1. The operator can limit… but who is the operator?
2. Notice requirements to prevent time bar
3. ITIC issues timely warning to port agents
4. Salvage operation to retrieve containers lost off MSC Palak
5. AMSA inspection campaign to focus on stowage and securing of containers
6. Electronic Bills of Lading – an update from the UK Club
7. Charterer pursues owner over IMO fuel switch losses
8. Misleading impression as to identity of carrier justifies time extension
9. Wakashio grounding: Smit arrive with oil spill response equipment
10. Mediation styles and their relative merits
Notices & Miscellany
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1. The operator can limit… but who is the operator? This report from the Campbell Johnston Clark team.
Mr Justice Teare decides who falls within the definition of an ‘operator’ entitled to limit liability under the 1976 Limitation of Liability for Maritime Claims Convention.
““The operator of the ship”…embraces not only the manager of the ship but also the entity which, with the permission of the owner, directs its employees to board the ship and operate her in the ordinary course of the ship’s business.”
In a judgment handed down on 22 May, Mr Justice Teare, sitting in the Admiralty Court, explores the characteristics required of an entity to fall within the definition of “operator” under the 1976 version of the Convention on Limitation of Liability for Maritime Claims (LLMC).
In November 2016, the Stema Barge II (SBII) drifted in heavy weather. French telecommunications company, RTE, alleges that the SBII’s anchor tripped one of its undersea cables. The Saga Sky was also drifting in the area and a collision occurred between her and the SBII. RTE allege that another of its undersea cables also registered a tripping. The damage to the two cables allegedly resulted in significant direct and consequential losses to RTE, with substantive claims for such losses being pursued outside the UK.
The LLMC provides that certain ‘persons’ are entitled to cap their liability in accordance with a specific formula, based on gross tonnage, irrespective of the actual loss suffered by the claimant. The general purpose as set out in earlier authorities, in particular the CMA Djakarta  is to “encourage the provision of international trade by way of sea-carriage”.
The SBII interests sought to limit liability for any claims advanced against them, under the LLMC. Questions that arose but that fell away, included whether an unmanned barge constituted a “ship” and therefore could limit its liability under the LLMC, the applicable rules governing the calculation of limitation at the time of the incident, namely the 1996 Protocol to the LLMC Convention (the 2012 Protocol having come into force in the UK on 30 November 2016, two weeks after the incident) and whether there was one or two relevant incidents for the purposes of limiting liability.
2. Notice requirements to prevent the time bar under the Inter Club Agreement. Reed Smith’s Jeb Clulow and Emily Balment express some concerns.
Recently, Lloyd’s Maritime Law Newsletter reported on a recent arbitration award in which Reed Smith acted, regarding the requirements for notice under the 1996 Inter-Club Agreement (ICA), as amended in 2011.
The decision concerned a notice that, on the face of it, bore no resemblance to a usual ICA notice as it: a) was given by Charterers prior to the cargo being discharged and hence cargo interests becoming aware of the damage, let alone asserting a cargo claim; b) did not say it was an ICA notice; c) primarily concerned Owners and Charterers arranging a joint survey at discharge; and d) did not contain certain mandatory information prescribed by the ICA.
The notice read as follows:
“As you know there has been an accident on [the vessel] where the crew have pumped the seawater into the cargo hold instead of pumping it out. Therefore we hold the Owners fully liable for all claims and costs arising from the crew’s negligence. We will arrange for a surveyor to attend at the discharge port to protect [the charterer’s] interests thus please let us know if you want to arrange for a joint survey. Please acknowledge receipt of this notification.”…
…The Tribunal held that there were two separate obligations: the first obligation is to provide a written notification of the cargo claim within 24 months of the relevant date, and the second requires such notice to include details of the contract of carriage and claim amount, if available.
Reed Smith’s report goes on to explain why the Award, if followed, may introduce considerable uncertainty for P&I claims handlers.
3. ITIC issues timely warning to port agents.
International Transport Intermediaries Club (ITIC) warns port agents to inform their regular principals of port fee and tariff increases, even if the details are in the public domain. This will avoid disputes as well as delayed reimbursement payments.
A recent case involved a port agent who was owed US$190,000 by their regular principal (the charterer and consignee of a cargo of timber) for storage costs and demurrage charges. The agent had been invoiced for these charges by the port and had then passed them on to their principal for reimbursement. After a lengthy period of silence from the principal, ITIC appointed lawyers to strengthen the demand for payment. The principal advised that the agent had previously sent them the port tariff on which they had relied. However, unknown to them the port had subsequently increased its fees and this was why they were refusing to pay.
