1. Wakashio grounding: “almost all” fuel oil removed
2. Beirut: the dangerous goods debate
3. Where else is ammonium nitrate being stored?
4. “The lawless world of international shipping”
5. Storage of liquid cargoes
6. Limits on receivers’ obligations considered
7. London handles over 80% of global maritime arbitrations
8. Casualty response and sustainable solutions amidst a pandemic
9. Insurers pinpoint complex causation of container casualties
10. Court discharges freezing order in misdelivery claim
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1. Wakashio grounding: “almost all” fuel oil removed.
At time of writing it seems that almost all the fuel oil from the Japanese-owned ship, that has caused a huge oil spill off the coast of Mauritius, has been pumped out, Prime Minister Pravind Jugnauth has said. The operation had been a race against time, he added, amid fears that the MV Wakashio would break up.
We commend readers to two in depth reports: first from gCaptain:
And next from Roose & Partners:
Meanwhile the Beirut explosion has shone the spotlight onto the carriage and storage of dangerous goods. Here are links to a number of stories pertinent to the tragedy.
2. Dangerous goods debate – “Count us in!” says TT Club in call to action.
TT Club joins the global community in expressing deep sympathy for the people of Beirut following the recent devastating explosion there. While detailed investigations into causation and responsibility are ongoing, it is widely understood that the incident arose from storage of dangerous goods. As such, it is the latest and most stark reminder for those carrying, handling and storing such goods to act in compliance with regulations and with due diligence.
Apart from the recent devastating explosion in Beirut, there has been a spate of ro-ro/car carrier fires in recent months, leading to fresh calls for improvements, scrutiny and control in relation to dangerous goods (DG). Container ship fires are always in mind.
While 2020 – for all the difficulties faced around the world – has not experienced the container ship fires that marred 2019, there is every reason to continue investigating ways to improve certainty in the transport of DG shipments. There have in recent weeks been two helpful think pieces, the first a survey into the causes of cargo being non-declared or mis-declared and the second a white paper calling for a ‘comprehensive, holistic and coordinated industry approach’ to resolve the issues identified. TT Club applauds both these initiatives.
It is little surprise that this matter piques TT’s interest, since it is central to the ‘cargo integrity’/#Fit4Freight initiative, which has been profiled previously. The authors of the white paper, National Cargo Bureau (NCB) have drawn extensively on their own container inspections carried out over the years and reach conclusions about the risks presented by cargo packing deficiencies that resonate with the Club’s own findings and statements. For those interested in the statistics and detail, the white paper is a good (but sobering) read. Perhaps the most telling statement in its call to action is that the maritime supply chain ‘system [is] ripe for the type of disasters the industry has experienced over the last several years’.
[Ed: See also 9 below]
3. Where else is ammonium nitrate being stored, asks the BBC.
Following the destruction caused by ammonium nitrate exploding at Beirut’s port, there are concerns globally about its storage.
The chemical is widely used around the world, as a fertiliser or for explosives in mining. But there are strict regulations about where it can be kept and for how long.
And its location is often kept secret because of its potential for making bombs.
4. Behind the Beirut explosion lies the “lawless world of international shipping” writes Laleh Khalili in The Guardian.
The disaster has roots in a global network of maritime capital and legal chicanery designed to protect businesses at any cost.
5. Storage of liquid cargoes: North examines the legal implications.
The COVID-19 pandemic has triggered a plummeting consumer demand for oil. This has resulted in a shortage of shore-side storage capacity, leading to a sharp increase in the number of tankers receiving orders to act as floating storage. Such orders can give rise to a number of legal issues, the most common being whether such an order is valid or if it can be rejected. In answering this question, careful consideration must be given to the terms of the applicable charterparty.
In the context of a time charterparty, the issue will be most straightforward if there is a specific “floating storage” clause. Certain standard form charterparties include such a clause (e.g. clause 21 of BPTIME 3); and where such a clause is included, then subject to the terms of the clause, the orders will most likely be valid. If no express provision is made for floating storage, there is more potential for ‘grey areas’ – and therefore disputes – to arise. Charterers typically enjoy wide discretion as to the employment of a vessel, and can issue employment orders within the usual limits as to trading ranges, lawful cargoes, safe ports and places, etc. On that basis, orders to wait off port for a relatively short period, whilst awaiting the availability of shore-side storage capacity, will in most cases constitute normal employment of the vessel and be valid. However, should the vessel be asked to wait for a period of some months, the situation is far less clear.
6. Limits on receivers’ obligations. Sally-Ann Underhill of Reed Smith considers them in this case.
In Sea Master Shipping Inc v Arab Bank (Switzerland) Ltd & Yousef Freiha & Sons SA  EWHC 2030, Owners, in a situation where Charterers were in insolvent liquidation and unable to meet their obligations under a voyage charter, sought to hold receivers liable for delay at the discharge port under the bill of lading.
The decision by the arbitration tribunal that neither the financing bank nor the receivers were liable for discharge port demurrage was unappealable.
