Web Alert: Knock-for-knock recent development in Norway

In our November 2014 Offshore Special Edition Bulletin we reported on the Norwegian Court of Appeal case Njord B decision ​where they refused to uphold the indemnity provision in the knock-for-knock where the party seeking to rely on such provision had been 'grossly negligent'.

With reference to the Holam Fenwick Willan LLP Offshore February 2016 bulletin the Norwegian Courts have again recently been asked to consider the Njord B decision in the Princess Management Ltd v Zedare Shiptrading and Lampros Chuntas where a Claimant argued that the knock-for-knock clause did not apply because the defendant had acted with gross negligence by neglecting to follow instructions which resulted in the tow being lost.

The Court in this case found that there was no ground for enforcement and while there was a possibility of tortious liability and/or contractual liability, no liability arose because the towage contract was subject to English law. The Court rejected the request for arrest.

This decision affirms that the courts of Norway will up hold the knock-for-knock regime in matters which are not governed by Norwegian law or do not occur in Norwegian waters or involve Norwegian parties.  

However, the position remains that the courts of Norway do appear prepared to set aside clauses that regulate liability on the basis of gross negligence should there be some connection with Norway or the underlying contract be governed by Norwegian law.

Category: Offshore & Renewables