The Enforcement of Promise not to Sue Clauses by Third Parties

The promise not to sue clause has been well-established enforceable by the carrier. However, the carrier’s enforcement is bedeviled in the absence of his obligation to indemnify the third party in the sub-contract between them. This inevitably cripples the efficacy of the clause, which could be resolved if a third party could directly enforce it. After the implementation of the Contracts (Rights of Third Parties) Act 1999 and given the changes regarding the promise not to sue clause recently made by the IGP&I and BIMCO Revised Himalaya Clause, it is time to consider the enforceability of the promise not to sue clause by the third parties from the perspective of both the Act and the Himalaya clause approach. This article serves as the first literature considering this issue and originally submits that the third parties could enforce the clause pursuant to both of the two approaches.