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notecheck32.png The High Court resolved inconsistency between incorporation of different Arbitration Clauses. The Eleni P [2014] EWHC 4202 (Comm)

When the parties have chosen to agree terms which, in certain respects, are inconsistent with each other, e.g. arbitration clause in one c/p provides for two arbitrators and an umpire whilst the BIMCO clauses in another c/p provide for three arbitrators and default provisions being also different.

The court held upheld the view that the BIMCO arbitration clauses are the "industry standard" and that was held to be a powerful indication that the parties, probably intended (assessed objectively), that the BIMCO Arbitration Clauses were the applicable clauses.

Transgrain Shipping BV v Deiulemar Shipping SpA & Anor (The Eleni P) [2014] EWHC 4202 (Comm).
notecheck32.png Court or Appeal: harshness of the result of a fraudulent devices rule is necessary inevitability.

Fraudulent devices, as their definition shows, are used by those who think their use desirable in order to bolster a claim which appears to have potential weaknesses and to avoid or cut short lines of inquiry or investigation which might prevent or postpone the payment of it. At the stage when they are used it will probably not be possible to tell whether the claim is one that will in the end be accepted, or held, to be valid.

The risk to the insurer is that the device may achieve its purpose, so that the insurer fails to explore the claim properly and pays out in respect of a claim where he may have a defence.

Versloot Dredging BV v HDI Gerling Industrie [2014] EWCA Civ 1349

notecheck32.png Use of VHF. Collision between Paula C and Darya Gayatri in Dover Strait.

Collision between Paula C and Darya Gayatri took place in Dover Strait TSS on 10 of December 2013. OOW on Paula C interpreted Dover Coast Guard question about "three sixty" turn as a suggestion, which he immediately adopted as solution to the collision avoidance problem. He put wheel hard to starboard and vessel started quickly approach Darya Gayatri, which in its turn just started her course alteration to port. In few moments vessels collided. This case study vividly illustrates how easy one "marker" word can break human line of thoughts and unintentionally prompt targeted person to catastrophic action.

Read more: Use of VHF in Collision Avoidance.

notecheck32.png Collision in Port Said between Colombo Express and Maersk Tanjong.

As per AIS data Maersk Tanjong was coming from Suez Canal Container terminal and recklessly approached vessel on his stbd side, i.e. Colombo Express. Not clear why it was not evident to master and pilot that there was no chance to squeeze ahead of Colombo Express. AIS data shows that Colombo Express was trying to keep as much to starboard as possible while Maersk Tanjong actually pushed Colombo Express out of fairway and to stbd side of canal. Huge ships in narrow canal obviously had difficulty in steering …

Watch dramatic video here.

notecheck32.png 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 [2014] EWHC 2405 (Comm).

notecheck32.png 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) [2014] EWCA Civ 713

notecheck32.png 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 [2014] EWHC 1547 (Comm) (21 May 2014)

notecheck32.png 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) [2014] EWHC 1347 (Comm)

notecheck32.png 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?

notecheck32.png 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 [2014] EWHC 971 (Comm) (02 April 2014)

notecheck32.png Required inevitability of anticipatory breach.

In Geden Operations Ltd v Dry Bulk Handy Holdings Inc (The Bulk Uruguay) [2014] 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) [2014] EWHC 885 (Comm)

notecheck32.png The High Court awarded damages res inter alios acta in The Glory Sanye [2014] EWHC 4176 (Comm)

Disponent owners, chartered the vessel GLORY SANYE to the Respondents on the SYNACOMEX 2000 form for a voyage from Constanza to Djibouti with a cargo of wheat. The Disponent owners themselves had time chartered the vessel from the registered owners on the NYPE 1946 form for a time charter trip "intention via Constanza to Djibouti or Port Sudan". The vessel loaded a cargo of wheat at Constanza and arrived at Djibouti on 20 November 2009. However, the vessel was unable to discharge because there were no receivers for the cargo. The vessel remained off Djibouti for some three months. An agreement, addendum no.1, was reached between the disponent owners and charterers that the discharge port would be changed to …

