Landmark decision for the shipping industry in Court of Appeal


On 6th March 2014, the Court of Appeal in England and Wales ruled that the use of a P&I Club Letter of Undertaking ("LOU") was acceptable under relevant United Kingdom legislation.

The decision is of considerable importance to the shipping industry, P&I Clubs and other insurers who provide insurance and reinsurance in respect of maritime claims. The issue in question was whether it was in principle possible to constitute a limitation fund under the International Convention on Limitation of Liability for Maritime Claims 1976 (implemented in the UK by the Merchant Shipping Act 1995), by means of a guarantee in the form of a letter of undertaking provided by a P&I Club.

The decision will have a huge impact, not only for the shipping industry in the UK, but also all over the world.

The full text of the judgement is available to download at the top of this page.

A number of law firms have issued advisories and newsletters on this topic and links to these can be found below:

Jackson Parton -

Case Summary: The "Atlantik Confidence" 6 March 2014

Hill Dickinson -

The Atlantic Confidence

Clyde & Co -


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