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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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Saturday, 29 August 20
COAL INDIA'S FUEL SUPPLY TO POWER SECTOR DROPS ABOUT 20% IN APR-JUL: PTI
State-owned Coal India”s fuel supply to the power sector registered a decline of 19.5 per cent to 126.30 million tonnes (MT) in the April-Jul ...
Saturday, 29 August 20
SOUTH KOREAN BROKERAGE FIRM KOREA INVESTMENT & SECURITIES TO STOP ALL COAL BUSINESS - KOREA HERALD
South Korean brokerage firm Korea Investment & Securities has decided to stop its investments in coal, in line with the Moon Jae-in administrat ...
Thursday, 27 August 20
KOREAN GENCOS INVITED BIDS FOR TOTAL 985,000 TONS OF BITUMINOUS COAL FOR NOVEMBER 2020 LOADING
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) on behalf of EWP, KOSPO, KOSEP and KOWEPO has issued an international tender for total 985,000 ...
Thursday, 27 August 20
SOUTHEAST ASIAN NATIONS SET REGION-WIDE RENEWABLE ENERGY GOAL OF 23 PERCENT BY 2025 - ASEAN POST
The Association of Southeast Asian Nations (ASEAN) has set an ambitious target of securing 23 percent of its primary energy from renewable so ...
Thursday, 27 August 20
BANGLADESH POWER MINISTRY SEEKING AUTHORITY TO CANCEL 13,000 MW OF PROPOSED COAL-FIRED CAPACITY - BUSINESS STANDARD
In a bid to move away from dirty energy, the Ministry of Power, Energy and Mineral Resources is seeking the prime minister’s approval to conv ...
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- Alfred C Toepfer International GmbH - Germany
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- McConnell Dowell - Australia
- Marubeni Corporation - India
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- MS Steel International - UAE
- Ministry of Transport, Egypt
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- Indika Energy - Indonesia
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- Ind-Barath Power Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Petron Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ambuja Cements Ltd - India
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Australian Coal Association
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Trasteel International SA, Italy
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- PTC India Limited - India
- Mjunction Services Limited - India
- Toyota Tsusho Corporation, Japan
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Thai Mozambique Logistica
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- India Bulls Power Limited - India
- Metalloyd Limited - United Kingdom
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- Bhatia International Limited - India
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Kobexindo Tractors - Indoneisa
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- The University of Queensland
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Parliament of New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Independent Power Producers Association of India
- Leighton Contractors Pty Ltd - Australia
- Mercator Lines Limited - India
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- GMR Energy Limited - India
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- Essar Steel Hazira Ltd - India
- Intertek Mineral Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement PLC, Thailand
- White Energy Company Limited
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