Read more: HBC Hamburg Bulk Carriers GmbH & Co KG v Huyton Inc (The Glory Sanye) [2014] EWHC 4176 (Comm).
notecheck32.png Infringement of customs regulations and malicious acts of third parties. Atlasnavios - Navegacao, LDA v Navigators Insurance Company Ltd & Ors [2014] EWHC 4133 (Comm)

Institute War and Strikes Clauses. 4 EXCLUSIONS
This insurance excludes
4.1 loss damage liability or expense arising from
… 4.1.5 arrest restraint detainment confiscation or expropriation under quarantine regulations or by reason of infringement of any customs or trading regulations.

The High Court held that "infringement of customs regulations" in the exclusion does not include an "infringement" which is itself no more than the manifestation of the relevant act of third parties acting maliciously and the exclusion is subject to that limitation, equally applicable on the facts of this case as in the cases of the various "put-up jobs".
Atlasnavios - Navegacao, LDA v Navigators Insurance Company Ltd & Ors [2014] EWHC 4133 (Comm).

notecheck32.png BIMCO Electronic Bills of Lading Clause.

This clause addresses existing problem that restrict usage of electronic bills of lading as a consequence of English law requirements to issue paper documents. Statutory, by way the Carriage of Goods by Sea Act 1992 (COSGA 1992) the law deals with paper documents only. Moreover the common law requires master to deliver the cargo only against signed bill of lading.

Clause proposes to circumvent these difficulties by exercising an option available to the charterers to issue electronic bill of lading. …

Read more here.
notecheck32.png Supreme Court held that a bribe received by an agent is held by the agent on trust for his principal.

Agent owes a duty of undivided loyalty to the principal, unless the latter has given his informed consent to some less demanding standard of duty. The principal is thus entitled to the entire benefit of the agent’s acts in the course of his agency, in just the same way as an employer is liable to bear the burden of an employee’s unauthorised breaches of duty in the course of his employment. The agent’s duty is to deliver up to his principal the benefit which he has obtained, and not simply to pay compensation for having obtained it in excess of his authority.
FHR European Ventures LLP & Ors v Cedar Capital Partners LLC [2014] UKSC 45 (16 July 2014)

notecheck32.png Court of Appeal disagreed on whether customer name is irrelevant for the purpose of CHAPS payment.

Appellant had an obligation to pay one of its suppliers the sum of £217,781.57. It appears that someone purporting to represent suppliers had spoken to someone at appellant’s office and supplied banking details (sort code, account number and bank name). Appellant provided the relevant mandatory details: sort code, bank name, account number and customer name,thinking that those data are of its supplier, but in fact a name of account number holder was not appellant supplier’s name. Appellant telephoned the bank, but money had been already withdrawn.
Tidal Energy Ltd v Bank of Scotland Plc [2014] EWCA Civ 1107 (31 July 2014).

notecheck32.png 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 [2014] EWHC 2013 (Comm)

notecheck32.png 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 [2014] EWHC 1629 (Comm).

notecheck32.png 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. [2014] EWCA Civ 403.

notecheck32.png 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) [2014] 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 [2014] EWHC 129 (Comm)

notecheck32.png Does In-Transit Loss (ITL) clause cover cargo stolen by pirates?

In Trafigura Beheer BV v Navigazione Montanari Spa [2014] 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 [2014] EWHC 129 (Comm)

notecheck32.png The contract price/market price differential is not a computation of lost profit.

In Glencore Energy UK Ltd v Cirrus Oil Services Ltd [2014] 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 [2014] EWHC 87 (Comm)

notecheck32.png The Court of Appeal clarifies application of cl.15 of NYPE form The Athena [2013] 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

notecheck32.png The Court of Appeal dismissed Charterers’ appeal in ED & F Man Sugar Ltd v Unicargo Transportgesellschaft GmbH [2013] 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 [2004] 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 [2012] EWHC 2879 (Comm).

notecheck32.png 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.