That left the Commercial Court considering the Owners’ attempt to introduce an implied term into the contract of carriage (contained in or evidenced by the bill of lading), that the bank and / or the receivers would: (i) take all necessary steps to enable the cargo to be discharged and delivered within a reasonable time; and / or (ii) discharge the cargo within a reasonable time.
In the usual way, the bill of lading included a clause incorporating the terms of the voyage charter and it was common ground that this meant that they were incorporated “insofar as they [were] appropriate and relevant for such incorporation”…
…The Court found that the receivers were under an obligation only to pay for the discharge operation and, in connection with that obligation, to meet the cost of appointing stevedores. There was no reason, therefore, to imply the term proposed.
7. London has over 80% share of global maritime arbitration market finds HFW.
Research by global, sector-focused law firm HFW has found that London continues to dominate the market for international maritime arbitration, accounting for more than 80 percent of all cases globally.
London handled 1,737 maritime arbitrations in 2019 – up 14% on the previous year – which equates to around 83% of all international maritime arbitrations that year, according to HFW’s analysis of data from major arbitral institutions around the world.
Singapore and Hong Kong – London’s two strongest competitors – trailed with 229 and 124 international maritime arbitrations in 2019, respectively.
8. Casualty response and sustainable solutions amidst a pandemic: a case study from GARD.
In the early morning hours of 23rd March, the laden bulk carrier, KAAMI grounded in bad weather in the Little Minch channel between the islands of Skye and Lewis off Scotland. Gard insured the KAAMI for both P&I liability, and Hull & Machinery. Our authors, Gunnar Beisland and Påsan Vigerust handled the casualty and tell the story as their case went from salvage to wreck removal and, ultimately, sustainable recycling of the vessel and cargo. [Ed: Be sure to watch the video.]
9. Insurers pinpoint the complex causation of container casualties revealed at joint TT Club and
UK P&I Club webinar.
Both the extent and pace of growth in container volumes have put strains on a wide range of operational procedures and the physical hardware employed to handle the steel boxes, particularly onboard ships. Attention to numerous factors is needed to avoid repeated casualties.
A webinar organised by the Thomas Miller managed insurance mutuals, container freight specialist TT Club and protection & indemnity insurer, UK P&I Club, revealed the diverse range of factors important to safe container ship operations and the security of the container stacks they carry. ‘Container Casualties – the sum of the parts’ looked in detail at the complex range of moving parts involved in these operations and concluded that each must be considered individually and collectively in order to keep collapse of stow incidents to a minimum.
In chairing the session, UK P&I Club’s Loss Prevention Director, Stuart Edmonston set the scene, “Container loss incidents attract attention. Overall, the industry loses a relatively small amount of roughly one unit per 160,000 carried but each loss has significance to a range of stakeholders, including the ship operators, cargo interests, insurers and, not least to the natural environment both at sea and on shore.”
A review of the webinar proceedings ( https://vimeo.com/444176895 ) highlights the wide range of influences that can impinge on stack collapses on ships and the potential loss of containers overboard. Peregrine Storrs-Fox TT Club’s Risk Management Director took the lead in summarising these. “While adverse weather and the avoidance of it through to considered design and construction of container ships are clearly vital, the ‘moving parts’ of causation range through all aspects of container operations. TT Club is involved in all aspects of the container supply chain, but uniquely concentrates its energies on those factors considered within the Cargo Integrity campaign that have bearing on this type of casualty, such as the correct declaration of cargo mass as well as the safe packing and securing of the freight within the container, together with the container structure and maintenance.”
10. Court discharges freezing order in unsubstantiated misdelivery claim. Ince & Co’s Rania Tadros and Natalie Jensen lay out the case.
The claimant, Fimbank PLC (“Fimbank”), provided finance to its customer, AOS Trading DMCC (“AOS”), for the purchase of a cargo of Ukrainian wheat that was shipped to Egypt on board the MV Nika (the “Vessel”).
Fimbank claimed that it became the lawful holder of the bills of lading pursuant to its arrangement with AOS. The arrangement between Fimbank and AOS was that the cargo would be discharged by the Vessel without production of the bills of lading and transferred into a bonded warehouse. The original bills in the hands of AOS’ buyers, collected by them from the collecting bank against payment by them, would lead to discharge of the cargo from the bonded warehouse.
The shipowners, Discover Investment Corp (“DIC”), discharged the cargo to an agent on behalf of AOS without production of the original bills of lading and against a letter of indemnity from the Vessel’s charterers. The cargo was consigned to the bonded warehouse, but was subsequently delivered out of the warehouse against production of forged bills of lading. The cargo was never paid for.
Fimbank commenced arbitration, seeking damages from DIC for misdelivery. It also obtained a freezing order on a without notice basis. At the return date, DIC sought to have the freezing order discharged on the basis that Fimbank had no good arguable case, that it had failed to disclose material facts to the Court granting the freezing order, that DIC had no assets on which the freezing order could bite and that Fimbank had breached an undertaking in the order.
