More transparency needed in shipping industry to tackle the impact of COVID-19

Early results from our 2020 shipping survey – Navigating a post-COVID world indicate that industry participants believe more transparency is needed to tackle the impact and challenges caused by the pandemic.

66% of respondents so far indicate that transparency and sharing of information might be key to the shipping industry emerging stronger from the crisis.

There has been much conversation in recent years about advancements in technology allowing for more information sharing across the industry. The discussion was highlighted again at last year’s London International Shipping Week (see here). In 2020, the use of technology is illustrated by the Ship Recycling Transparency Initiative, which aims to “drive progress on responsible ship recycling by way of a one-stop shop online platform to report information on policies and practices against a set of predefined disclosure criteria.”

Despite potential liability and insurance risks caused by too much transparency, it appears that industry participants think the sharing of information on challenges, such as crewing and dealing with testing, might be the best way forward.

Have your say in our survey here.

Damages in addition to demurrage – long standing debate settled in owners’ favour

Public today: an important judgment handed down by the English High Court this morning has re-opened the door to recovering damages in addition to demurrage for losses caused by exceeding laytime in cargo operations.

In today’s 85 page judgment in K Line Pte Ltd vs Priminds Shipping (HK) Co Ltd (The Eternal Bliss) [2020] EWHC 2373 (Comm), Mr Justice Andrew Baker thoroughly surveys almost 100 years of law and commentary on a question that has never been properly resolved and which has divided the opinion of academics and practitioners alike.

In reaching the “firm and clear view” that The Bonde (1990), thought by some to have settled the issue 30 years ago, was wrongly decided the Court found that, quite apart from demurrage, damages can be also recovered for other losses caused by a failure to load or discharge within the allowable laytime. No separate breach of charter is required. Continue Reading

Navigating a post-COVID world: Take part in our survey

How will the shipping industry respond to the impact of COVID-19?

We are conducting a short anonymous survey to discover what impact participants consider COVID-19 will have on the shipping industry. Through collecting responses from companies representing the industry across different sectors and geographies, we shall analyse the impact COVID-19 may have on different segments of the market.

We want your insight – take part in our survey.

Recent Trends in U.S. Vessel Arrest Cases

As the global economic recession grows, so does the number of vessel arrests by maritime creditors.  We highlight below four trends observed in the vessel arrest cases that are multiplying in the U.S.  Some of these trends are tied to the particularities of the COVID-19 recession.  Others resurface at every economic downturn.  It is particularly important for preferred ship mortgagees to be aware, and beware, of these trends.

First, vendors may be more willing to move to arrest vessels during these uncertain times.  For example, a New York marina has arrested multiple vessels docked on its premises for non-payment of its fees.  This development is significant because the claims of some vendors may take priority over preferred mortgages.  Under U.S. law, maritime liens for necessaries provided to vessels in the U.S. take priority over foreign (i.e., non-U.S. flag) ship mortgages.  Maritime liens for necessaries provided outside the U.S. are generally subordinate to preferred mortgages, but the priority of preferred mortgage liens is subject to certain exceptions that are not always well delineated.  Whether the arrester’s claims are subordinate or not, it is critical for the mortgagee to intervene in the arrest action.  Otherwise, the mortgagee could lose its mortgage lien as a result of the action, without receiving any portion of the proceeds of the sale of the vessel.  However, timely intervention can be challenging, especially because the arrester is not always required to notify the mortgagee.  Publication of a notice of arrest in a local newspaper may constitute sufficient notice under U.S. law.  Prudent lienholders thus maintain a close watch on the trading patterns of vessels, and, if a vessel remains in a port for a longer time than usual, monitor court dockets to be ready to intervene and preserve their claims. Continue Reading

Protection for Seafarers? International Summit on Crew Changes

On 9 July, governmental representatives of the UK, Denmark, France, Germany, Georgia, Greece, Indonesia, Netherlands, Norway, Philippines, Saudi Arabia, Singapore, United Arab Emirates and USA held a virtual summit, alongside business leaders across the world, to discuss the issues faced by seafarers during the COVID-19 pandemic.