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14 December 2014. HBC GmbH & Co KG v Huyton Inc (The Glory Sanye)[2014] EWHC 4176 (Comm)

Shipping – Voyage Charter – SYNACOMEX 2000 form – From Constanza to Djibouti – Vessel was unable to discharge because there were no receivers for the cargo in Djibouti – Discharge port was changed to Damietta on the Mediterranean coast – Pursuant to the terms of the head time charterparty (on amended NYPE form) the vessel was to be re-delivered at Port Said and so, regardless of any agreement between the disponent owners and charterers, the vessel would have had to pass through the Suez Canal in any event – Disponent owners claimed the costs of transiting the Suez Canal from their voyage charterers as an expense arising from the charterers’ failure to discharge the cargo at Djibouti.

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30 November 2014. Law of Contract. Liability for Breach.

Standard of duty: i) when liability for breach of contract is strict, and ii) when it is based on fault in the sense of want of care, diligence or honesty.
Strict contract: when it is, in general, immaterial why the defendant failed to fulfil his obligation, and certainly no defence to plead that he had done his best.
Duty to exercise due care: this standard of duty limits person’s undertaking in performing his services to one of exercising of reasonable care and skill.
When failure is not a breach: unilateral contract, counter-promises, frustration and force majeure.

28 November 2014. Updated Off-hire due to marine growth.

Charterers deducted from hire sums due, in their opinion, for underperformance and overconsumption. The vessel in question was the subject of two consecutive time charters on the NYPE 46 form for one time charter trip under each, with the second charter being in direct continuation of the first.

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25 November 2014. Effect of Breach.

Every breach of contract gives right to injured party to claim either damages or the agreed sum or specific performance or an injunction. Another important remedy, which under certain circumstances is available to innocent side, is termination of contract. While sometimes the innocent party may be entitled to more than one of these remedies: e.g. to an injunction and damages, but not every breach gives to the innocent party the right to terminate the contract.

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24 November 2014. Lifeboats Accidents.

The crash of a rescue boat took place on the "MTM Westport" 147-meter-long chemical tanker registered in Hong Kong on 21 November 2014 in the North Sea off the Elbe estuary. As a result of boat fall from 11 metres high into the water a sailor killed and two others seriously injured. This was announced by the river police in Hamburg and the Society for Sea Rescue in Bremen.

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20 November 2014. Law of Contract. Breach.

It is not always easy to establish breach of contract, as for example in case of unilateral contract when promisor promises to pay promisee a sum of money if he, promisee, without any obligation, will do something or refrain from doing it. In such contracts promisee will not be in breach if he never attempts to perform, because he has not promise anything. But if he starts his performance then such act will bide promisor thereupon. Moreover, having begun his performance promisee might also be held to have impliedly promised to complete it, so the contract would become bilateral.

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17 November 2014. Pilotage. Personal liability of pilot. Command & Jurisdiction. Ship and liability of inanimate things.

Duty and liabilities of pilots were very important legal matters for our ancestors who valued safety of their sea trade so high as to provide in laws of Oleron, art. 25, that "[I]f a pilot undertook to answer for the piloting on his head, and afterwards lost, or even perilled the ship, the seamen or merchant might strike off his head without being liable to any punishment" but, added the law, "before he is killed it is expedient to ascertain that he has not wherewithal to pay".

Legal liabilities of any person are usually governed by that jurisdiction under which his act or fault has been committed and depends on degree of personal undertaking. For example while English courts of the nineteenth century considered pilots wholly responsible for any loss or damage occasioned by their fault or incapacity at the time pilots were conducting compulsory pilotage, their American colleagues held that it was the ship to be prosecuted because an offence resulted from pilot’s mistake was committed by the vessel (See Personal liability of pilot). Therefore it well can be that in two different countries (jurisdictions) same misconduct in one case may and in another may not attach legal liabilities.

