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. Having used that language, they cannot be taken to have agreed that, …
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)
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
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).
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.
Is the $300M Tanker Vetting Industry Out of Control?
The vetting inspections of tankers by oil companies are proliferating in frequency, rising steadily in cost and, at an estimated $300m a year, are well on the way to running out of control. The Ship Inspection Report (SIRE) programme developed by the Oil Companies International Marine Forum (OCIMF) intended that tanker inspection reports should be shared by all OCIMF members. They are not. The cost of inspections should be shared by both parties. They are not. And to make matters worse, ship operators often have to pay the costs of luxury travel for inspectors.
Read this article in full here or here.
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 →
See all updates here →
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 →
Leave your questions and comments here
Although author encourages visitors to leave their comments using this form, but should you be unable or unwilling to use it for any reason you can mail to firstname.lastname@example.org to contact with him.