The agent responded by saying that they had sent that tariff in relation to an earlier shipment. Although they had not sent a message updating the tariff, the fees are set by the port and they are available on the port’s website. Furthermore, there was no other place the cargo could have been stored and the principal was the end user of the cargo and could not pass the storage costs on to any other party. Despite the principal’s criticism of the agent for not keeping them advised of the changes, the agent’s inaction was not causative of any loss. Therefore, it was demanded that the ports costs should be paid in full by the principal.
After a court ordered conference, the principal offered to pay US$60,000. This was rejected and, following a mediation process, the matter was finally settled for US$160,000.
Legal fees of US$11,800 as well as the balance of the port charges were covered by ITIC. In order to avoid disputes, port agents who routinely provide regular principals with port fees and tariffs should make sure they advise them of any changes to those fees and tariffs.
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4. A salvage operation to retrieve containers lost off MSC Palak is underway reports Nicci Botha.
The South African Maritime Safety Authority (SAMSA) and other stakeholders based in the port of Ngqura are co-ordinating a salvage operation to retrieve containers lost overboard from the MSC Palak during a storm in Algoa Bay, South Africa, on 14 July.
The salvage operation also involves the vessel’s insurer, the Department of Environment, Forestry and Fisheries (DEFF), Transnet National Ports Authority (TNPA), the vessel owners, and local clean-up service providers.
“Aerial surveillance has been carried out to spot the drifting debris along the coast and salvage crew using boats have towed the spotted debris to a safe place such that it poses minimal risk to ships navigating along the coast and to avoid environmental damage,” SAMSA said.
5. AMSA inspection campaign to focus on stowage and securing of containers, Gard reports.
In response to several incidents of containers being lost into the sea, the Australian Maritime Safety Authority (AMSA) has initiated a focused inspection campaign on container stowage and securing arrangements, both fixed and portable, that will run from 1 August 2020 to 31 October 2020.
Containers lost at sea present a serious safety and an environmental hazard. The World Shipping Council estimates that over the last 12 years (2008-2019), 1,382 containers have been lost at sea on average each year due to both catastrophic and non-catastrophic incidents. A series of such incidents off the Australian coast in recent years has prompted AMSA to launch its focused inspection campaign (FIC) “to demonstrate that inadequate cargo securing arrangements and the loss of cargo in Australian waters is not acceptable”. The purpose of this FIC is two-fold:
Draw shipowners’ and operators’ attention to their obligations under reg. 2 and 5, Chapter VI of SOLAS; and
specifically focus on the use of cargo information as well as stowage and securing of containers.
The FIC is specific to Australia and will only target foreign vessels in Australian waters that have, or are required to have, cargo securing arrangements approved under regulation 5 of Chapter VI of SOLAS. Inspections can take place either in conjunction with normal port state control (PSC) inspections, or as a standalone inspection where a vessel is not eligible for PSC inspection. Where a deficiency is found, the inspector will discuss it with the Master with a view to ensuring that the non-compliance is corrected.
AMSA has provided a checklist which inspectors will follow when conducting the inspections.
6. Electronic Bills of Lading – An update from the UK P&I.
In this two part article, we examine how the industry has progressed in its take up of eBLs. We will also be looking again at cyber risks and considering if they remain a valid deterrent to the adoption of eBLs. We will additionally be asking whether the paper BL is still fit for purpose in the digital and information age that we now live in, and how the current Covid-19 epidemic strengthens the case for using eBLs.
In Part II, we take a look at the recent products and initiatives of Bolero and essDOCS, two of the first generation eBL providers. We also take a look at cyber risks again and at whether the paper BL, as a tool, is still fit for purpose in today’s international trade.
7. Charterer pursues owner over IMO fuel switch losses. This report courtesy of Matt Coyne for TradeWinds.
A Singaporean charterer has seized a bulker in Houston over allegations its owner’s lack of upkeep forced it to miss out on cheap bunker prices ahead of the IMO 2020 fuel switch.
Singapore based, Dava filed a suit in the US federal court of the Eastern District of Texas, arguing registered owner Domes Shipholding Corp failed to maintain the 33,422-dwt bulker Nodus (built 2010) ahead of a 21 December voyage from a Russian Black Sea port to Brazil.
But the ship was delayed twice — once for a port state detention stemming from 15 deficiencies and then for evaluation by the Korean Registry after engine trouble in the Bosphorus. As such, the Nodus was unable to sail until after the New Year and the IMO 2020 emissions regulations kicked in.