Ancient law considered man responsible for his own wrongs and for crimes or damages caused by his slaves. When his horse or cattle injured or damaged someone or someone’s property that horse and cattle was subject to forfeiture to the benefit of injured person. The owner himself had no blame . Similar rule was applicable to inanimate things. For example in Edward the First’s (King of England from 1272 to 1307) time some of the rules were close to barbarian laws at their rudest stage. If a man fell from a tree and was injured or died, the tree was to be punished and it was called deodand. In books we can find the following definition to deodand:

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31 October 2014. Law of Contract.

An agreement is the consent of two or more persons to form some engagement, or to rescind or modify and engagement already made. Dusrum vel plurium in idem placitum consensus. That kind of agreement, the object of which is the formation of an engagement, is called a contract.
A treatise on the law of obligations or contracts, M. Pothier, vol.1, 1806.

English law has no formal definition of the contract. In the absence of a Code it has not needed one, moreover any such definition is not a part of the law itself. Very generally it can be said that by the contract is usually understood a commercial agreement, which gives rise to obligations enforced and recognised by law.

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12 October 2014. Collision between Paula C and Darya Gayatri in Dover Strait.

Collision between Paula C and Darya Gayatri took place in Dover Strait TSS on 10 of December 2013. OOW on Paula C interpreted Dover Coast Guard question about "three sixty" turn as a suggestion, which he immediately adopted as solution to the collision avoidance problem. He put wheel hard to starboard and vessel started quickly approach Darya Gayatri, which in its turn just started her course alteration to port. In few moments vessels collided. This case study vividly illustrates how easy one "marker" word can break human line of thoughts and unintentionally prompt targeted person to catastrophic action.

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08 October 2014. Approval clause in voyage charters.

Approval clauses in voyage charters impose similar duty on the owner as their analogues in time charter forms, namely, that the vessel has obtained a certain level of tradability as reflected by majors’ screening process. For obvious reasons time charterers insist on such level of tradability to be kept throughout the duration of charterparty and necessary measures are to be undertaken when major or majors reject vessel for his or their businesses. This state of things is not always mirrored exactly in voyage charters, where owners’ warranty as to "approvals" may not necessary be a continuous one. Nowadays charterers and owners agree the terms of the charterparty by way of a fixture recap e-mails and such recap is considered to have an individual legal value, independent from incorporated charterers’ rider clauses and terms to which it refers.

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06 October 2014. Updated: Berth and Port Charters.

Traditionally risks for delays in getting into the berth were apportioned between the owner and the charterer in a way that all risk as to navigation, weather and alike were rested upon the owner and those as to congestion in the port or non-availability of the berth were on the charterer since it is him who determines the ports of loading and discharge, but some of these liabilities are usually transferred back to another party by way of exceptions. Thus under a berth charter, all risks for delay in getting into the berth are borne by the shipowner until the vessel arrives at the berth, even where the delay is caused by congestion and under a port charter, by contrast, all delay risks in getting into berth, once the vessel has arrived at the port, are borne by the charterer, even where the delay is caused by weather, or a navigation risk, which otherwise shipowner would bear.

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02 October 2014. Updated: Charterer’s obligation to load and discharge.

At common law the obligation to load, stow and discharge the cargo rests solely on the shipowner, but due to the fact that the loading is a particular operation in which both parties have to concur, the shipowner’s duty does not begin until the goods are under his charge.

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02 October 2014. Updated: Charterer’s obligation to provide cargo.

In absence of express stipulations the charterer is under an absolute obligation to provide cargo according to the charterparty, which duty forms the basis of the shipowner’s right to earn freight.

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02 October 2014. Updated: Voyage Charters.Charterer’s obligation to nominate port.

The charterer should nominate port of loading and discharging and this nomination is in no way limited by any consideration of the shipowner’s convenience or expense which would be incurred in complying with this nomination. Port nomination is, however, subject to safe port/berth warranty.

