The English High Court has provided important guidance on the recovery of marine insurance expenses arising from vessel detention in a conflict zone.
In Ithaca Prospect LLC & Anor v Lloyd’s Insurance Company SA & Ors [2026] EWHC 2700 (Comm), the Court considered whether shipowners could recover costs incurred to maintain a vessel detained in Ukraine following Russia’s invasion, as well as whether insurers had accepted abandonment of the vessel.
Background and Decision
The dispute concerned the Ithaca Prospect, a bulk carrier detained at Mykolaiv, Ukraine. While seeking an opportunity to leave, the owners maintained the vessel in an operational condition, arranged replacement crew, consumed bunkers and obtained replacement war risks insurance.
The Court allowed recovery of certain expenses under the policy’s sue and labour provisions, including:
- US$550,134.52 in crew-related expenses.
- US$192,000 for bunkers consumed.
- Certain legal fees incurred in efforts to facilitate the vessel’s departure, with the recoverable amount to be determined.
However, the claim for port fees was dismissed because the payment was made after the vessel had become a constructive total loss, to facilitate its sale. Certain legal expenses relating to separate cargo proceedings were also excluded.
The Court further rejected the claim for approximately US$2.28 million in replacement insurance premiums. The insurers’ settlement and sale arrangements did not amount to acceptance of abandonment, which requires conduct consistent only with such acceptance.
Key Implications for Marine Insurers
The judgment highlights several practical considerations for marine insurance claims:
- Document expenditure carefully: Evidence should establish how costs were intended to avert or minimise an insured loss.
- Consider timing and purpose: Expenses incurred after a constructive total loss has crystallised may not qualify as sue and labour expenses.
- Assess costs individually: Crew, fuel, legal and port expenses may receive different treatment depending on their purpose and circumstances.
- Clarify abandonment arrangements: Settlement agreements should clearly address the parties’ respective rights and obligations concerning a vessel’s sale and abandonment.
How Vassallo Associates Can Assist
Vassallo Associates provides integrated legal and technical support for marine insurers, P&I Clubs, underwriters and shipowners. Our team assists with marine insurance disputes, war risks claims, vessel detention and complex maritime investigations.
For assistance with marine insurance claims or shipping disputes, please contact our team.
This article is for general information purposes only and does not constitute legal advice.