Commercial Disputes Weekly – Issue 1497 February 2023

Nuisance
The Supreme Court held, by a majority, that the Tate Modern gallery was liable in the tort of nuisance for constructing a viewing platform on its top floor from which visitors can see directly into a neighbouring block of flats. The platform satisfied the test of causing substantial interference with the ordinary use and enjoyment of neighbouring land in a way that was not a common and ordinary use of Tate Modern’s land. In deciding whether the residents’ rights had been infringed, it was irrelevant that the use of the land by Tate Modern was beneficial to the public, although it could affect the remedy to be granted (for example, damages rather than an injunction). The matter was remitted to the High Court to decide on the appropriate remedy.
Fearn and others v Board of Trustees of the Tate Gallery [2023] UKSC 4, 1 February 2023

Finance leases – Sanctions
The lessee/bareboat charterer of two vessels stopped paying hire to the owner lessors after the lessors became subject to EU sanctions against Russia. The lessors purported to terminate the finance leases. The lessee claimed that it had validly exercised options to purchase the ships and was entitled to ownership if it paid the termination sum. The court held that the termination clause gave rise to an implied obligation on the lessors to demand the termination sum within a reasonable time after termination; the lessors had no discretion as to whether to make the demand if they terminated the leases. The fact that the termination sum would be frozen in the nominated account because of the sanctions, did not affect the lessee’s right to take ownership. By paying into the frozen account, the lessee would have done all required by the charterparty. The court ordered specific performance.
Gravelor Shipping Ltd v GTLK Asia M5 Ltd [2023] EWHC 131 (Comm), 27 January 2023

Arbitration – Bias
Claimant cocoa traders failed in their application to set aside an award of the Board of Appeal of the Federation of Cocoa Commerce (“FCC”) on the basis of serious irregularity under section 68 of the Arbitration Act 1996. The Commercial Court rejected their arguments that the chairman of the FCC Board had not disclosed various matters relating to professional contact with the defendant and other FCC members, and that this gave rise to an appearance of bias. The chairman had no obligation to disclose these matters. Context was key and as the dispute arose in a small commodities market, the traders and the FCC arbitrators were likely to know or be known to each other. A fair minded and informed observer would not consider there to have been a real possibility of bias.
Africa Sourcing Cameroun Limited and another v Société par Actions Simplifiée (Rockwinds) and another [2023] EWHC 150 (Comm), 27 January 2023

Insurance – Jurisdiction
The Court of Appeal has confirmed the correct interpretation of a commonly used clause in a property all risks and other policies. The ‘Applicable Law and Jurisdiction’ clause provided that “In accordance with the jurisdiction, local laws and practices of the country in which the policy is issued. [2] Otherwise England and Wales UK Jurisdiction shall be applied…” The applicable jurisdiction was the courts of the country in which the policy was issued. The courts of England and Wales were available as a fallback where the local court did not have or would not accept jurisdiction. It did not present the party commencing proceedings with a free choice to commence in the local court or the courts of England and Wales. The decision was a 2:1 majority but all the judges agreed that the clause was not well drafted.
Al Mana Lifestyle Trading LLC and others v United Fidelity Insurance Company PSC and others [2023] EWCA Civ 61, 31 January 2023

Should you wish to discuss any of these cases in further detail, please speak with a member of our London dispute resolution team below, or your regular contact at Watson Farley & Williams: