Clause 19, GAFTA 64. "… in case of resales/repurchases all notices …".
Agreed delivery period was 10 November – 10 December 2010, and since 10 December 2010 was a Friday and it is common ground that "the next business day following the last day of the delivery period" on which any notice claiming extension had to be served was Monday 13 December 2010. The Buyers’ vessel was delayed and because of this they tendered a notice claiming extension at 1709 on 13 December 2010. The Sellers, pursuant to their interpretation of clause 19, considered this notice to be out of time limits imposed by notice provision.
Soufflet Negoce SA v Fedcominvest Europe Sarl  EWHC 2405 (Comm).
BPVOY4. Ship-To-Ship Transfer. (Un)reasonable withholding approval of the receiving Vessels.
VLCC The Falkonera was chartered to carry crude oil from the Yemen to Pasir Gudang, Malaysia as discharge port and operation to be done by way of a STS transfer. During negotiating stage on vessel’s approach to Pasir Gudang, the owners rejected several Charterers’ proposals related to two nominated VLCCs, which included intention to provide them with LOI against any damage that might be sustained in the course of STS transfers between The Falkonera and the Frontline vessels. The Court found that owners unreasonably withheld approval of …
Falkonera Shipping Co v Arcadia Energy Pte Ltd (The Falkonera)  EWCA Civ 713
Time charter repudiation by the charterers and the owners’ duty to mitigate.
The Owners claimed damages for wrongful repudiation calculated by reference to the net loss of profits which they alleged that they would have earned during the additional two year extension. The Charterers argued that the Owners were bound to bring into account and give credit for the difference between the amount for which the Vessel had been sold in October 2007 (US$23,765,000) and her value in November 2009 (US$7,000,000). The Owners argued that the difference in …
Fulton Shipping Inc of Panama v Globalia Business Travel S.A.U. (formerly Travelplan S.A.U) of Spain  EWHC 1547 (Comm) (21 May 2014)
Injurious Cargoes. Whether anything that tends to harm the vessel as an instrument of trade is harmful to the vessel?
The High Court rejected owners’ submission was that "the vessel in the claimants’ hands is an instrument of trade and anything that is harmful or tends to harm the vessel as an instrument of trade is harmful to the vessel". Charterparty wording directed to physical damage: it expressly covers two types of cargo which might cause physical damage to the vessel, acid and explosives, and the inference is that it also covers other cargoes that also might cause physical damage.
American Overseas Marine Corp v Golar Commodities Ltd (The LNG Gemini)  EWHC 1347 (Comm)
Lifeboats: born to be unsafe? Questions and answers.
The wave of emotional criticism and difficult to answer questions driven by The Sewol disaster prompted many discussions about safety of passengers on board of ferry vessels and usage of lifeboats as the main means of survival. Modern lifeboats have to be enclosed, self-propelled, with sprinkler fire-fighting system, able to be lowered remotely from inside, must be equipped with on-load release mechanism … all these difficult to meet criteria became a birth trauma of this adopted child of ship’s architects whilst cost effectiveness prevented any positive improvement all these many decades since its birth. Thus, clumsy original design was later attempted to be patched by equally unsuccessful modifications.
Read this article here:Lifeboats: born to be unsafe?
Can single bill of lading be subject to two different package limitation figures?
During sea passage part of claimants’ cargo was damaged. The Hague-Visby Rules were applicable as a matter of statute law but Paramount clause in Bills of Lading was referring to the Hague-Visby Rules.
The owners accepted and paid damages as limited by The Hague-Visby Rules, but the claimants contended that they are entitled to choose the higher figure within single bill of lading between two different package limitation figures.
Read this article in full: Yemgas Fzco & Ors v Superior Pescadores S.A. Panama  EWHC 971 (Comm) (02 April 2014)
Required inevitability of anticipatory breach.
In Geden Operations Ltd v Dry Bulk Handy Holdings Inc (The Bulk Uruguay)  EWHC 885 (Comm) (28 March 2014) the High Court rejected the time Charterers’ argument that there is a principle of law whereby a party who has made his performance dependent on a discretion to be exercised by a third party is ipso facto deemed to be evincing an intention not to perform. Anything short of inevitability would be insufficient for treating both renunciation and self induced impossibility as entitling the innocent party to treat the contract as at an end.
Read this article in full: Geden Operations Ltd v Dry Bulk Handy Holdings Inc (The Bulk Uruguay)  EWHC 885 (Comm)
Clause 8 of GAFTA 49. Buyer’s right to extend period of delivery.
Sellers were unable to provide cargo due to Ukrainian government export restrictions in the form of export quotas for various cereal products. Buyers claimed 21 days extension of the shipment period in accordance with Clause 8 of GAFTA 49. By reason of inability of obtaining an export licence and according to the terms of contract, specifically the Prohibition Clause in GAFTA 49, sellers declared the contract as cancelled. Inspite of buyers insistance that the effect of their "extension" was to extend the period for delivery …
Nidera BV v Venus International Free Zone for Trading & Marine Services SAE  EWHC 2013 (Comm)
Safety of berth versus Navigation to the berth in a proper and seamanlike manner.
The "XIN XIA MEN" was discharging and loading containers at Genoa container terminal. Between about 17:10 and 17:30 strong winds and rain from the south west passed over the port which caused vessel’s winches to render and slack her stern and head line moorings, then her aft spring lines broke and she was blown off the quay. By about 17:18 the vessel had stabilised and the Master considered her to be back under control. Shortly thereafter she was re-berthed. Somewhere in the course of re-berthing vessel’s bow stroke and damaged shore crane …
Terminal Contenitori Porto Di Genova Spa v China Shipping Container Lines Ltd  EWHC 1629 (Comm).
The Court of Appeal considered off-hire claim under amended NYPE, Cl.49. Capture, Seizure, Arrest.
The "Global Santosh" was mistakenly arrested together with her cargo by the cargo seller in West Africa’s port to secure a claim for demurrage against the buyer. Charterers withheld hire under clause 49.Capture, Seizure, Arrest of the charterparty in respect of the period for which the vessel was under arrest, i.e., 14.00 hours on the 18th December 2008 and 07.03 hours on the 15th January, 2009. The owners argued that an act by a delegate of charterers (the cargo receiver) causally linked to the capture, seizure, detention or arrest of the vessel.
NYK Bulkship (Atlantic) N.V. v Cargill International S.A.  EWCA Civ 403.
Is the seller to pay fees in full even if they exceed the price?
In Omv Supply And Trading AG v Kazmunaygaz Trading AG (Rev 1)  EWCA Civ 75 (06 February 2014) the Court of Appeal rejected byer’s submission that clause 6 makes clear that the seller is to pay the fees whatever they may be even if they exceed the price. If the parties had intended that to be so they would need to have used clear language to that effect. Instead they provided for a deduction of fees from the price, no doubt contemplating that the fees would always be less.
Read this article in full: Trafigura Beheer BV v Navigazione Montanari Spa  EWHC 129 (Comm)
Does In-Transit Loss (ITL) clause cover cargo stolen by pirates?
In Trafigura Beheer BV v Navigazione Montanari Spa  EWHC 129 (Comm) (30 January 2014) the vessel while waiting for discharge orders off Cotonou was hijacked by pirates. Pirates arranged for an STS transfer of approximately 5,300.00 mts of cargo to unknown vessel. As a result of STS transfer this transferred or stolen cargo was never delivered to the consignees. Vessel was released by pirates next day. Charterers claimed value of cargo stolen by the pirates under In-transit loss clause.
Read this article in full: Trafigura Beheer BV v Navigazione Montanari Spa  EWHC 129 (Comm)
The contract price/market price differential is not a computation of lost profit.
In Glencore Energy UK Ltd v Cirrus Oil Services Ltd  EWHC 87 (Comm) (24 January 2014) the judge held that "firm offer" email was intended to be capable of acceptance with a binding contract thereby concluded and moreover stated that the contract price/market price differential is not a computation of lost profit. Lost profit is the difference between the total net cost to the seller of acquiring the goods and bringing them to market on the one hand and the net sale price that would have been achieved on the other …
Read this article in full: Glencore Energy UK Ltd v Cirrus Oil Services Ltd  EWHC 87 (Comm)
The Court of Appeal clarifies application of cl.15 of NYPE form The Athena  EWCA Civ 1723.
The key to a proper understanding of the off-hire clause is in my view that it is triggered by a cause preventing the full working of the vessel. It is axiomatic that the full working of the vessel refers to her ability to do that which she is immediately required to do.… The service immediately required of The Athena whilst drifting in international waters was to proceed to the roads at Benghazi. It is nothing to the point in computing the time lost by reason of the Master’s default that a similar length of time, … might have been lost had there been brought forward the moment at which the service immediately required of the vessel became not the sea passage but rather berthing and discharge.
News Archive @ 2013
The Court of Appeal dismissed Charterers’ appeal in ED & F Man Sugar Ltd v Unicargo Transportgesellschaft GmbH  EWCA Civ 1449.
Lord Justice Tomlinson giving the only reasoned judgment, underlined that the arbitrators’ findings, based on the evidence provided by the charterers, led them to right conclusion that there was no mechanical breakdown of the conveyor. The Court of Appeal also agreed with the judge that The Afrapearl (Portolana Compania Naviera Ltd v Vitol SA Inc  EWCA Civ 864) and Olbena SA v Psara Maritime Inc, The Thanassis A unreported, 22 March 1982, cases should be distinguished as concerned simply with "breakdown of machinery or equipment",
ED & F Man Sugar Ltd v Unicargo Transportgesellschaft GmbH  EWHC 2879 (Comm).
Collision of mega-vessels in the Malacca Strait on 29 December 2013..
On Dec 29, 2013, Liberian-Flagged 349 metres long container vessel "Hanjin Italy" collided with 314 metres long LNG tanker "Al Gharrafa" early Monday in the Malacca Strait, off Singapore. "Al Gharaffa", which had sailed from Ras Laffan Port on Dec 19 to Tokyo Electric Power Co’s Futtsu LNG terminal in Japan, hit starboard side of container carrier. "Hanjin Italy" sustained relatively slight damage to her midship shell plating just beneath main deck. "Al Gharaffa" appears to have suffered more serious damage to her bow.
Read this article in full: Collision of mega-vessels in the Malacca Strait, 29 Dec 2013.
24 July 2014. Time Charters. Place of Redelivery
Place of redelivery together with the time of redelivery are the two terms which define the extent of contractual service. Range "from Japan to Persian Gulf" can encompass Honolulu as it was held in The Sanko Honour because under the provision of charterparty Japan was the central locus. When both terms expressly stipulated in time charter, failure of charterers to comply with either of them, will constitute breach of the charter for which the charterers will be liable in damages.Read more →
24 July 2014. Time Charters. Redelivery - Power of disposition
Mackinnon L.J., called a time charterparty "a misleading document, because the real nature of what is undertaken by the shipowner is disguised by the use of language dating from a century or more ago". Originated from what is now known as demise charterparty, certain phrases "survived" to be seen in modern time charters provisions. Delivery and redelivery terms are from that category … "Redelivery" relates to the power of disposition of the ship. When the power of disposition is restored to the owner there is a redelivery within the meaning of the clause.Read more →
22 July 2014. Soufflet Negoce SA v Fedcominvest Europe Sarl  EWHC 2405 (Comm)
Sale Contracts – GAFTA 64 – Clause 19 – Whether "any notice received after 1600 hours on a business day shall be deemed to have been received on the business day following" apply to all contracts or only in case of resales/repurchases?Read more →
20 July 2014. Time Charters. Wrongful termination
Repudiation or termination of charter is wrongful when either party misinterpret its right as injured side to bring the contract to an end. Decision to terminate contract is wholly in hands of the innocent party, but the right to terminate is only accrued when an opposite side has broken such clause in charterparty which is:
i) condition or
ii) intermediate term which deprives innocent party of substantially the whole benefit of charterparty.
20 July 2014. Time Charters. Repudiation. Damages
Damages for repudiation of a time charter assessed on the basis of general principle of restitutio in integrum, within the limits expressed in Hadley v Baxendale, (1854) 9 Exch. 341 and comparable with that of the law for sale of goods: where there is an available market for the goods in question the measure of damages is prima facie to be ascertained by the difference between the contract price and the market or current price of the goods at the time or times when they ought to have been delivered or (if no time was fixed) at the time of the refusal to deliver. Sale of Goods Act 1979, s 51(3).Read more →
19 July 2014. Law of Contract: Option to disregard repudiation
One may wonder why aggrieving party should wish to go on and incur expense in performing the contract instead of confirming repudiation, terminating contract and recovering damages from the party in default.Read more →
19 July 2014. Law of Contract: Repudiation.Option to terminate
In majority of cases innocent party may and will accept the repudiation and terminate contract. Termination of contract in case of breach generally means that primary obligations of both sides have come to the end and the innocent party or, in some cases, both parties are excused from further performance. In other words injured party is no longer bound to pay any further payments which had not yet fallen due at the time of rescission, but remains liable to perform obligations which had accrued before rescission.Read more →
19 July 2014. Law of Contract: Repudiation.Positive Election
… it is said that there is no third option open to the innocent party in the sense that there is no way to affirm the contract and yet be absolved from tendering further performance. But there is a recognised decision making period of time between acceptance of repudiation and affirmation of the contract.Read more →
19 July 2014. Law of Contract: Repudiatory Breach
Generally, any breach which goes to the root of the contract and gives a right to the aggrieved party to exercise his option to terminate the contract, or in the other words to repudiate the contract, is a repudiatory breach. Breach of condition therefore is always a repudiatory breach (for Conditions, Warranties and Innominate terms see Contractual Terms). The following acts illustrate accrual of the right to repudiate:
• Breach by the shipowner of implied common law undertakings to provide seaworthy ship;
• Breach of duty to commence and carry out the voyage contracted for with reasonable diligence and without unjustifiable deviation;
• Breach by the time charterer expressed or implied duty to pay hire accurately and in full.
18 July 2014. Law of Contract: Repudiation. Drastic Measure
Decision to terminate contract is wholly in hands of the contracting party, but the right to terminate is only accrued in certain circumstances. Therefore, while each of the parties to contract is free to stop his contractual performance when he considers that happening of certain events gave him a right to do so, such action if later be found by the court as a wrongful termination, may leave him liable for substantial damages. Thus, repudiation is a very important decision which if rightly exercised can become a highly effective remedy, but when wrongfully made may fire back with equal force.Read more →
18 July 2014. Law of Contract: Repudiation and Rescission
Imperfection of terminology concerning to repudiation and rescission is well known. It is said that owing to the historical difference between common law and equity, the language adopted is far from uniform: while common lawyers usually use the word repudiation, equity lawyers inclined to employ words rescission or setting a contract aside.Read more →
17 July 2014. Time Charters. Repudiation. Available options
In recent decision of the Commercial Court in Isabella Shipowner SA v Shagang Shipping Co Ltd (the Aquafaith)  EWHC 1077, the shipowners appealed from the arbitrator’s award on the question of law, whether they were entitled to refuse early re-delivery of the vessel and affirm the charter, or whether they were bound in law to accept early re-delivery and merely entitled to sue for damages. (follow these links to read more on the general rule on the right of innocient party to elect whether to affirm or disregard to accept repudiation.)Read more →
14 July 2014. Time Charters. Concept of vetting.
Notwithstanding that fact that vetting inspections concerned with the physical condition of the ship for the purpose of sea carriage of nominated cargo, such inspections are outside of scope of either legal readiness or seaworthiness requirements, because, they are not "required by the law of the vessel’s flag or by the laws, regulations or lawful administrative practices of governmental or local authorities at the vessel’s ports of call".Read more →
11 July 2014. Time Charters. Off-hire due to the seizure by pirates
Apart of human problem of releasing crews from lengthy captivity there are many complex financial issues related to ship and cargo being out of owners’ hold for significant time. Masefield AG v Amlin Corporate Member Ltd  EWHC 280 (Comm) and Cosco Bulk Carrier Co Ltd & Anor v M/V Saldanha C/P dated 25/06/08  EWHC 1340 (Comm)Read more →
9 July 2014. Revised Letters of Protest. User’s Manual.
7 July 2014. Nidera BV v Venus International Free Zone for Trading & Marine Services SAE  EWHC 2013 (Comm)
Sale of Goods – GAFTA 49 – Clause 6 and 8 – Extension of Delivery – Whether buyer has unqualified right to extend period of delivery when timely notice served?Read more →
18 June 2014. Terminal Contenitori Porto Di Genova Spa v China Shipping Container Lines Ltd  EWHC 1629 (Comm)
Contract – Safe Berth – Sudden increase of wind blow the vessel off terminal – Damage to shore crane during re-berthing – Whether Owners conducted themselves with reasonable skill and care at all times when using the Terminal?Read more →
11 June 2014. Falkonera Shipping Co v Arcadia Energy Pte Ltd (The Falkonera)  EWCA Civ 713
Shipping – Shipping – Voyage Charter – BPVOY4 cl.8.1 – STS lightering clause – STS transfer between two VLCCs – Owners withholding their approval of the receiving Vessels – Whether no reasonable shipowner could have regarded their concerns as sufficient reason to decline approval?Read more →
27 May 2014. Fulton Shipping Inc of Panama v Globalia Business Travel S.A.U. of Spain  EWHC 1547
Shipping – Timecharter – NYPE form – Charter repudiated by the charterers with two years to go – Owners sell vessel because they cannot find employment – Whether the Owners required to give credit for any benefit in realising the capital value of the Vessel, by reference to her capital value at the end of charterparty time?Read more →
20 May 2014. Off-hire due to marine growth.
Accumulation of marine growth (barnacles or molluscs) on ship’s hull in warm waters is often a cause of significant reduction in ship’s speed and impairment of vessel’s performance. Such accumulation produces particularly negative effect on speed and fuel consumption characteristics after prolonged idle periods (more than 2 weeks) at anchor in tropical water. As a result, this natural phenomenon brings up the following issues:
i) loss of speed and increase of time during loaded and ballast passages;
ii) increase of fuel consumption to compensate speed underperformance;
iii) expenses and delays associated with necessity of hull cleaning.
14 May 2014. Lifeboats Accidents.
Recent accidents with reports and photos.Read more →
14 May 2014. Use of VHF in Collision Avoidance. Language barrier, wrong assumptions and national incompatibility.
Filipino 2/O of CMG CGM Florida offered his Chinese colleague 2/O, who was on board for a period of familiarisation, to make a passing agreement with Chinese 2/O officer on give way vessel Chou Shan in Mandarin language, which he was not able to understand and therefore was not aware about exact outcome of communication between two Mandarin speaking officers.Read more →
12 May 2014. Amended Time Charters. Off-hire clause.
A charter-party might provide that the vessel would remain on hire except during delay caused by a breach of contract on the part of the owner; or it might provide that the vessel should be off hire in the event of delay, unless caused by breach of contract on the part of the charterers. Either solution would provide a rule that was tolerably clear and workable. But those who make charter-parties prefer something more complicated. They provide for a vessel to be off hire in some events which are not a breach of contract by either party - for example, interference by authorities in the present case. As is fashionable nowadays, the clause is said to deal with allocation of risk. The only general rule that can be laid down is that one must consider the wording of the off-hire clause in every case.Read more →
10 May 2014. Amended Time Charters. Off-hire.
Each to time charter contract protects is aware of the possibility of the benefit which party is contracting to obtain, being interrupted by various causes and each party protects itself against such eventualities. The owner, for example, has a right to withdraw the vessel on the charterer’s failure to make its payments punctually and regularly; on the other hand the charterer is guarding himself against interruptions in ship’s services by the clause which suspends payment of hire during such period of time, when happened by reason of any of the contingencies which this particular clause contemplates.Read more →
10 May 2014. American Overseas Marine Corp v Golar Commodities Ltd (The LNG Gemini)  EWHC 1347 (Comm)
Shipping – Timecharter – Injurious Cargoes – Whether anything that is harmful or tends to harm the vessel as an instrument of trade is harmful to the vessel?Read more →
