By Christopher Crosby

Law360, London (January 26, 2021, 3:17 PM GMT ) A port authority that docked cruise ships during the pandemic stands to collect more than £1.5 million ($2 million) in fees from the sale of two luxury liners after a London judge said Tuesday that it was not unfair to increase charges when the ship operator went bankrupt.

High Court Judge Richard Davison gave the Port of Tilbury, outside London, the all-clear to seek more several months' worth of unpaid docking fees from the $16 million sale of two cruise ships in October.

The ships had been docked on the Thames in Tilbury since May, unable to sail due to the lockdown restrictions. Amid the pandemic their operator, Cruise & Maritime Voyages Group, fell into administration and the vessels were bought at auction by British cruise line P&O Cruises.

The port raised prices for docking the ships from a preferential £3,000 a week to its standard rate of more than £188,000 12 hours after CMV Group announced its financial woes in mid-July. While the sum is "very high," the judge ruled that the port's trading regulations allowed it.

"The wording of [the regulation] was clearly intended to give the port complete freedom to increase the charges as it saw fit, on reasonable notice," the judge wrote.

However, the judge said the higher rate would only apply from mid-August, because the port hadn't given enough notice of the price change.

Creditors jostling for their cut of the sale had argued that the port's email raising rates wasn't binding. Instead of collecting millions in charges, they said, the authority had to honor its initial, low rate, and accept just £78,000 for docking the ships.

The ships and hundreds of crew members were stranded in Tilbury for months after cruises to Iceland and other destinations were canceled as the COVID-19 pandemic worsened. Maritime officials detained the vessels in June over their failure to pay wages.

CMV arranged to have the Columbus, the Vasco da Gama and three other vessels berthed at the docks in May, securing a preferential rate due to their longstanding business relationship.

But the port's management emailed the group on July 20, just hours after its administration was reported in the press, saying it was varying the rate to its standard tariff — a thirtyfold increase — unless its bills from May onward were paid.

Lawyers had argued that the port essentially did the cruise line a favor and it could have made more money by using the docking space offloading other ships. The port reserved the right to raise the rate with "reasonable" notice as the cruise manager's insolvency was a breach of contract, they argued.

Yet lawyers representing the cruise manager's other creditors complained that the 12 hours' notice wasn't fair, and that only a "reasonable" price hike was allowed under the port's own regulations.

The judge noted that the ruling put the port in a "privileged position at the expense of other creditors" that was "disproportionate to the services provided, the size of the available funds from the sales of the vessels and the other claims against those funds."

However, the claim was "assessed in accordance with the port's legal rights," he said. "I have found those rights to be clear."

Counsel for the parties did not immediately return requests for comment on Tuesday.

The port is represented by James M. Turner QC of Quadrant Chambers, instructed by Pinsent Masons LLP.

The other creditors are represented by Philippa Hopkins QC of Essex Court Chambers, instructed by Salvus Law Ltd.

The case is In the matter of the claim for Port Dues by Port of Tilbury London Ltd., case numbers AD-2020-000121 and AD-2020-000122, in the High Court of Justice of England and Wales.

--Editing by Brian Baresch.

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