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Sunday, 07 April 19
SHIP PASSAGE PLANS - NO ROOM FOR ERROR! - WATSON FARLEY & WILLIAMS
 KNOWLEDGE TO ELEVATE
The English High Court’s judgment in Alize 1954 v Allianz Elementar Versicherungs AG (The CMA CGM Libra) is an important decision involving the application of longstanding principles as to a shipowner’s liability for actionable fault following a casualty. In finding that a defective passage plan rendered a vessel unseaworthy, the English High Court has demonstrated how traditional tests will be applied to update the law into the modern day world.
Prior to this decision, there had been no case whereby a defective passage plan rendered a vessel unseaworthy. However, it is now clear that just as the standard of seaworthiness must rise with improved knowledge of shipbuilding, so must the standard of seaworthiness rise with improved knowledge of the documents required to be prepared to ensure safe navigation. Following the IMO’s recognition in 1999 of the need for passage planning to be adopted by “all ships engaged on international voyages”, The CMA CGM Libra shows that by 2011 the English courts expected an adequate passage plan to have been prepared. If it was defective, the consequences could be severe.
The Case
The case concerned a laden container vessel which grounded by virtue of the master negligently navigating outside of the buoyed fairway when leaving the port of Xiamen in China. The owner had known this to be a difficult port to navigate, especially as various Notices to Mariners had been issued advising that areas existed in the Xiamen Gang (though not in the fairway) that had depths less than those charted.
Cargo interests refused to pay the owner their proportion of the total claim in general average and denied liability under Article III r.1 of the Hague Rules on the basis that the casualty was caused by the owner’s actionable fault. In particular, they alleged that the vessel was unseaworthy because she had an inadequate passage plan, that inadequacy was a cause of the casualty and due diligence was not exercised by the owner to make the vessel seaworthy.
The Decision
Before considering the substantive matters of unseaworthiness, causation and due diligence, Mr Justice Teare addressed the issue of which party bears the burden of proof in relation to Article III r.1. He affirmed the conventional view that the burden lies on the cargo interests to establish that the vessel was unseaworthy and such unseaworthiness caused the grounding. If those matters are established, the burden then lies on the owners to prove that due diligence was exercised to make the vessel seaworthy.
Unseaworthiness
Mr Justice Teare held that neither the formal passage plan, nor the working chart, contained the necessary warning of the potential danger arising outside the buoyed fairway from the existence of areas with lower depths than charted. The necessary warning should have been such that, when the navigator was faced with a decision whether to remain in the buoyed fairway or to navigate outside, he had in mind the warning that charted depths outside the buoyed fairway may be unreliable.
The judge affirmed that the long-established and authoritative test of unseaworthiness is whether a prudent owner would have required the relevant defect, had he known of it, to be made good before sending his ship to sea. He found it inconceivable that a prudent owner would allow the vessel to depart from Xiamen with a passage plan that lacked the necessary warning, especially given that IMO Resolution of 1999 states that a “well planned voyage” is of “essential importance for safety of life at sea, safety of navigation and protection of the marine environment”.
The owner argued that passage planning is simply the preparation for safe navigation and is not itself an aspect of seaworthiness. In making these arguments, the owner sought to benefit from the negligent navigation exception under Article IV r.2(a) of the Hague Rules, which provides that (assuming there is no failure by the owners to make the vessel seaworthy) a shipowner will not be responsible for loss caused by neglect in the “navigation or in the management of the ship”.
However, Mr Justice Teare rejected this, stating that seaworthiness extends to having the appropriate documentation on board, including the appropriate charts. Firstly, he noted that Article III r.1 places a seaworthiness obligation upon the shipowner “before and at the beginning of the voyage” and that passage planning before the beginning of the voyage is necessary for safe navigation during voyage. Secondly, he pointed out that it is well recognised that if a vessel’s charts are not up to date that is an “attribute” of the vessel which can render her unseaworthy – and that a proper passage plan is now like an up to date and properly corrected chart.
Mr Justice Teare also suggested that a “one-off” failure to correct a chart in a material manner before the beginning of the voyage is capable of rendering a vessel unseaworthy, even if the shipowner has put in place proper systems to ensure that the prerequisite materials were on board to prepare an adequate chart. He explained that concentrating upon the shipowner’s own actions to the exclusion of those of his servants or agents, confuses the issue of seaworthiness with the issue of due diligence, which in any event is a non-delegable duty.
Finally, Mr Justice Teare observed that the negligent navigation exception applied only to Article III r.2 and not Article III r.1. Therefore, a shipowner will not be protected from liability for failing to exercise due diligence to make the vessel seaworthy by the fact that a cause of the casualty was negligent navigation.
Conclusion
In conclusion, this case found that an appropriate passage plan is a matter of seaworthiness under Article III r.1 of the Hague Rules. This is not the type of chart that might traditionally have been expected to affect the seaworthiness of a vessel, especially as a passage plan relates principally to navigation of the ship. Nevertheless, following this judgment, shipowners will have to ensure that, through its agents and servants, due diligence is exercised to produce a non-defective passage plan that clearly contains the necessary warnings. Failure to do so, if causative of a casualty, will not be saved by the negligent navigation exception under Article IV r 2(a) of the Hague Rules, which cannot be applied where a shipowner has failed to exercise due diligence to make the vessel seaworthy.
Source: Watson Farley & Williams
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Friday, 08 March 19
KOMIPO INVITES BIDS FOR 2.6 MILLION TONS OF AUSTRALIAN 5700 NAR COAL FOR FIVE YEARS
South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 520,000 MT of min. 5700 NAR coal of Australian origin to be burnt ...
Friday, 08 March 19
CHINA'S COAL DEMAND FORECAST TO DROP SLOWLY - YONHAP
China’s coal demand is expected to fall at a snail’s pace over the next 20 years due to the country’s preference for the cheap fo ...
Thursday, 07 March 19
INDONESIAN COAL PRICE REFERENCE PLUNGE TO LOWEST IN SEVEN MONTHS
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 06 March 19
KOSPO INVITES BIDS FOR 80,000 MT OF 3800 NCV COAL FOR 21 - 30 MARCH, 2019 LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 80,000 MT of min 3,800 kcal/kg NCV low calor ...
Wednesday, 06 March 19
KOREA SOUTHERN POWER CO INVITES BIDS FOR 980,000 MT OF 4600 NCV COAL FOR THREE YEARS
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 4,600 kcal/kg NCV low calo ...
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- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- Bhatia International Limited - India
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- White Energy Company Limited
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- Australian Coal Association
- Posco Energy - South Korea
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Altura Mining Limited, Indonesia
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Toyota Tsusho Corporation, Japan
- MS Steel International - UAE
- The University of Queensland
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- VISA Power Limited - India
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- Kapuas Tunggal Persada - Indonesia
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- Parry Sugars Refinery, India
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- Orica Mining Services - Indonesia
- Renaissance Capital - South Africa
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Sojitz Corporation - Japan
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- India Bulls Power Limited - India
- Planning Commission, India
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Wilmar Investment Holdings
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- Karaikal Port Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Kaltim Prima Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Indonesian Coal Mining Association
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
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