7 May 2014. Amended Safe Port Warranty - Named port or ports.
27 April 2014. Added Tank Cleaning: Absolute liability.
Tank cleaning operation is a procedure by which the owner assures cargo readiness or in other words physical readiness of the vessel to load the goods nominated by the charterer. If the vessel is not fit to carry the goods specified in the contract, that will amount to uncargoworthiness as an integral part of unseaworthiness, even though the vessel itself might well be able to complete the contract voyage in safety.Read more →
27 April 2014. Added Tank Cleaning: Extent and operation of duty of due diligence.
When the owners warrant only exercising of due diligence, their failure to present ship’s tanks cleaned to satisfaction of charterers’ inspector(s) at loadport, not necessarily constitute a breach. Consequences of non-acceptance of the vessel’s tanks before loading and an effect of such failure on parties liabilities under laytime and demurrage provisions was a subject of an interesting analysis done by Moore-Bick J in Triton Navigation Ltd v VITOL SA (The Nikmary)  EWHC 46 (Comm).Read more →
27 April 2014. Added Tank Cleaning: Jointly appointed inspector.
It is very unlikely that the parties would have intended to entrust such an important determination unless the person was jointly appointed. By analogy with the Protank Orinoco a determination by charterers’ surveyor alone or by jointly inspection by independently appointed inspectors has a much limited effect and would merely entitle the charterer to order vessel to undertake some further cleaning.Read more →
27 April 2014. Added Tank Cleaning: Continuous Obligation under time charter.
To evaluate whether the owner has discharged his duty of due diligence when performing tank cleaning operation the court scrutinises documentary evidence such as ship’s log books, recorded procedures, master’s and chief officer’s reports and experts evidence. Thus, investigation invariably raise complex technical questions as shown in The Aditya Vaibhav  1 Lloyd’s Rep 63 and especially in The Liepaya  1 Lloyd’s Rep 649.Read more →
24 April 2014. Added Laytime & Demurrage in Charterparty and sale contract
International transaction for the sale of goods has underlying contract of sale between the seller and the buyer and a contract of carriage between either seller or the buyer with the carrier, so there are two different contracts between different parties. In case of FOB contract it is usually the buyer who enters into the contract of carriage, i.e. charters the vessel, and in case of CIF the seller.Read more →
24 April 2014. Added Laytime & Demurrage in sale contract - indemnity or independent provision?
31 March 2014. Added Meaning of Safe Port: Safety System of the Port
While usually predictable, adverse meteorological conditions nevertheless can deeply affect safety of any given port. Therefore in many ports a system of protection against bad weather conditions has been developed. A port which is only safe in fair weather is not safe, as Donaldson J said in Vardinoyannis v The Egyptian General Petroleum Corp. (The Evaggelos Th)  2 Lloyd’s Rep 200 at p.206.Read more →
30 March 2014. Geden Operations Ltd v Dry Bulk Handy Holdings Inc (The Bulk Uruguay)  EWHC 885 (Comm)
Shipping – Timecharter – NYPE – Amended BIMCO Piracy Clause – GOA OK vessel – Anticipatory breach – Whether there is some principle of law whereby a party who has made his performance dependent on a discretion to be exercised by a third party is ipso facto deemed to be evincing an intention not to perform – Required inevitability of breach.Read more →
30 March 2014. Amended Dangerous Goods.
It was, however, disputed for many years whether absence of knowledge or means of knowledge on the part of the shippers is a good defence against the owners’ claim. This issue was specifically addressed by Lord Lloyd of Berwick in Effort Shipping Co Ltd v Linden Management SA (The Giannis NK)  1 All ER 495 when he hold at p.506 that:
…the liability of a shipper for shipping dangerous goods at common law, when it arises, does not depend on his knowledge or means of knowledge that the goods are dangerous.Read more →
26 March 2014. Amended Meaning of Safe Port: Physically safe.
Physical safety of the port refers to the dangers which the vessel may encounter when she enters and leaving port, such as wrecks, and other hidden dangers, narrow channels, shifting mud banks, ice etc.
Beginning from the last quarter of the nineteenth century rapid development of propulsion systems stimulated, in its turn, significant growth in size of the ships. Obviously, a bigger vessel was able to carry more goods and also draw more water but apart from draft limitations, such a vessel required larger sea room for anchoring and safe manoeuvring within port limits, tug assistance in narrow channels, experienced pilot and master to handle it inside the harbour. It therefore became necessary to consider individual particulars of each vessel to ascertain safety of port in question.Read more →
26 March 2014. Amended Meaning of Safe Port: Legal consequences of inaccessibility of port.
In cases when impediment made the port inaccessible for uncertain period of time the courts were involved in proceeding on an erroneous estimate of the facts and probabilities to apportion liabilities for resulting delays, or in other words, it was necessary to decide whether what had in fact been done was a commercially reasonable way to act to avoid an absurd result. This concept naturally involves consideration on the matter of degree, i.e. whether anticipated delay would have been inordinate.Read more →