“The vessel instead had to burn low-sulphur marine gasoil … at a cost to Dava of more than double the price of [the high-sulphur fuel oil],” the complaint read.
Dava said it also had an agreement to buy high-sulphur fuel in Malta at $607 per tonne, but the delays made delivery impossible. Instead, it paid $658 per tonne. It said it lost $136,397 having missed both opportunities.
It seized the Nodus as security for its ongoing arbitration against Domes in London. Domes shares the same address as Seadar Shipmanagement, the ship’s manager. Dava seeks an additional $38,602, bringing its total claim to about $175,000.
According to AIS data, the Nodus is moored in Houston after a voyage from Iskenderun, Turkey.
8. From Ince & Co’s Insights: Misleading impression as to identity of carrier justifies time extension for misdelivery claim.
National Bank of Fujairah (Dubai Branch) v. Times Trading Corp (Archagelos Gabriel)  EWHC 1983 (Comm).
The Court has granted a time extension for commencing arbitration proceedings in a misdelivery claim in circumstances in which the correspondence between the Claimant and the ship interests’ lawyers resulted in a misleading impression as to the true identity of the carrier under the bills of lading. The Court concluded that, as a result, it would be unjust to hold the Claimant to the one-year time limit for bringing the claim.
National Bank of Fujairah (“NBF”) was the holder of 27 bills of lading (“the Bills”) issued in respect of a cargo of steam coal loaded onto the MV Archagelos Gabriel (“the Vessel”) in May 2018. In June 2018, the cargo was discharged against letters of indemnity without production of the Bills. NBF subsequently alleged that the cargo had been misdelivered. The Bills contained a general paramount clause and incorporated an English law and London arbitration provision. There was, therefore, a one-year time limit for commencing arbitration against the carrier under the Bills.
The Vessel’s registered owner was Rosalind Maritime LLC (“Rosalind”). However, the Vessel was bareboat chartered to Times Trading Corp (“Times”) at the material time. Times Management Inc was the Vessel’s ISM Manager. There was also a chain of time and voyage charters, with Trafigura Pte Ltd (“Trafigura”) at the bottom of the chain.
9. Wakashio grounding: Smit Salvage arrive with oil spill response equipment, report Roose & Partners.
In the evening of 25 July 2020 the bulk carrier Wakashio ran aground on a coral reef off the south east coast of Mauritius near Mahébourg. The 2007 built vessel was on a ballast voyage from Lianyungang in China to Tubarão in Brazil when she ran aground in a position three miles south of Pointe d’Esny. The vessel’s course had been monitored by the Mauritian coastguard prior to the grounding and efforts had been made to contact the crew to warn them of their dangerous course but without reply. An hour later the vessel grounded in the Blue Bay lagoon some 900 metres from the shore. The vessel’s Master then notified the authorities of the accident. There are 20 crew on board. Reports suggest the vessel has some 3,894 m/t of low sulphur fuel oil, 207 m/t of diesel and 90 m/t of lubricant oil on-board.
The following day local authorities dispatched a helicopter to carry out an aerial surveillance of the vessel. These inspections have continued and on 27 July some oil was reported in the waters surrounding the bulk carrier. It appears the engine room has been flooded as a result of a ruptured hose but the hull is reported to remain intact. Containment booms have been placed in the lagoon by the authorities who are concerned about any impact on the Blue Bay Marine Park. Aerial monitoring continues. Testing for the presence of oil, grease and hydrocarbons has to date been negative but daily testing continues.
Smit Salvage has been appointed to refloat the Wakashio under the terms of an LOF salvage contract with SCOPIC invoked. Tugs have been deployed from South Africa and Singapore and are expected to arrive on site shortly together with oil spill response equipment. The sea conditions are challenging at the site with surf and the weather is forecast to deteriorate.
10. Jonathan Lux of Lux Mediation sets out the different styles of mediation and their relative merits.
There are a number of different mediation processes that an experienced mediator can use to resolve a dispute. In most commercial disputes, either facilitative or evaluative mediation is used, with a less common third option of transformative mediation. We look at the differences.
In facilitative mediation, the mediator helps the parties to reach their own agreed solution by asking questions to determine each side’s points of view and ideas. The emphasis is on the parties themselves taking control of the outcome, rather than their lawyers or the mediator.
The sessions will be structured by the mediator, and will involve the gathering of information, focus on the common ground between the parties, creation of workable options, discussion of the options and putting together an acceptable final agreement.
The aim of facilitative mediation is to help everyone agree on a workable, long-term solution. The mediator does not offer any opinion or advice, but steers the process, helping both sides find and analyse the available options.
