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Monday, 31 August 20
DEFECTIVE PASSAGE PLANNING: UNSEAWORTHINESS OR A NAVIGATIONAL DECISION? THE CMA CGM LIBRA QUESTION SAILS ON TO THE UK SUPREME COURT - GARD
 KNOWLEDGE TO ELEVATE
The UK Supreme Court has granted leave to appeal the recent decision in Alize 1954 v Allianz Elementar Versicherungs AG (The “CMA CGM LIBRA”). While the decision involved General Average, we discuss the ramifications of the finding of unseaworthiness as it applies to the allocation of risk and liabilities in the wider context of the marine transport of goods.
International law aims to apportion risk in the transport of goods between the ship interests and cargo interests. Simply put, shipowners are responsible for cargo claims caused by unseaworthiness of the ship but are exempt from liability for cargo claims caused by certain risks, including navigational errors. The decision in Alize 1954 v Allianz Elementar Versicherungs AG (The “CMA CGM LIBRA”) [2020] EWCA Civ 293 shifts the established boundary between what is considered “seaworthiness” and “navigation” resulting in shipowners bearing a greater portion of the risk of the adventure. While the CMA CGM LIBRA case involved General Average, it comes as no surprise that decision led to an increase in claims by cargo interests alleging unseaworthiness on the basis of navigational decisions. The vessel owners recently obtained permission to appeal the decision to the UK Supreme Court and the International Group of P&I Clubs supports the vessel owners’ position.
Background to the case
On 17 May 2011, M/V “CMA CGM LIBRA”, a 6,000 TEU container ship, grounded while leaving the port of Xiamen, China. The ship’s charts had failed to record a warning derived from a Notice to Mariners that depths shown on the chart outside the fairway were unreliable and waters were shallower than recorded on the chart. The grounding occurred when the master sailed the vessel outside of the fairway, expecting the waters to be deeper than they actually were. The owners claimed general average contributions from the cargo interests.
The first instance judgment
In Teare J’s first instance decision dated 8 March 2019, he held that the passage plan and working charts were defective due to the failure to record the warning required by the Notice to Mariners, and these defects rendered the vessel unseaworthy at the commencement of the voyage. The owners’ claims were therefore dismissed.
The first instance decision gave rise to significant controversy in maritime law circles. Some commentators held the view that the decision confused issues of unseaworthiness with issues of navigation. They argued that the preparation of passage plans is a matter of navigation, the neglect of which would entitle a carrier to defences under Article IV Rule 2(a) of the Hague or Hague-Visby Rules. By considering passage planning as falling within the orbit of seaworthiness rather than navigation, the court is disrupting the well-established division of risk between the ship and cargo. It has also been commented that applying a strictly temporal approach, i.e. that all acts or omissions prior to the commencement of the voyage relate to seaworthiness may have wider implication to re-distributing risk between the ship and cargo than the question of passage planning.
Other commentators saw the decision as a correct application of principles concerning a carrier’s duties in respect of seaworthiness, based on the traditional definition of seaworthiness laid down in McFadden v Blue Star Line (1905): “Would a prudent owner have required that [the relevant defect] should be made good before sending his ship to sea, had he known of it? If he would, the ship was not seaworthy.” On this view, given that no prudent shipowner would knowingly send his vessel to sea with a defective passage plan and defective charts that had not been properly updated, these commentators argued that it therefore follows that the vessel was not seaworthy at the commencement of the voyage.
The Court of Appeal decision
The first instance judgment was appealed, and for a time, it seemed that the controversy had been resolved following the handing down of the Court of Appeal’s judgment on 4 March 2020. In a unanimous decision by a 3-member panel of experienced shipping judges, the Court of Appeal upheld the first instance judgment. The Court confirmed that errors in navigation or management can render a vessel unseaworthy if they occur prior to the commencement of the voyage. The Court rejected the vessel owners’ argument that the passage plan and working chart were not “attributes of the ship”, but records of navigational decisions taken by the crew.
The Court also found that once the owners assumed responsibility for the cargo as the carrier, all acts of the master and crew in preparing the vessel for the voyage (even if they are acts of navigation performed before or at the commencement of the voyage) are performed qua carrier and not qua navigator. Thus, the owners are responsible for all such acts, and the crew’s failure to exercise due diligence to make the vessel seaworthy would be imputed to the owners.
Leave to appeal to the Supreme Court
In late July 2020, the owners obtained permission to appeal the Court of Appeal’s decision to the UK Supreme Court. The owners’ position remains that the crew’s decision as to what to mark on the chart was a navigational decision rather than an “attribute of the ship” and was therefore not an issue of seaworthiness. It is anticipated that the appeal will take place in late 2021.
Concluding comments
Given the importance of this case regarding the allocation of risk between ship and cargo in a maritime adventure, the International Group of P&I Clubs welcome the UK Supreme Court’s decision to hear the case, and has backed the application made seeking leave to appeal to the Supreme court. Gard will continue to provide updates on developments in this case as they unfold.
Source: Gard
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Wednesday, 07 October 20
U.S. COAL PRODUCTION TO DECREASE BY 26 PERCENT IN 2020 COMPARED TO 2019 - EIA
EIA expects total U.S. coal production in 2020 to be 525 million short tons (MMst), compared with 705 MMst in 2019, a 26% decrease.
COVID-19 a ...
Wednesday, 07 October 20
MARKET INSIGHT - INTERMODAL
The challenges brought forward in 2020 proved to be very different from what we could have ever imagined. Together with placing a significant strai ...
Tuesday, 06 October 20
KOSPO TO IMPORT 80,000 MT OF 3,800 NCV COAL FOR 2H NOV
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 80,000 MT Min.3800 kcal/kg NCV coal 2H November, 2020 l ...
Friday, 02 October 20
THE INDONESIA COAL PRICE REFERENCE RISE AFTER HISTORIC CRASH TO US$ 49.42
COALspot.com: The Indonesia Coal Price Reference for the month of October Rise to US$ 51.00 after historic crash to US$ 49.42 in September 2020.
...
Friday, 02 October 20
SRI LANKA MUST LEARN LESSONS FROM AROUND ASIA TO AVOID FURTHER ELECTRICITY CRISES - IEEFA
Overcommitment to fossil-fuelled power generation is leading to excess capacity and rising capacity payments, subsidies, and tariffs around the con ...
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- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Riau Bara Harum - Indonesia
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- Standard Chartered Bank - UAE
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
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- CIMB Investment Bank - Malaysia
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- Metalloyd Limited - United Kingdom
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- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
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- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
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- Kumho Petrochemical, South Korea
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- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Gujarat Sidhee Cement - India
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- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
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- Ministry of Finance - Indonesia
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- Kobexindo Tractors - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- Chamber of Mines of South Africa
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Sindya Power Generating Company Private Ltd
- Energy Link Ltd, New Zealand
- Mjunction Services Limited - India
- PTC India Limited - India
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- Directorate General of MIneral and Coal - Indonesia
- Grasim Industreis Ltd - India
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- MS Steel International - UAE
- Renaissance Capital - South Africa
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- GMR Energy Limited - India
- The University of Queensland
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Tamil Nadu electricity Board
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Coal and Oil Company - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- Wilmar Investment Holdings
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- Binh Thuan Hamico - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- VISA Power Limited - India
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- Bukit Makmur.PT - Indonesia
- Romanian Commodities Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- Aditya Birla Group - India
- London Commodity Brokers - England
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
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