26 March 2014. Amended Meaning of Safe Port: Effect of threats of war, aggression or terrorism.
If not the ship itself but only the goods would be subjected to confiscation such nominated port will also be unsafe and the master’s duty to take care of the cargo will justify him, apart from any express provisions in the bill of lading or charterparty, in landing the goods at another safe place. The case of Nobel’s Explosives Co. v Jenkins  2 Q. B. 326 shows that only threat (albeit well founded) of seizure is sufficient for the port to be considered as unsafe, Mathew J formulated his opinion in the following words:
I am satisfied that if the master had continued the voyage with the goods on board he would have been acting recklessly. It was argued for the plaintiffs that the clause did not apply unless there was a direct and specific action upon the goods by sovereign authority. It was said that the fear of seizure, however well founded, was not a restraint, and that something in the nature of a seizure was necessary. But this argument is disposed of by the cases of Geipel v Smith (1872) L.R. 7 Q.B. 404, L. R. 7 Q. B. 404, and Rodoconachi v Elliott, (1874) L. R. 9 C. P. 518. The goods were as effectually stopped at Hong Kong as if there had been an express order from the Chinese government that contraband of war should be landed. The analogy of a restraint by a blockade or embargo seems to me sufficiently close.Read more →
19 March 2014. Amended Safe Port. As near thereto as she can safely get.
18 March 2014. Amended Safe Port warranty: Nugatory nomination.
For a long time safe port implication was considered to necessary follow from the Charterers’ duty to order vessel to go to the port to which she could proceed. Nomination of impossible port is a nugatory nomination which could not possibly be acted upon. On the other hand it is said that no decision had yet gone so far in a voyage charterparty case and any suggested implied term has to be considered against the general business background to the transaction and the express terms of the charter.Read more →
18 March 2014. Amended Safe Port Warranty: Implied safe port warranty.
The main difficulty with implication of safe warranty comes from the considerations that the omission of an express warranty may well have been deliberate or such an implied term is not necessary for the business efficacy of the charter or because such an implied term would at best lie uneasily beside the express terms of the charter.Read more →
18 March 2014. Amended Safe Port Warranty: Named port or ports.
When the charterparty provides for a named port/berth or for two or more out of a number of named ports or berths nominated for the owners’ vessel to go, but silent as to safety, it is doubtful whether the charterer will be under any obligation as to the safety at all.Read more →
17 March 2014. Amended Safe Port warranty. Unnamed port or ports.
Second part of celebrated statement of Dixon CJ in Australian Wheat Board v Reardon Smith Line Ltd  HCA 27 is understood as possibly meaning that where the charterer cannot specify the place at the time of the charter a warranty would be implied that the nominated port or ports was or were safe. Due to lack of direct authority this question is yet to be finally decided.Read more →
17 March 2014. Added Safe Port. Express warranty - Case law overview.
Analysis of English and American case law on express safe port warranty in charterparties: St Vincent Shipping Co Ltd v Bock, Godeffroy & Co (The Helen Miller)  2 Lloyd’s Rep 95; Atkins International HA v Islamic Republic of Iran Shipping Lines (The APJ Priti)  2 Lloyd’s Rep 37; Ullises Shipping Corporation v Fal Shipping Co Ltd (The Greek Fighter)  EWHC 172 (Comm); AIC v Marine Pilot Ltd (The Archimidis)  EWCA Civ 175; The Ahos I  US11-2576.Read more →
17 February 2014. Added Omv Supply And Trading AG v Kazmunaygaz Trading AG (Rev 1)  EWCA Civ 75
Sale contracts – All fees … and penalties incurred by non EU origin, in force at the time of cargo customs clearance – Whether the seller is to pay the fees whatever they may be even if they exceed the price.Read more →
17 February 2014. Revised: Ignorant and Illiterate
One of the main rights of the seamen was and is their right to be paid at the time when their contract comes to an end. As far as English law goes this right was guaranteed by the lien over the vessel on which seaman has served and goes back over 400 years in English Admiralty Court. The right for wages based on the contract of employment was not always easy to enforce due to the "extreme disparity" between seamen and the shipowners …Read more →
16 February 2014. COLREGS Rule 19. The tragedy of Sun Cross
In recent collision case M.V. Sun Cross v M.V.Rickmers Genoa  EWHC 1949 (Admlty) the Court was to consider the question of liability arising out of a collision which took place in the early hours of 8 March 2005 in the Yellow Sea between the vessels SUN CROSS and RICKMERS GENOA. Behind this formal words related to claim of the cargo owners we must not forget that this collision brought with it much more valuable damage which cannot be remedied at all: lives of all but two of the crew of Sun Cross. Enormous human loss and many similar contributing factors put this tragedy in one line with Mineral Dampier disaster. In aftermath of collision, 13 crewmembers of SUN CROSS went missing; water flooded one of the RICKMERS GENOA’s cargo holds contained 600 tons of a granulated, magnesium-based desulphurization reagent. About four hours later, the RICKMERS GENOA suffered an explosion and fire in that hold. The chief officer died in the explosion and the ship itself sustained serious damage.Read more →
16 February 2014. COLREGS Rule 17.
… deck officers usually ignorant about distinction between sections (a)(ii) and (b), i.e. instances when stand-on vessel first ‘may’ and later ‘shall’ take avoidance action, and have little idea about objective assessment of distances between vessels at both stages. Distinction is important because it imposes different degree of duty on stand-on vessel and accordingly the law treats differently violation of ‘may’ and ‘shall’ obligations which is finally reflected in apportionment of collision claims.Read more →
16 February 2014. Use of VHF in collision avoidance.
… establishing of VHF contact and reaching of passing agreement does not bring as such any benefits for the purpose of collision avoidance when COLREGS and rules of good seamanship are forgotten or not followed.
