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Assuranceforeningen Gard Gjensidig v The International Oil Pollution Fund [2014] EWHC 3369 (Comm)

The Commercial Court has held that the International Oil Pollution Fund (an international organisation with its headquarters in London) is immune from suit on a claim by Gard (a P&I Club).

Gard’s claim arose out of oil pollution damage claims resulting from the grounding, in 1997, of the vessel Nissos Amorgos in the Maracaibo Channel, Venezuela. The claim was founded on an alleged contract between Gard and the Fund pursuant to which Gard agreed to make interim compensation payments up to the limit of its liability under the 1969 Civil Liability Convention in consideration for the Fund agreeing to fund further payments needed thereafter, up to the limit of its liability under the 1971 Fund Convention.

Hamblen J found that there was a “mutual expectation” that that above consecutive payment arrangement would be followed in this case and that such expectation had not been met. However, he held that there was no legally binding contract and that the Fund was entitled to rely on its strict legal rights if it chose to do so.

If there had been a legally binding contract the judge went on to find that the Fund was in any event immune from suit under the terms of a Headquarters Agreement with the UK Government, the terms of which are incorporated into English law by an Order in Council made under the International Organisations Act 1968. Pursuant to that Order, the Fund is immune from suit and legal process except in respect of, amongst other exceptions, “any loan or other transaction for the provision of finance”. The judge held that the alleged contract did not fall within that exception and that the Fund was therefore immune from suit.

Christopher Hancock QC and Malcolm Jarvis represented Gard (instructed by Ince & Co LLP).