By Elliot Bishop, James Watthey

The analysis of Jervis Kay QC, the Admiralty Registrar was important in light of two sadly very common characteristics in recent ship mortgage claims. Firstly, how can a bank comply with its duty to exercise reasonable care to obtain a proper price for the distressed asset when there is a singular lack of willing buyers; and, secondly, how can the bank (and if it comes to it the court) work out the true market value where a slow market means there are no real comparators?

Reassuringly, the answer is that the court approached this with a healthy dose of commercial common sense: banks will not be expected to work miracles by conjuring up a weak market and it can be seen that this theme runs throughout the judgment.