… the persistent and unsuccessful attempts to make contact whilst in the meantime making no alteration of course and speed is strongly suggestive of a reliance on VHF contact as the method of first resort in collision avoidance.
06 February 2014. Added - In-Transit Loss (ITL) Clause.
… clause connotes loss that is incidental to the carriage of oil products, and does not extend to losses such as those that occurred because of the action of the pirates.…Read more →
06 February 2014. Amended Freight; Cargo Retention Clause.
Complexity of ascertainment of short delivery after a normal voyage was acknowledged by Kerr LJ in The Olympic Brilliance  2 Lloyd’s Rep 205, at p.209 as notoriously difficult in the bulk carriage of oil …Read more →
01 February 2014. Amended Time charters - Withdrawal as equivalent to cancellation.
Withdrawal is irrevocable and therefore operates only in one way: in way of cancellation of charterparty. There cannot be a partial withdrawal of the owners’ vessel and neither any temporarily suspension of the timecharter can take place unless such right is expressly granted to them by the contract …Read more →
01 February 2014. Amended Time charters - Time is of essence of withdrawal provision.
For late payment of hire to be of repudiatory character it would be necessary to find that they evinced clearly by it an intention not to be bound by the terms of the contract. However in several later decisions of the House of Lords unequivocal statements of Lord Diplock suggest that timely payment of hire is of the essence and therefore a condition of the contract of affreightment …Read more →
01 February 2014. Amended Time charters - Suspension of hire and suspension of service.
In Tradax Export SA v Dorada Compania Naviera SA of Panama (The Lutetian)  2 Lloyd’s Rep. 140, Bingham, J. held that the language of cl 15 of NYPE 46 form, which said that when time was lost from the listed causes "the payment of hire shall cease", accords with the Charterers’ construction that the parties intended the owners to be secured by payment in advance in respect of hire which he would or might earn but not in respect of hire which he could never earn. Accordingly, no hire was payable on the due date if the ship was off-hire at that time. …Read more →
29 January 2014. Amended Time charters - Withdrawal for underpayment.
The charterers have a right to deduct from the hire on the basis of equitable set off. But for such the deductions to be permissible it is essential that the estimates of the amounts of each of them were reasonable. To satisfy this test the deductions should be calculated on a reasonable basis in good faith and with detailed justifications. …Read more →
29 January 2014. Amended Time charters. Withdrawal.
The the common law generally gives to the innocent party only remedies in damages for breach of contract, unless said breach is of repudiatory character. Accordingly, the common law does not treat the late payment of hire by the charterers as a breach of sufficient gravity to give the owners a right to rescind the contract, unless the conduct of the charterers show unwillingness or inability to pay or delay in payment amounts to repudiation of the charter. …Read more →
27 January 2014. Glencore Energy UK Ltd v Cirrus Oil Services Ltd  EWHC 87 (Comm) (24 January 2014)
Sale contracts – Binding contract – Identity of purchaser – Repudiation – Measure of damages– Sale of Goods Act 1979 sec 50 (2)(3)Read more →
26 January 2014. ISM and Safety Culture.
So that is about ISM, at least in its modern status - of worship of words. I call it 'paper safety' (an non-existent reality), a bureaucratic set of rules, instructions and checklists which on the basis of foolproof presumption, covers every new accident with new checklist and circular, thus providing shipping managers with sufficient evidence against anticipated insurance claims.Read more →
26 January 2014. Lifeboats Safety.
See shocking video on reckless way of conducting rescue boat drill underway!Read more →
22 January 2014. Tanker Vetting F.A.Q.Are checklists for pre-arrival, pre-departure and pilot card effectively completed?
One will agree that observations which may occur here are quite obvious: some of checklists were found not properly completed, some items not ticked, UKC calculation not correct, signature missing, etc. But what if all requirements for checklists and master-pilot exchange fulfilled but inspector nevertheless made an observation?Read more →
20 January 2014. Tanker Vetting F.A.Q. Conduct of inspection.
As it often happens, inspector during the course of inspection makes passing observations and remarks in his pocketbook without much discussion on site as VIQ requires and without clear identification of his future observation. Then during final part of his inspection inspector announces that he …Read more →
20 January 2014. Master’s Blog. …Trust reposed in him
The authority of the master is so very great, and the trust reposed in him, including not merely the ship and goods of his employers, but he lives of the crew and passengers, so very extensive, that it is the bounden duty of the public to provide that it be not committed to ignorant or incapable hands.
