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22 August 2018
The Sixth Civil Chamber of the Rio de Janeiro State Court of Appeals recently decided that a protection and indemnity (P&I) club was not liable for an associate shipowner's debts. In its decision, the court distinguished the P&I club from insurers operating in the Brazilian insurance market.
In the original proceedings, the Ceara State Court of Appeals confirmed the first-instance decision which granted the Brazilian insurer's claim and required the foreign shipowner to reimburse the insurer for the indemnification paid to its insured for the damaged cargo. However, the shipowner failed to pay the credit owed as, according to the insurer and its lawyers, the foreign shipowner had ceased his activities.
Thus, the Brazilian insurer's attorney filed a lawsuit before the Rio de Janeiro State Court against the foreign shipowner's P&I club, claiming a declaration that the P&I club was a joint or secondary debtor of the shipowner with respect to payment for the aforementioned cargo damage and attorney fees.
The first-instance judge rejected the claim. This decision was confirmed in the second instance by the Sixth Civil Chamber of the Rio de Janeiro State Court of Appeals.
The second-instance decision is significant, as it considers the merits of the existence of joint or secondary liability between P&I clubs and associated shipowners. In short, the court made the following observations:
The Rio de Janeiro State Court of Appeals' decision is paramount for the Brazilian shipping industry because it creates an important court precedent regarding P&I clubs' liability for the damages caused to third parties by their associates (let alone imposing joint and severally liability on them) and confirms the already existing foreign precedents on this issue.
For further information on this topic please contact Godofredo Mendes Vianna at Kincaid | Mendes Vianna Advogados by telephone (+55 21 2276 6200) or email (firstname.lastname@example.org). The Kincaid | Mendes Vianna Advogados website can be accessed at www.kincaid.com.br.
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