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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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Friday, 14 August 20
EIA: COAL PLANTS UNECONOMICAL IN MOST REGIONS - IEEFA
U.S. coal power generation plunged by 30 percent in the first half of 2020 off an already-depressed base, shoved out by natural gas and renewables ...
Thursday, 13 August 20
INDIA SHOULD RECORD A SLIGHT DECREASE IN THERMAL COAL IMPORTS, REACHING A VOLUME OF 167 MILLION TONS BY THE END OF 2020 - ASSOCARBONI
Regarding 2020 thermal coal imports forecasts, Vietnam’s coal imports showed a very strong growth in the first half of 2020 and it is believe ...
Thursday, 13 August 20
INDONESIA REMAINS THE LARGEST EXPORTER OF COAL IN THE WORLD - ASSOCARBONI
According to the last Assocarboni data for 2019, Indonesia remains the largest exporter in the world. Thermal coal exports have in fact reached 456 ...
Wednesday, 12 August 20
VIETNAM WAS THE PROTAGONIST OF A SIGNIFICANT INCREASE IN COAL IMPORTS IN 2019 - ASSOCARBONI
The latest Assocarboni data for 2019 also provide a detailed picture on the trend of the global coal import.
According to Assocarbon ...
Wednesday, 12 August 20
THE COAL MARKET IN ITALY - ASSOCARBONI
Italy, which in 2019 reported a decrease in thermal coal imports, with a volume of 7,5 million tons (-32% compared to 11 million tons in 2018), whi ...
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- Pipit Mutiara Jaya. PT, Indonesia
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Power Finance Corporation Ltd., India
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- GAC Shipping (India) Pvt Ltd
- Energy Development Corp, Philippines
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Indonesian Coal Mining Association
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Madhucon Powers Ltd - India
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- ICICI Bank Limited - India
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Makarim & Taira - Indonesia
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- Planning Commission, India
- Independent Power Producers Association of India
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Antam Resourcindo - Indonesia
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- White Energy Company Limited
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- The University of Queensland
- MS Steel International - UAE
- Orica Mining Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mercator Lines Limited - India
- Uttam Galva Steels Limited - India
- TeaM Sual Corporation - Philippines
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Ministry of Mines - Canada
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- GMR Energy Limited - India
- Globalindo Alam Lestari - Indonesia
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Kepco SPC Power Corporation, Philippines
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aboitiz Power Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- Central Electricity Authority - India
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Mintek Dendrill Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Global Coal Blending Company Limited - Australia
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- Economic Council, Georgia
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