Letters of Protest;
Tanker Vetting. FAQ;
Safety at Sea and more …
20 January 2014. Time Charters. Major approval clauses
Historically major’s approval was to the bigger extend based on the results of their physical inspection, which since the beginning of vetting process at the end of the last century, provided oil majors with first-hand information about tanker’s condition and her suitability for chartering purposes. Inspection report with the list of observations was a hard copy explanation of either rejection or duly communicated approval and a To-Do list for the owners and ship’s command.Read more →
20 January 2014. Time Charters. Oil Major Approval - Effective cause of major’s rejection
Negative vetting decisions are normally communicated to the party proposing the business without reasons and without the vetting company separately informing the operator. Thus a vessel operator will usually not know why the vessel has not been accepted. Analysis: Dolphin Tanker Srl v Westport Petroleum Inc (The Savina Caylyn)  EWHC 2617 (Comm)Read more →
11 January 2014. Galaxy Energy International Ltd v Murco Petroleum Ltd  EWHC 3720 (Comm)
Sale Contracts – Laytime – Delay in loading – Whether buyers agreed on extension of period of delivery – Market price.Read more →
11 January 2014. ED & F Man Sugar Ltd v Unicargo Transportgesellschaft GmbH  EWCA Civ 1449
Shipping – Voyage charter – Sugar Charter Party 1999 - The fire had destroyed the conveyor-belt system linking at the loading terminal – Vessel incurred substantial demurrage in loading port – Force-majeure clause (cl 28) – Whether the charterers have demonstrated that the delay in loading the vessel at Paranagua was caused by mechanical breakdown – Whether delay in loading caused by and/or in consequence of a fire which destroys mechanical loading equipment (and/or a port authority’s re-scheduling of loading following such destruction) counts as laytime under the Charterparty and whether the fact that loading thereunder at "1-2 safe berths" is lawfully relevant to the operation of Clause 28 of Charterparty.Read more →
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Bill of LadingRead more →
Bills of lading have been known from at least the thirteenth century. At those times shippers (usually the owners of the goods) as a rule accompanied their cargoes on the voyage to destination and bill of lading served only as an invoice of the goods shipped.
Later, in the sixteenth and the seventeenth centuries, when larger ships has begun to carry varied cargoes belonging to several shippers, this practice gradually came to naught and it became the custom to incorporate the terms of the contract of carriage into bill of lading. Finally to meet requirements of businessmen who wished to sell the goods before the vessel reached its destination bill of lading extended its status to a document of title.
LaycanRead more →
The term "laycan" is habitually used in the negotiation of charterparties, to refer to the earliest date at which the laydays can commence and the date after which the charter can be cancelled if the vessel has not by then arrived.
As indicated in the name itself, ‘laycan’ is an agreed time range at the end of which comes the date when the charterers are entitled to exercise their option and cancel the charterparty for non-arrival of the owners’ vessel. The charterers can, but are not obliged to exercise cancellation option. It is not unusual for the parties to come to solution and extend laycan for a day or so, considering market condition and availability of substitute tonnage in the area.
Off-hireRead more →
When the owners let their vessel to the time charterers in consideration of the payment of hire the later entitled to the use of the vessel during contracted period of time. Express provision for punctual advanced payment of hire usually followed by relevant withdrawal wording in time charterparty. Thus, being under strict obligation to pay for services rendered by the owners, the charterers are obviously concerned over uninterrupted employment of the vessel. On the other hand, there are many factors peculiar to shipping business make delays inevitable. To deal with consequences of such delays parties insert certain provisions into the time charter contract, which are primarily collected in an ‘off-hire’ clause.
Last updates on Law Quotes.
… the vice of our modern legislations is that they do not speak to the imagination. Man can be governed only by imagination; without it, man is a brute. It is a mistake to govern men like things; it is by speaking to man’s soul that he can be thrilled …
Words of Napoleon from Mémoires sur le Consulat de 1799 à 1804 par un Ancien Conseiller d’Etat, Thibaudeau 419-424, translated by and cited in Alain Levasseur, "On the Structure of a Civil Code" (1969-1970), 44 Tul. L. Rev. 693 at p. 698.
It is true that Law Merchant is sometimes spoken of as a fixed body of law forming part of the law, and, as it were, coeval with it, but as a matter of legal history this view is altogether incorrect… The Law Merchant is of comparatively recent origin; it is neither more or less than the usages of merchants and traders in the different departments of trade ratified by the decisions of the Courts of Law, which, upon such usages being proved before them, have adopted them as settled law with a view to the interests of trade and public convenience…
Per Chief Justice Cockburn in Goodwin v Robarts (1875) LR 10 Exch 337Visit Law Quotes to find more famous law quotations →
Last updates on Case Law Quotes.
But justice cannot always be measured in terms of money and in my view a judge is entitled to weigh in the balance the strain the litigation imposes on litigants, particularly if they are personal litigants rather than business corporations, the anxieties occasioned by facing new issues, the raising of false hopes, and the legitimate expectation that the trial will determine the issues one way or the other.
As Lord Griffiths said in Ketteman v Hansel  AC 189Read all quotes on Justice →
The silence was not mere silence, it was overlaid with all that had gone before. It was a speaking silence. The difficulty with silence is that it is normally equivocal. Where, however, it is part of a course of consistent conduct it may be a silence which not only speaks but does so unequivocally. Where silence speaks, there may be a duty on the silent party in turn to speak to rectify the significance of his silence.
Per Rix LJ in Stocznia Gdanska SA v Latvian Shipping Co and others  2 Lloyd’s Reports 436Find more legal definitios in huge collection of case law quotations →
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