In the early hours of Tuesday, 7 August 2018, and as foreshadowed by President Trump’s announcement on 8 May 2018, the United States reimposed certain secondary sanctions on Iran, being those which apply to non-U.S. persons. The imposition of these sanctions follows the conclusion of a 90-day wind-down period and, as mentioned in our previous blog post, will impact (among other things) trade in graphite, raw or semi-finished metals and the Iranian automotive sector. Importantly, the new Iran sanctions permit the U.S. government to impose sanctions on non-U.S. persons who provide significant support to those acting in violation of the sanctions. Note that a second wind-down period expires in early November, at which time further secondary sanctions will be reimposed, affecting, among other things, shipping, the petroleum and petrochemical industry, and insurance.

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Ship arrests in the UK – can an arresting party be required to give cross-undertakings in damages?

The law on ship arrest in England is well-entrenched. In essence, a party’s ability to arrest a ship in the UK occurs as of right. Accordingly, a shipowner will be unable to recover any compensation at all for wrongful arrest unless the arrest was obtained by mala fides (bad faith or malice) or crassa negligentia (gross negligence). This would also include whether a vessel owner is entitled to request that the arresting party provide a cross-undertaking in damages in the same form as that typically required in applications for freezing orders in the Commercial Court.  The recent decision in Natwest Markets plc v. Stallion Eight Shipping Co. S.A. [2018] EWHC 2033 (Admlty) confirms the Admiralty Court’s position that such undertakings are not applicable in vessel arrests. Continue Reading

No hindsight for implied terms

In Robert Bou-Simon v. BGC Brokers LP [2018] EWCA Civ 1525, the Court of Appeal considered deleted provisions and implied terms. Although in the context of an employment contract, the decision obviously has wider application.

The Court held that the judge at first instance had not properly applied the legal test for the implication of contractual terms, as established in Marks & Spencer Plc v. BNP Paribas Securities Services Trust Co (Jersey) Ltd [2016] AC 742.

It was emphasised that in such cases, it is important to:

  • Approach the matter of the implied term from the perspective of the reasonable reader of the contract, with an awareness of its provisions and the surrounding circumstances, at the time the contract was made, not at the time at which the dispute comes before the Court.
  • Consider the issue of implied terms only after the process of construing the express words of the contract has been completed.
  • Remember that it is not necessary to give business efficacy to a contract to imply a term to deal with circumstances which are not just omitted from the express terms but are outside the scope of the agreement altogether.
  • Exercise care when considering the question to pose to an official bystander when asking whether a term is so obvious as to be implied (this is reminiscent of the notice of redelivery cases, where, you will remember that, one of the problems was not being able to work out what term was to be implied).

The case will also be noted for considering the extent to which we should consider deleted provisions when seeking to imply terms, a distinction being drawn between what one can consider when construing written terms and what can be taken into account when considering whether a term should be implied.

LJ Singh said, albeit obiter, that he can see the force in the suggestion that “the consideration of deleted words may negative the implication of a term in the form of those deleted words”. He added that he does not necessarily accept that, in the context of implied terms, there is a threshold requirement that there must be an ambiguity in the contract before deleted words can be admissible.

Iran Sanctions – August Deadline

On 8 May 2018, President Trump announced that the United States would withdraw from the Joint Comprehensive Plan of Action (“JCPOA”). In conjunction with that announcement, the President issued a National Security Presidential Memorandum (“NSPM”) directing the re-imposition of certain secondary sanctions, being those that apply to non-US persons even where there is no US nexus. Depending on the economic sector targeted, the particular sanction will be imposed either 90 or 180 days after the President’s announcement (6 August and 5 November, respectively).

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Good News in Store for Hong Kong’s Maritime Industry in the Second Half of 2018

On 1 July 2018, Hong Kong celebrated the 21st anniversary of the end of British colonial rule and its return to the Motherland’s embrace.