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30 September 2014. Voyage Charters. Charterers’ Obligations

There are 3 main duties which charterers ought to perform under a voyage charter:

1. To nominate port of loading and discharging;

2. To provide the goods for loading and

3. To load and later to discharge the goods at the discharging port.

Breach of any of these obligations, unless it is of frustrating nature, does not give right to the shipowner to rescind the charter, so he can only sue for damages.If, however, by words or conduct the charterer professes inability to perform the charter, it will be sufficient to constitute an anticipatory breach, which if accepted by shipowner, will bring the contract to an end. When the shipowner choses to rescind charter it will be irrelevant whether or not the charterer was able to perform. The owner also has an option to affirm the contract but reserve his right for damages. In this case all rights and duties of parties under contract remain unchanged and parties obliged to fully perform contract. If the shipowner does not accept the refusal as final, the charterer can withdraw it at any time before expiration of the laydays and is entitled to begin loading.

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24 September 2014. Voyage Charters. Once on demurrage always on demurrage?

Liability for demurrage is absolute (see Liability for Breach), i.e. it does not depend on fault on the part of the charterer, nor on whatever the nature of the impediments met by the charterers. Thus, the underlying idea of "once on demurrage always on demurrage" concept is that demurrage, being a damages for continuing breach of contract, once started goes on until discharge is completed and the ship is once more available to the shipowner to use for other voyages. It is for the charterers therefore, when laydays become exceeded, to show some special reason why they should not be liable for the time spent in excess of laytime. Such special reason(s) interrupting demurrage can be only clear and unambiguous provision in charterparty or the owners’ fault.

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22 September 2014. Voyage Charters. Demurrage and Despatch.

Those are days beyond the lay day but during which the amount that he has to pay for the use of the ship is a fixed sum, necessarily what it costs the owner to keep his ship, but a fixed sum, which is usually about what it is supposed it costs the owner to keep the ship. This stipulation also is in favour of the charterer, because instead of being involved in a dispute as to what he would have to pay for days during which the ship is kept idle, a sum is fixed, and he knows what he has to pay if he keeps the ship beyond the lay days. Those are the "demurrage days".
Per Lord Esher in Nielsen v Wait (1885) 16 QBD 67 at pp.70-71

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22 September 2014. Voyage Charters. Laytime or demurrage interrupted due to owner’s fault.

Owners’ claim for demurrage is always subject to their compliance with an obligation to do nothing to prevent the vessel being available and at the disposal of the charterers for the purpose of completing the loading or discharging of the cargo.Therefore running of laytime or demurrage, as applicable, will be interrupted if due to the owners’ fault vessel was not available to the charterers either for loading or discharging operation. It is irrelevant that liability for the breach which flows from such fault is excluded by express provision in charterparty.

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01 September 2014. Voyage Charters. Laytime. Charterer’s duty to procure berth ‘reachable on arrival’.

Some recent arbitration cases show that "reachable on arrival" provision may well be used when vessel visit such ports as Lagos or Qingdao where waiting place is well outside of port limits, to deprive the charterers from the benefit of unused laytime.

On the other hand, as author of Commencement of Laytime points out, "reachable on arrival" provision is not necessarily to be considered so very favourable to the shipowners if exceptions are sufficiently clearly drafted as to suspend running of laytime or demurrage in instances when berth is not reachable on arrival.

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31 August 2014. Voyage Charters. ‘Reachable on arrival’ - The Laura Prima.

The effect of words in cl. 6 where delay is caused to Vessel getting into berth after giving notice of readiness for any reason over which Charterer has no control’ was held to give protection to the charterers only when they satisfied requirements of cl.9 which impose on them a duty to procure place reachable on arrival.

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30 August 2014. Voyage Charters. ‘Reachable on arrival’ - The President Brand.

… when breach occurred without fault from either side, the ultimate question is how does the charterparty provide for risk apportionment between the owner and charterer in case of such breach. He held that it was the Charterers’ obligation was to nominate a berth which the vessel could reach on arrival and they are in breach of that obligation if they are unable so to do.

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30 August 2014. Voyage Charters. ‘Reachable on arrival’ - The Angelos Lusis.

