Ailsa Craig Fishing v Malvern Fishing [1983] 1 WLR 964 House of Lords

A contract between existed between Securicor and Aberdeen Fishing Vessel Owners Association whereby Securicor were to provide security cover in the harbour where the claimant’s vessels were moored. As a result of negligence and breach of contract the claimant’s vessels sunk. The contract contained a clause which provided that in the event of negligence or breach, Securicor would not be liable for any amount exceeding £1,000 in any one claim and that it would not be liable for more than £10,000 in any twelve month period.

The House of Lords held that where the clause limits liability rather than excludes liability altogether the courts should apply the natural meaning of the clause and not be too eager to find ambiguity.
Lord Wilberforce stated:

“One must not strive to create ambiguities by strained construction, as I think the appellants have striven to do. The relevant words must be given, if possible, their natural, plain meaning. The relevant words must be given, if possible, their natural, plain meaning. Clauses of limitation are not regarded by the courts with the same hostility as clauses of exclusion.”

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