The summit was hosted by UK Transport Secretary, Grant Shapps, and UK Maritime Minister, Kelly Tolhurst.

The result of the summit was a commitment from the attendee governments to agree and introduce international measures to improve repatriation of seafarers and crew changes, during the global pandemic.

Continue Reading

Upcoming public hearing scheduled for late August – California proposes revisions to regulation of air emissions from “Ships at Berth.”

The California Air Resources Board (“CARB”) has again proposed revisions to the State’s existing “Ocean-Going Vessels At-Berth Regulation” of air emissions from ships docked in California. As revised, further reductions in air emissions will be required, but some of the earlier implementation dates have been extended.

Most substantive changes were made in response to feedback received from CARB’s Board during the June 25, 2020 Board Meeting, public comments received during the formal comment period for the “15-Day Changes” that began March 26, 2020 and ended May 1, 2020, and internal feedback from CARB legal and enforcement staff.

Continue reading.

 

Limits on Receivers’ obligations

In Sea Master Shipping Inc v Arab Bank (Switzerland) Ltd & Yousef Freiha & Sons SA [2020] EWHC 2030, Owners, in a situation where Charterers were in insolvent liquidation and unable to meet their obligations under a voyage charter, sought to hold receivers liable for delay at the discharge port under the bill of lading.

The decision by the arbitration tribunal that neither the financing bank nor the receivers were liable for discharge port demurrage was unappealable.

That left the Commercial Court considering the Owners’ attempt to introduce an implied term into the contract of carriage (contained in or evidenced by the bill of lading), that the bank and / or the receivers would: (i) take all necessary steps to enable the cargo to be discharged and delivered within a reasonable time; and / or (ii) discharge the cargo within a reasonable time.

In the usual way, the bill of lading included a clause incorporating the terms of the voyage charter and it was common ground that this meant that they were incorporated “insofar as they [were] appropriate and relevant for such incorporation”. Continue Reading

Hydrogen fuel cell demonstrations in rail and marine applications at ports – California Energy Commission workshop

Companies reliant upon the use of rail services and commercial harbor craft at California’s ports should be interested in the State’s:

  • Increasing focus on utilizing zero emission technologies to reduce greenhouse gas emissions resulting from port-related operations; and
  • Provision of $6.6 million in available grants to “fund the design, integration, and demonstration of hydrogen fuel cell systems and hydrogen fueling infrastructure for locomotive and commercial harbor craft” operations

On July 31, 2020 (10:30-12:30 PDT), the California Energy Commission will be hosting a workshop to assist applicants in obtaining these funds.

Due to COVID-19, the Workshop is available on-line only at:

https://zoom.us/join

Meeting ID: 947 9266 2867
Meeting Password: 357152
Topic: GFO-20-604 Pre-Bid Workshop

Continue reading.

Final and binding or just binding? Term in trade recap stating that a certificate of quality is binding is qualified by the BP GTCs 2007: Septo Trading Inc. v Tintrade Limited [2020] EWHC 1795 (Comm), Queen’s Bench Division, Commercial Court, Mr Justice Teare, 8 July 2020

Background

This dispute arose out of a contract for the sale and purchase of fuel oil on FOB Ventspils, Lativa terms between Septo Trading Inc. as Buyer and Tintrade Limited as Seller. The sale contract was evidenced by a trade recap which incorporated the BP general terms & conditions for sales and purchases of Petroleum Products 2007 (the “BP GTCs 2007”) “where not in conflict with the above” (i.e. the recap itself). Continue Reading

Notice requirements to prevent the time bar under the Inter Club Agreement

Recently, Lloyd’s Maritime Law Newsletter reported on a recent arbitration award in which Reed Smith acted, regarding the requirements for notice under the 1996 Inter-Club Agreement (ICA), as amended in 2011.

The decision concerned a notice that, on the face of it, bore no resemblance to a usual ICA notice as it: a) was given by Charterers prior to the cargo being discharged and hence cargo interests becoming aware of the damage, let alone asserting a cargo claim; b) did not say it was an ICA notice; c) primarily concerned Owners and Charterers arranging a joint survey at discharge; and d) did not contain certain mandatory information prescribed by the ICA. Continue Reading

LexBlog