The Knock-for-Knock Principle under Danish Law - Sandroos ...

Other Case LawSmit vs. Mobius (2001, CLC 1545)• Facts compable to the Danish 2004 case, only tug owner caused damageon both the tow (a barge) and a third party dredging vessel• BIMCO TOWHIRE charter party containing a knock-for-knock clause• Plaintiffs, the barge owner, claimed that the tug (responsible for thedamage) was un-seaworthy (gross negligence) – knock-for-knockprovision must assume that the tug is – at least – seaworthy (captain wasdrunk).• Court held that• A commercial/businesslike approach must be taken• Knock-for-knock is a ”crude but workable allocation of risk and responsibility”• Allocation is clearly defined, even though it may seem unfair from time to time• Arguments of seaworthiness would ”significantly lessen the effectiveness of theknock-for-knock arrangement”• The provision anyway stated that the indemnity applies ”whether or not thesame is due to the breach of contract”01/12/2010 SANDROOS 24