… on true construction of cl. 6 the vessel should arrive physically whether within or outside the commercial limits of the port, but be so positioned that nomination of a particular loading place would become relevant if the vessel is to proceed directly to the berth. When the owner brought the vessel to such position, the charterers become obliged to indicate reachable place which she would be able to reach and occupy. Under the reachable place Megaw J apparently meant a vacant berth since delay in berthing was caused by congestion in port.

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26 August 2014. Voyage Charters. Laytime. The Johanna Oldendorff & The Maratha Envoy.

In E.L. Oldendorff & Co GmbH v Tradax Export SA (The Johanna Oldendorff) [1973] 3 All ER 148 the charterers, instructed The Johanna Oldendorff to proceed 'to the port of Liverpool/Birkenhead to discharge'. When she arrived at Mersey Bar anchorage at 17.00 hours on 2 January 1968, no berth was nominated by charterers, therefore vessel anchored there and the next day proceeded to Princes Pier landing stage, Liverpool, and cleared with the customs. She was then ordered by the port authority to leave and proceed to anchor at the Bar light vessel. The vessel lay at anchor at the Bar from 3rd to 20 January ready, so far as she was concerned, to discharge. Owners claimed demurrage on the footing that that The Johanna Oldendorff became an arrived ship when she anchored at the Bar anchorage because that is within the port of Liverpool. In reply charterers argued that anchorage is at least 17 miles from the dock area, or commercial area of the port, that arrival at that anchorage is not arrival at the port of Liverpool/Birkenhead and that the ship did not arrive until she proceeded to her unloading berth in the Birkenhead docks.

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25 August 2014. Voyage Charters. Laytime. WIPON/WIBON.

As it can be seen from decisions in both The Johanna Oldendorff and The Maratha Envoy usual waiting place shall be within port, however, parties can and often do provide for an option that in case of congestion inside the port or in case the berth is occupied on arrival vessel can tender NOR "at the usual waiting place, whether in berth or not, whether in port or not". By introducing a "whether in port or not" clause, the owner, when in doubt about the port limits and boundaries of customary waiting places, is given some flexibility and his tender of notice of readiness will be effective with greater degree of certainness.

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16 August 2014. Voyage Charters. Laytime. Arrived Ship. Destination point.

If charterparty in question is a berth charter, then the owner fulfils his duty as to ‘arrived ship’ only when his vessel gets alongside the berth. Any notice sent before this moment is premature and invalid and will remaining invalid unless another one tendered from the berth (read more Premature and Invalid NOR).

By contrast, position under a port charter was a matter of many controversies until the end of the last century. Whereas decision of the Court of Appeal in The Leonis was considered to firmly lay down general principles which must be followed, the difficulty has been to find out what those principles are. The essence of legal polemics was concentrated on efforts to define port limits as combination of geographical, legal and administrative limits. The task was very difficult in view of unprecedented expansion of limits of many ports prompted by rapid growth in size and number of ships after the end of WW II . The problem was vividly highlighted by discussions and decision of the House of Lords in The Aello [1960] 2 All ER 578.

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15 August 2014. Voyage Charters. NOR and Laycan

Situation when vessel arrives within laycan does not require any additional elaboration. If, however, the vessel arrives earlier than the first date of laycan, then the question whether she may, should or should not tender an NOR will depend on the wording of charter in question.

BPVOY4 in para 6.2 says that NOR shall not be tendered, nor shall the Vessel proceed to berth, prior to the Commencement Date without Charterers’ prior agreement in writing, while SHELLVOY5 and SHELLVOY6 in cl.13(1)(a) states that notice shall not be tendered before commencement of laydays without any qualification for Charterers’ consent.

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14 August 2014. Time Charters. Termination: Renunciation and Rescission

The charterers under a strict obligation to pay freight to the owners under a voyage charter. This obligation is not qualified by such external factors as financial difficulties, drop in freight rates, market conditions, etc. In such cases there is no doubt that the charterers are liable.

