South Africa

Validity of P&I Club Letters of Indemnity

The South African courts have delivered their first definitive judgment on the validity of P&I Club Letters of Indemnity as security for the release of vessels under arrest. In , the court concluded that there was no reason why, from a practical point of view, a Club Letter should not constitute adequate security within the ambit of the South African Admiralty Jurisdiction Regulation Act, since bank guarantees and Club Letters are cast in similar terms and both are private contractual undertakings given to secure a claim against an owner.