The mediator does not opine on the likely outcome, should the matter go to court but guides the parties to create their own acceptable result. This sort of mediation requires substantial skill on the part of the mediator in enabling the sides to come to a conclusion, however when properly done it can be very successful, giving the parties a sense that the outcome is of their own making, which in turn creates a greater likelihood of long-term satisfaction.
The article goes on to describe evaluative mediation and transformative mediation, and sets out advice on choice of mediator.
Effective 1st August 2020, SKC Surveyors & Adjusters have been appointed as the new Lloyd’s Agent in Jordan covering Palestine too. Contact at Lloyd’s is Agency Department Quentin Byerley +44 (0) 20 7327 5610 or firstname.lastname@example.org
The 2020 Xinhua-Baltic International Shipping Centre Development Index report on international shipping centres has just been published. London is rated as the leading centre for shipping business services. Singapore is rated as the leading shipping centre overall. Two points of particular significance are that according to the report “London is by far the leading international arbitration centre” and “the number of global maritime arbitrators is double all other sample cities combined”. The full text is at https://bit.ly/3fnEnVO
Portugal Shipping Week, taking place from 21-25 September in Lisbon, will not only be one of the first major maritime events taking place in situ as the world gradually emerges from Coronavirus lockdown, but it will also include the world’s first carbon neutral shipping conference thanks to a partnership between PSW organiser Petrospot and carbon trading and offsetting specialist AitherCO₂.
The ‘greening’ of shipping and ports, the marine energy transition and the development of sustainable ‘blue’ economies set against a backdrop of recovering global markets, are becoming the focus of many governments and industry the world over. And for the Portuguese Government, the focus on the environment, from cleaner fuels to cleaner seas, is particularly sharp and so will give Portugal Shipping Week an extra sense of purpose and urgency. https://www.petrospot.com/events/psw-2020
Tony Goldsmith announced as new Head of Marine at Hill Dickinson.
Tony Goldsmith, partner, master mariner and marine casualty specialist, has been appointed as Head of Marine and Trade at Hill Dickinson. He will succeed the firm’s current Head of Marine, David Wareing, who is due to retire in the autumn. Mr Goldsmith, a former seagoing master mariner (class 1), joined Hill Dickinson in 1993 and became founder and managing partner of the firm’s Singapore office when it opened in 2009. He will return to the UK later this year to take up his new post.
Andrew Lee will head Hill Dickinson’s Singapore office. Andrew has been with Hill Dickinson and its merger firm, Hill Taylor Dickinson, since the start of his legal career in 2001. He worked for the company in London and Dubai before relocating to Singapore in 2009 as a co-founder of the firm’s new office, becoming a partner in 2010.
American Club names McCafferty as SVP & Director of Claims for Americas.
American Club’s managers, SCB has named Mary (Molly) McCafferty as Senior Vice President and Director of Claims for the Americas, effective the beginning of September. McCafferty’s experience includes the practice of law, P&I Club correspondency and senior executive positions with international shipping companies, most recently as general counsel to Guardian Navigation, a leading operator in the bulk trades. McCafferty is admitted to the Bars of Connecticut and Florida and is a member of the Society of Maritime Arbitrators.
New York maritime law community mourns death of George Freehill.
George Freehill has died at age 85 at his home in Jupiter, Florida. Freehill founded the maritime law firm Freehill, Hogan & Mahar. The firm continues to practise in maritime and other areas from offices in New York, Connecticut and New Jersey. He was an avid golfer credited with eight holes-in-one over the years.
Jonathan Sam Ignarski’s daughter, Marina, is a fashion and textile designer and has produced a fashion film in aid of the mental health charity Mind. All of the fashions were created in the recent lockdown. It’s well worth a watch. Here’s the link: https://youtu.be/FT0B0N4Ao4U
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The only function of economic forecasting is to make astrology look respectable.
John Kenneth Galbraith (1908 – 2006)
C, E-flat, and G walk into a bar asking for a drink. Sorry, says the barman, we don’t serve minors.
With the Edinburgh Festival cancelled this year, we looked back at some of the winning Fringe jokes from previous years. Most just don’t belong here for one reason or another but here are a few. Hopefully the Festival – Fringe, jokes and all, will be back next year:
“I saw a documentary on how ships are kept together. Riveting!” Stewart Francis (Ed: Weld-un…)
“I can give you the cause of anaphylactic shock in a nutshell.” Gary Delaney
“I was playing chess with my friend and he said, ‘Let’s make this interesting’. So we stopped playing chess.” Matt Kirshen
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