The Aliakmon Revisited

04/03/10

Shell UK Ltd & Ors v Total UK Ltd & Anor [2010] EWCA Civ 180 (04 March 2010)

The Court of Appeal has held in the latest stage of the litigation arising out of the explosion at the Buncefield oil terminal that an equitable co-owner of property can sue for economic loss consequential upon physical damage to that property.

It had been held by David Steel J at first instance that the rule in The Aliakmon meant that only a claimant with a legal or possessory title could sue for such losses. The Court of Appeal overruled Steel J, holding that a duty in tort was also owed to the equitable owner, who could sue for its own losses in its own name provided that the legal owner was joined to the proceedings. The Court of Appeal held that the requirement to join the legal owner was a procedural protection against double-recovery, and did not reflect any rule that the only recoverable losses were those suffered by the legal owner.

A separate part of the appeal concerned a claim by Total (which had been held vicariously liable for the damage resulting from the explosion) for a partial indemnity from Chevron, Total's joint venture partner in the Buncefield terminal. The Court of Appeal differed from Steel J in its analysis of the applicable contracts, and the relevance of the rule in Canada Steamship, but concurred in the result, namely that none of the contractual provisions on which Total relied provided it with an indemnity in respect of its negligent operation of the Terminal.

The judgment is here.