The general cost quoted is from $49 per container for cargo valued up to $25,000 per container up to $199 with a £100,000 valuation per box.

A broader range of products under the SERENITY concept are set to be available in the coming month, with plans to offer a product to cover costs in the event of damage to a container during handling, as well as another product to compensate shippers in cases of payment default by their own customers.

[Once upon a time during the teen years of the box industry, Sealand and US Lines offered something along these in respect of cargo loss to their shippers. The notion was for an insured bill of lading–ed]

6. People and Places

Pat Donnelly, of Braemar ACM-GFI, has been elected as Chairman of the Tanker FFA Brokers Association. He replaces Ben Courtney of ICAP Energy who has chaired the group, which represents the worldwide community of tanker Forward Freight Agreement (FFA) brokers, since 2016.

Founded in 1997, the FFABA is the worldwide association for Forward Freight Agreement broking firms. Working with the Baltic Exchange, the FFABA organises educational workshops and industry forums in major shipping centres, with the aim of promoting FFAs as an important tool for managing exposure to freight rates.


The Vancouver International Maritime Centre (VIMC) is pleased to welcome Tim Protheroe to consultants Greystoke Marine Management, head-quartered in Vancouver.

Based in Houston TX, Tim is a Master Mariner who came ashore with Lloyds Register in 1992 and worked in several senior positions before being appointed President, Lloyds Register America’s Inc. in 2014.


Duncan Dunn has been elected Chairman of the Baltic Exchange Advisory Council with effect from 2 January 2018. He replaces Lambros Varnavides who has held the position since November 2017. Duncan Dunn is a Senior Director at SSY Futures and has served as Baltic Exchange Vice Chairman since 2017.

The Baltic Exchange Advisory Council is the governing body which oversees the Baltic, including its Membership Committee and Charities Committee, in relation to the Baltic Exchange’s strategy for membership services, social responsibility, charities and relationship with its members, governments, regulatory bodies and the global shipping community.

Members of the Baltic Exchange nominate from among themselves eight representatives on the Baltic Exchange Advisory Council.


Clyde & Co has today announced the hire of 15 insurance and litigation partners from Sedgwick LLP, a California origin law firm.

From the Avo Archive

The website of this newsletter contains all the editorial material since the inception of the Maritime Advocate as a print based quarterly in 1997 under the founding aegis of John Guy, Chris Hewer and Manfred Arnold. Readers can go to the site and search the database on the home page in its entirety. If you are looking for an old case, an old controversy or you would just like to see how many times you and your firm have featured in our annals feel free to access the archive. It is like this e-zine, free to Readers and we always appreciate the support of advertisers and sponsors.

Looking for a seasonal reference, Christmas being nearly upon us, we ran across these meandering thoughts-while-exiting made in Issue 140 of 27th January 2004 by the esteemed then editor Chris Hewer:-

Only here for the beer

We are indebted to the BBC and to the TASS news agency for information that the Red Army is now moving into the maritime salvage business. Army divers were recently called in to rescue a truck loaded with ten tonnes of beer kegs which had crashed through the ice covering a frozen river in Siberia. All the beer was recovered, and will, says the shipper, be sold on “at a reduced price”. Not so the truck, which apparently poses no hazard to navigation, and has been left where it is. It is unclear whether this selective salvage reflects the priorities of the shipper, the owner, or the army.

Glass Half-Empty/Half-Full Quote of the Week

“It represents an advantage which has not been available for a few years, to shipowners and/or their risk managers who wish to receive a fair quotation without the usual strings attached, as the new club is truly independent without the usual restraints of the International Group’s non-competition pooling agreement” (Christoff Lueddeke, Chairman, South of England P&I Club)

Forward to the future

TIME passes quickly. A little while ago– before the Kennedys, before the Beatles, before Cassius Clay, before the Vietnam war, but not THAT long ago ? if you wanted to telephone India from the office where your editor worked as a clerk, you had to book the call the day before. Even more recently– before fax and before email — the page proofs of the magazine on which your editor worked were set in hot metal and thundered around the M25 motorway in the saddle bag of a motorcycle, twice each day, to be read on arrival by fallible eyes whose inevitable failings were invariably saved by the specialist skills of ageing but wise proof-readers whose art now, sadly, barely exists.

Today, as we look at the latest pictures of the Mars space missions, it seems that anything is possible — well, almost anything. One thing, however, will not change. Even when we are dancing polkas and introducing smoking bans in restaurants on the surface of Mars, the futures markets will still be the futures markets. And, at the risk of further upsetting the Forward Freight Agreement Brokers’ Association (FFABA) whose new chairman received an honorary mention in these electronic pages last week, the future is where they BELONG. In their present form, they will see out your editor very nicely, and oblige.

Martian oxident layer futures, anyone?

Divine direction

ANOTHER week, another slew of transparently bogus emails from denizens of third world countries looking for gullible patsies to defraud. In seeking your editor’s help to invest $21.5m (a favourite and frequently recurring amount, this), a woman supposedly recently widowed by President Mugabe’s troops, writes, “Forgive my indignation if this message comes to you as a surprise and may offend your personality for contacting you without your prior consent. I got your contact from the proffesional database found in the internet when I was searching for a reliable foreigner who will assist me. After series of prayers/ fasting, I was divinely directed to contact you among other names found in the database.”

However tempting the offer, your editor is of course not a foreigner.


Mr & Mrs R and the Christmas Card List

Shall I cross them off?
It’s twenty years since we last met.

Of course Mr R and I once thought
we were made for each other

Ah, that heart-stopping moment
by the kitchen sink, when he took off

his spectacles and fiercely kissed me.
But all that lasted less than a week

and what I recall more vividly
is Mrs R’s good advice:

“Always plunge your lemons in hot water
before you squeeze them.”

One more year perhaps.

(Connie Bensley)

Eternal truths

1. Once over the hill, you pick up speed.

2. Whatever hits the fan will not be evenly distributed.

3. Dogs have owners. Cats have staff.

4. If the shoe fits, buy it in every colour.

5. If you look like your passport photo, you probably need the trip.

6. Bills travel through the mail at twice the speed of cheques.

7. Some days are a total waste of make-up.

8. Men are from earth. Women are from earth. Deal with it.

9. A balanced diet is a biscuit in each hand.

10. Middle age is when broadness of the mind and narrowness of the waist change places.

11. Rubbish is something you’ve kept for years and throw away three weeks before you need it.

12. Learn from the mistakes of others. You can’t live long enough to make them all yourself.

Murphy’s Laws of Work

Everything can be filed under miscellaneous.’

Never delay the ending of a meeting or the beginning of a cocktail hour.

To err is human, to forgive is not company policy.

Important letters that contain no errors will develop errors in the mail.

If you are good, you will be assigned all the work. If you are really good, you will get out of it.

If it wasn’t for the last minute, nothing would get done.

At work, the authority of a person is inversely proportional to the number of pens that person is carrying.

When you don’t know what to do, walk fast and look worried.

No one gets sick on Wednesdays.

The longer the title, the less important the job.

Machines that have broken down will work perfectly when the repairman arrives.

Once a job is fouled up, anything done to improve it makes it worse.

Success is just a matter of luck, just ask any failure.

[Paul Dixon]


According to Paul Dixon, the following are all replies that British women have put on Child Support Agency forms in the section for listing father’s details. These are excerpts from the forms. Allegedly. But we found them laugh out loud funny..

01. Regarding the identity of the father of my twins, child A was fathered by Jim Munson. I am unsure as to the identity of the father of child B, but I believe that he was conceived on the same night.

02. I am unsure as to the identity of the father of my child as I was being sick out of a window when taken unexpectedly from behind. I can provide you with a list of names of men that I think were at the party if this helps.

03. I do not know the name of the father of my little girl. She was conceived at a party at 36 Cherry Avenue where I had unprotected sex with a man I met that night. I do remember that the sex was so good that I fainted. If you do manage to track down the father can you send me his phone number?

04. I don’t know the identity of the father of my daughter. He drives a BMW that now has a hole made by my stiletto in one of the door panels. Perhaps you can contact BMW service stations in this area and see if he’s had it replaced.

05. I have never had sex with a man. I am awaiting a letter from the Pope confirming that my son’s conception was immaculate and that he is Christ risen again.

06. I cannot tell you the name of child A’s dad as he informs me that to do so would blow his cover and that would have cataclysmic implications for the British economy. I am torn between doing right by you and right by the country. Please advise.

07. I do not know who the father of my child was as all squaddies look the same to me. I can confirm that he was a Royal Green Jacket.

08. Peter Smith is the father of child A. If you do catch up with him can you ask him what he did with my AC/DC CDs?

The Last of the Lighthouse Keepers