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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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Wednesday, 06 March 19
SHIPPING MARKET INSIGHT - INERMODAL
In a downward moving market, softer SnP activity is usually a given, as the gap between Sellers’ and Buyers’ ideas widens, especially w ...
Saturday, 02 March 19
A 60,500-TONNER WAS BOOKED DELIVERY SINGAPORE, VIA INDONESIA, REDELIVERY WEST COAST INDIA, AT $11,250 - BALTIC BRIEFING
Capesize
Vale’s ongoing absence from the Brazil spot market continued to have a negative impact on sentiment, with rates falling in all a ...
Thursday, 28 February 19
COAL'S PERFECT STORM HITS $70 BILLION AUSTRALIAN PROJECTS - BLOOMBERG
It’s been a tough few weeks for our coal industry.
First there was a court ruling blocking a new mine on climate change ground ...
Wednesday, 27 February 19
SHIPPING MARKET INSIGHT - INTERMODAL
With the IMO 2020 approaching, it becomes challenging for the market to accurately explore the run-up to the deadline given that marine fuel-oil of ...
Tuesday, 26 February 19
CHINA RESTRICTS SEABORNE COAL IMPORTS - WOOD MACKENZIE
In response to news on China's Dalian port restricting seaborne coal imports, Wood Mackenzie's experts provide the following commentary.
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- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- Kumho Petrochemical, South Korea
- Economic Council, Georgia
- Siam City Cement - Thailand
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Central Java Power - Indonesia
- Central Electricity Authority - India
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Karaikal Port Pvt Ltd - India
- The University of Queensland
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- Aditya Birla Group - India
- McConnell Dowell - Australia
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- IHS Mccloskey Coal Group - USA
- ICICI Bank Limited - India
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Planning Commission, India
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- Vedanta Resources Plc - India
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- The Treasury - Australian Government
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Leighton Contractors Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- Indian Energy Exchange, India
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- Ministry of Transport, Egypt
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- London Commodity Brokers - England
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- White Energy Company Limited
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Xindia Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Deloitte Consulting - India
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
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