The Commercial Court decision
The Court agreed that there was no good arguable case to support a freezing order. DIC had submitted that the cargo was simply discharged by the Vessel pursuant to the LOI to an agent acting on behalf of AOS, at which point DIC gave up any control over the cargo. The Court agreed that, in those circumstances, DIC was no more liable than if it had delivered directly into Fimbank’s own custody and the cargo had subsequently been stolen. In those circumstances, DIC could not be held liable for the loss of the cargo.
Nigeria impact survey.
The Maritime Anti-Corruption Network (MACN) has launched an anonymous Impact Survey to better understand the evolving situation relating to the operating environment in Nigerian ports and terminals and assess the impact of MACN’s efforts in Nigeria.
The Impact Survey focuses, amongst other issues, on port clearance procedures and corruption such as demands for facilitation payments.
BIMCO supports MACN’s endeavours to facilitate shipping operations and fight corruption. Members are therefore encouraged to forward the questionnaire to relevant ships and ask that they respond to it before 15 September 2020, as this input will be very valuable to MACN’s work.
Just In Time Arrival Guide issued to support smarter, more efficient shipping.
A new Just In Time Arrival Guide, which aims to provide both port and shipping sectors with practical guidance on how to facilitate Just In Time Arrivals, has been released.
The Guide has been developed by the Global Industry Alliance to support low carbon shipping (Low Carbon GIA), based on research and discussion amongst its membership. The Guide documents the findings of a series of industry roundtables which brought together nearly 50 companies and organisations who are key stakeholders in the port call process.
Widely recognised as a means of increasing port efficiency and port call optimisation, the successful implementation of JIT Arrivals can have a significant environmental impact through reduced GHG emissions from optimising the ships speed to arrive just in time. The concept is based on the ship maintaining an optimal operating speed to arrive at the Pilot Boarding Place when the availability is assured of: 1. berth; 2. fairway; and 3. nautical services (pilots, tugs, linesmen). JIT Arrivals also contributes to reduced time at anchorage and therefore reduced congestion in the port area. It is estimated that ships spend up to 9% of their time waiting at anchorage, which could be reduced through the implementation of JIT Arrivals.
Download the Guide here: http://www.imo.org/en/OurWork/PartnershipsProjects/Documents/GIA-just-in-time-hires.pdf
Benchmarking crew wage costs: Seafarer Employers’ Association – July 2020 Report.
Recruitment agency, Spinnaker, provides comprehensive market data on shore-based compensation in the shipping industry. To complement Spinnaker’s shore-based reporting, the Seafarer Employers Association was launched and the first Seafarer Daily Wage Cost Reports to compare wage costs for crew on all major vessel types were published in 2017. The recently published Seafarer Wage Cost report captures data from over 45 companies including shipowners, ship managers and oil majors. Data was supplied for 48 different ranks ranging from Senior Officers to Ratings representing over 250,000 seafarers and covering 92 different nationalities. In order to be a part of their seafarer wage cost benchmarking, companies are required to join the Seafarer Employers’ Association of which Spinnaker are secretariat.
Michelle Otero Valdés, partner of Chalos & Co, P.C. in Miami, Florida, has been appointed Chair of the Florida Bar Admiralty Law Committee by the President of the Florida Bar. Otero Valdés’ term as Chair will run through June 30, 2021.
Skuld has appointed Helen Yiacoumis head of freight, demurrage and defence at Skuld Piraeus.
Prior to joining Skuld, Yiacoumis spent almost 18 years at North of England P&I where she progressed to director in the Greek office. Yiacoumis is a qualified solicitor and worked at Holman Fenwick & Willan International between 1999 and 2001.
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“The meeting of two personalities is like the contact of two chemical substances: if there is any reaction, both are transformed.” Carl Jung (1875 – 1961).
Following last week’s news that Origami Bank had folded, we are hearing that Sumo Bank has gone belly up and Bonsai Bank plans to cut back some of its branches. Karaoke Bank is up for sale and is going for a song.
Meanwhile, 500 back-office staff at Karate Bank got the chop. And analysts report that there is something fishy going on at Sushi Bank and staff there fear they may get a raw deal…
Sandra Speares to take the helm.
And finally, my temporary assignment to the editorship of The Maritime Advocate has come to an end and it’s time to hand over the watch.
It’s been a real privilege to have helped in the relaunch of the “AVO” these past months. I thank our gracious publisher, Humphrey Hill, for having given me the opportunity, and for his support throughout. It’s been intriguing to delve back into the world of claims and casualties, litigation and arbitration, in an industry I happily made my career from.
I’m very confident that the editorship will be in good hands with such an experienced journalist taking the helm and as I return to partial retirement (hopefully completing at least one more novel and enjoying a little R&R along the way – and of course my fortnightly AVO.)
So with this being my last issue, I am pleased to introduce readers to The Maritime Advocate’s new Editor, Sandra Speares. During her time at Lloyd’s List Sandra acted as Legal Editor and more recently has been freelancing for a variety of different maritime journals as well as acting as Editor of Bulk Terminals International. We wish her fair winds and following seas.