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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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Monday, 28 September 20
NEW LNG PROJECTS - ALL DRESSED UP AND NO PLACE TO GO - WOOD MACKENZIE
It was meant to be another boom year. After a record 70 mmtpa of new LNG capacity was sanctioned in 2019, at least as much capacity was lined up fo ...
Thursday, 24 September 20
SUPRAMAX: INDO TO INDIA FIXING AROUND US$13,000 - FEARNLEYS
Cape
Over the last week the iron ore segment from Brazil to China has picked up, and we see freight rates up USD 2 (12%) week on week Fearnleys ...
Thursday, 24 September 20
KOREA MIDLAND POWER TO BUY 1.92 MILLION TONS OF 4,300-4,700 NCV COAL FOR THREE YEARS
COALspot.com: Korea Midland Power Co. Ltd, has issued an International tender for 640,000 MT 4,300-4,700 kcal/kg NCV coal per year.
...
Wednesday, 23 September 20
VIETNAM'S NEW POWER DEVELOPMENT PLAN MUST OPTIMIZE RENEWABLES AND AVOID FOSSIL FUEL LOCK-IN: IEEFA
EVN’s financial constraints leaves the utility with little room for error
Implementing Vietnam’s soon-to-be-launched next Power De ...
Wednesday, 23 September 20
MARKET INSIGHT - INTERMODAL
Undoubtedly, this year (ongoing) will never be forgotten because in a matter of months it has managed to severely affect and shape our day to day p ...
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- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- The University of Queensland
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- PTC India Limited - India
- Mintek Dendrill Indonesia
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Economic Council, Georgia
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Coal and Oil Company - UAE
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Marubeni Corporation - India
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- Kumho Petrochemical, South Korea
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- Jindal Steel & Power Ltd - India
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- Central Java Power - Indonesia
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Global Green Power PLC Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- Independent Power Producers Association of India
- Bhushan Steel Limited - India
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Coalindo Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- Riau Bara Harum - Indonesia
- Straits Asia Resources Limited - Singapore
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- Krishnapatnam Port Company Ltd. - India
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Power Finance Corporation Ltd., India
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- Videocon Industries ltd - India
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
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