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12 August 2014. Time Charters. Condition of Vessel on Redelivery

Extent and validity of charterer’s duty to redeliver in the same good order as when delivered is rather difficult to assess, because all of a sudden at the end of charter period time charterers accrue liability which was the owners’ burden all the way through this period of time as a part of their duty to keep the ship in good order and condition during time charter. It is suggested therefore that under this type of clause the charterers incurs no liability as regards defects in the condition of the ship on redelivery unless those defects have arisen from their contractual default or resulted from last employment orders given by the charterers. This latter qualification related to charterers’ duty to redeliver vessel fully discharged and free of previous cargoes.

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10 August 2014. Time Charters. Date of Redelivery

Timely redelivery is not always a condition of a time charterparty, but may well be an 'intermediate' term since a short delay in redelivery will not justify the termination of the contract. When the charterers insist on their orders which, at the moment of performance, will apparently lead to late redelivery, they may find themselves in repudiatory breach shall they not replace that orders for a valid one, if in a result of compliance with such orders, the vessel would proceed on last voyage and consequently being redelivered late.

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6 August 2014.Tidal Energy Ltd v Bank of Scotland Plc [2014] EWCA Civ 1107 (31 July 2014)

Contract – CHAPS payment – Payment form includes box "Receiving (beneficiary) customer name" – Money sent to beneficiary customer account and sort code which did not match beneficiary name – Is the bank authorised to debit appelants’ account with the amount specified on the form?

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30 July 2014. Mate’s Receipt

Mate’s receipt is a document originally issued by the first mate of the ship (see photo), who is in charge for cargo operation. Then mate’s receipt or receipts collected by the shipper or his representative and later exchanged for a bill of lading, which should incorporate any qualifications or conditions inserted into the mate’s receipt. In modern practice, mate’s receipt, when exists, is usually signed by the representative of shipping company or its agents, who is responsible for loading and not by ship’s officer. Since all the business related to mate’s receipt is of some antiquity, I offer in this topic several illustrations of how it operated in its original mode on case law example from the nineteenth century: Schuster v M’Kellar (1857) 7 El. Bl. 704. It shows way of dealing with mate’s receipts and associated legal issues and liabilities.

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30 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.

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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.

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22 July 2014. Soufflet Negoce SA v Fedcominvest Europe Sarl [2014] 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?

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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.

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20 July 2014. Time Charters. Termination. 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).

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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.

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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.

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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.

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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.

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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.

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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.

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17 July 2014. Time Charters. Termination. Available options

In recent decision of the Commercial Court in Isabella Shipowner SA v Shagang Shipping Co Ltd (the Aquafaith) [2012] 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.)

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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".

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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 [2010] EWHC 280 (Comm) and Cosco Bulk Carrier Co Ltd & Anor v M/V Saldanha C/P dated 25/06/08 [2010] EWHC 1340 (Comm)

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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 [2014] 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?

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18 June 2014. Terminal Contenitori Porto Di Genova Spa v China Shipping Container Lines Ltd [2014] 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?

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11 June 2014. Falkonera Shipping Co v Arcadia Energy Pte Ltd (The Falkonera) [2014] 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?

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27 May 2014. Fulton Shipping Inc of Panama v Globalia Business Travel S.A.U. of Spain [2014] 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?

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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.

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14 May 2014. Lifeboats Accidents.

Recent accidents with reports and photos.

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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.

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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.

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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.

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10 May 2014. American Overseas Marine Corp v Golar Commodities Ltd (The LNG Gemini) [2014] 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?

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7 May 2014. Amended Safe Port Warranty - Named port or ports.

The owners shall be aware that in absence of safe berth/port warranty they have to satisfy themselves not only that anticipated berth or port is safe for vessel to reach and remain, but also that their vessel is fully fitted for that berth and/or port.

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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.

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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) [2003] EWHC 46 (Comm).

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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.

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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 [1993] 1 Lloyd’s Rep 63 and especially in The Liepaya [1999] 1 Lloyd’s Rep 649.