1 July also marks the beginning of the second half of the year.  If Year 2018 were a soccer match, the players are now back on the field, feeling refreshed after the halftime break, and ready to kick-off the second half of the match.

For Hong Kong’s maritime industry, the game has so far been tough, just like last year, and the year before that.  Team Hong Kong has been playing on defence mode, struggling to hold its ground against strong rivals like Singapore and Shanghai.  With this comes the city’s realization that laissez faire, the style of governance that had once been a source of pride, may have passed its heyday.

With a bit of luck, though, and barring any contingencies with the US-China trade war, the second half of 2018 may see the tide turn for Hong Kong and its maritime industry, for there is good news to come. Continue Reading

Update on recent developments in the Shipping Industry

For an update on recent developments in the Shipping Industry, click here to listen to our recent webinar.

During the webinar, we cover some of the key shipping cases in the last 6 months. We also take a look at electronic bills of lading including how they work, common benefits and pitfalls, as well as considering how they could operate in the future.

  1. Recent developments in case law
  • Interclub agreement
  • US COGSA – “management of the ship”
  • Hague Rules package limitations and time bar provisions
  • Off-hire under Shelltime 4
  • No oral variation clauses
  • Entire agreement clauses
  1. Update on Electronic Bills of Lading
  • Current status
  • Benefits/Pitfalls
  • Future of electronic bills of lading

Iran Sanctions – Developments from the EU

As discussed in our blog post of 21 May 2018, the EU has reaffirmed its commitment to the Joint Comprehensive Plan Of Action in the wake of the US’ announcement that it would be withdrawing from that agreement and re-imposing its nuclear-related secondary sanctions.  The European Commission has now published an amendment to its Regulation 2271/96, the so called “blocking statute”, in order to mitigate the impact of the US’ secondary sanctions.

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Future proofing your contracts – ‘anti-oral variation’ clauses require even more thought

In Rock Advertising Limited v MWB Business Exchange Centres Limited  [2018] UKSC 24, the Supreme Court has handed down a decision which has provided further certainty in the area of no oral variation /modification clauses, albeit in doing so it has overturned the decision of the Court of Appeal referred to previously in our blog of 7 July 2016.

The wording considered was “All variations to this Licence must be agreed, set out in writing and signed on behalf of both parties before they take effect”. The question was whether the schedule of payments had been revised orally.

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Sanctions – North Korea

Listeners to our webinar on Wednesday will recall the discussion of the sanctions in play against the Democratic People’s Republic of Korea (DPRK, also known as North Korea). Of particular interest to the global business community had been the forthcoming summit between President Trump of the United States and Kim Jong Un, Leader of the DPRK, set to take place on 12 June in Singapore.  The world was watching to see if, and how, this summit would affect North Korea’s position in the world and in particular whether it might herald any changes in the significant sanctions in place against it.

President Trump yesterday cancelled that meeting, stating that it is “inappropriate” in the current circumstances. This announcement comes the same day that the DPRK invited the world’s media to watch the apparent destruction of its nuclear weapons development site at Punggye-ri. Immediately after pulling out of the meeting with North Korea, President Trump said that the United States would continue its “maximum pressure campaign,” and noted that the military was “ready if necessary”.  He further stated that a meeting could still go forward if Kim Jong Un is willing to engage constructively.

We will report on this situation as it develops. For now, it seems that there is unlikely to be significant change in the U.S. sanctions regime against the DPRK.

Venezuelan drug smuggling – CTL and recovery for detention under Institute clauses

Navigators Insurance Company Limited v Atlasnavios-Navegacao LDA [2018] UKSC 26

In a decision handed down yesterday (22 May) the Supreme  Court  held that where a vessel was used by unknown third parties in an unsuccessful attempt to export cocaine from Venezuela (by strapping a parcel of drugs to the vessel underwater), leading to a detention of the vessel by Venezuelan authorities for more than 6 months, the Owners were not entitled to recover the vessel’s insured value from the vessel’s war risk insurers.

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