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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.

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24 April 2014. Added Laytime & Demurrage in sale contract - indemnity or independent provision?

There are two conflicting constructions said to be able to achieve the commercial purpose of the laytime and demurrage clause in the contract of sale: a) provisions operating as an indemnity and b) independent provisions. The difference between these two approaches is …

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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) [1971] 2 Lloyd’s Rep 200 at p.206.

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30 March 2014. Geden Operations Ltd v Dry Bulk Handy Holdings Inc (The Bulk Uruguay) [2014] 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.

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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) [1998] 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.
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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.

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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.

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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 [1896] 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.
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19 March 2014. Amended Safe Port. As near thereto as she can safely get.

Have a look at amended sub-chapters: Geographical limits; Politically unsafe; Dahl v Nelson.

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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.

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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.

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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.

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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 [1954] 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.

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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) [1980] 2 Lloyd’s Rep 95; Atkins International HA v Islamic Republic of Iran Shipping Lines (The APJ Priti) [1987] 2 Lloyd’s Rep 37; Ullises Shipping Corporation v Fal Shipping Co Ltd (The Greek Fighter) [2006] EWHC 172 (Comm); AIC v Marine Pilot Ltd (The Archimidis) [2008] EWCA Civ 175; The Ahos I [2013] US11-2576.

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17 February 2014. Added Omv Supply And Trading AG v Kazmunaygaz Trading AG (Rev 1) [2014] 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.

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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 …

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16 February 2014. COLREGS Rule 19. The tragedy of Sun Cross

In recent collision case M.V. Sun Cross v M.V.Rickmers Genoa [2010] 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.

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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.

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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.

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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.…

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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 [1982] 2 Lloyd’s Rep 205, at p.209 as notoriously difficult in the bulk carriage of oil …

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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 …

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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 …

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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) [1982] 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. …

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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. …

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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. …

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27 January 2014. Glencore Energy UK Ltd v Cirrus Oil Services Ltd [2014] 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)

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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.

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26 January 2014. Lifeboats Safety.

See shocking video on reckless way of conducting rescue boat drill underway!

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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?

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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 …

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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 …

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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.

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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) [2010] EWHC 2617 (Comm)

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11 January 2014. Galaxy Energy International Ltd v Murco Petroleum Ltd [2013] EWHC 3720 (Comm)

Sale Contracts – Laytime – Delay in loading – Whether buyers agreed on extension of period of delivery – Market price.

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11 January 2014. ED & F Man Sugar Ltd v Unicargo Transportgesellschaft GmbH [2013] 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.

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  • Letters of Protest. User’s Manual.

    Any master knows what letter of protest is or, at the very least, supposed to know when such letter shall be issued. Generally, there is no any restriction to issue a letter of protest, rather the contrary, master usually encouraged and sometimes instructed to serve letter of protest whenever he thinks necessary.

    It can be noted in passing, that letters of protest is not a modern invention and was known long since. Already in the eighteenth century master’s protest was treated only as a paper containing the account of the loss given by the captain. Sixty years later the following definition of a marine protest and protests in general, one could meet in old text books on English shipping law.

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  • Laycan

    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.

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  • NOR and Laycan

    There is abundant authority for saying that the courts always insisted on strict compliance with stipulations as to the time in the contracts of affreightment. In the eighteenth century case of Croockewit v Fletcher (1857) 1 H & N 893 it was held that the stipulation as to the time "is the condition precedent upon the performance of which the defendant contracted to take and load the ship". In more modern case law on this proposition - Evera SA Commercial v North Shipping Co Ltd [1956] 2 Lloyd’s Rep 367, Devlin J outlined commercial background of charterer’s, expectations to have vessel ready for his cargo by a certain date or range:"A charterer manifestly wants, if he can get it, a fixed date for the arrival of the ship at the port of loading."

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  • Bill of Lading

    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.

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  • Laycan

    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.

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  • Off-hire

    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.

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… 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 337

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