Performance guarantees, vessel arrests, and implied terms

In CVLC Three Carrier Corp and Anor v Arab Maritime Petroleum Transport Company ([2021] EWHC 551 (Comm)), Reed Smith (Nick Austin, Charles Weller, Alfred Perkins, Vassilis Mavrakis) represented two shipowning companies in successfully overturning an arbitration award which held that there was an implied term in a performance guarantee that the beneficiary would not seek further security beyond that created by the guarantee itself, thus protecting the guarantor’s vessels from arrest. Continue Reading

The Crucial Role of the DPA in Casualty Response

Introduction

At nautical college mariners are taught about the importance of communication, particularly in emergency situations. Similar to the tale of Goldilocks, the trainers teach you, not too much, not too little, just enough. This is drilled into seafarers in all their courses such as firefighting, sea survival, Bridge Resource Management etc. But it must be remembered that communication goes two ways. A Master on a ship that is experiencing an emergency is often communicating with a person who could be many time zones away and it may be that person may not actually have any marine experience, so explaining the situation can be a difficult and time consuming event. It is also not something that is commonly practised in drills, unlike the physical donning of suits and practising with a fire hose for example, even though it is a crucial part of the emergency process. Continue Reading

During ocean-going vessel inspections, California is to increase fuel sample analysis

Beginning in May 2021, California Air Resources Board (“CARB”) enforcement staff will begin additional analysis of fuel samples taken during ocean-going vessel inspections. CARB is seeking to improve compliance due to changing international regulatory sulfur limits, which has created situations where a vessel’s fuel may meet international and California regulatory sulfur limits, but not meet distillate grade fuel standards, as required by California law.

Continue reading. 

Smart as ever, the Supreme Court provides clarity on the crossing rules

On 19 February 2021 the Supreme Court delivered its very first judgment in relation to a collision action.  While the Supreme Court was only established in 2009, it is almost half a century since the highest appellate court in England and Wales has decided such a matter.  In this eagerly anticipated decision, the Court had to consider the application of the International Regulations For Preventing Collisions At Sea 1972 (the ‘COLREGS’), in relation to a collision between the 7.030 TEU container ship Ever Smart and the laden 153,044 DWT VLCC Alexandra 1 off the dredged access channel to Jebel Ali in the late evening of 11 February 2015. Continue Reading

Trans-Tec International SRL, World Fuel Services (Singapore) Pte Ltd v the“Columbus” and the “Vasco da Gama” [2020] EWHC 3443 (Admlty)

Reed Smith (Charles Weller and Nick Wright) recently acted for the successful claimants (“WFS”) in two in rem claims against cruise ships “Columbus” and “Vasco da Gama”.  The claims derived from WFS providing multiple bunker stems to the cruise ships, for which WFS remained unpaid.

The decision of the Admiralty court provides useful guidance on recovery under secondary contractual obligations in a claim for the supply of necessaries to a ship. Continue Reading

Guarantees

This blog post explores the different ways of drafting guarantees and how this interacts with the obligations of parties within the shipping industry.

What is a guarantee?

A contract of guarantee is an undertaking given by one party (the guarantor) to another party (the beneficiary) to pay the principal obligor’s debts or to perform their obligations set out in the underlying contract. A guarantor has a secondary obligation to the beneficiary and therefore the guarantor will typically only be obliged to act where there has been a breach of the underlying contract. Whilst the commercial reasons behind a guarantee are often straightforward, the use of the word “guarantee”  including the fact that the term “guarantee” is also frequently used to refer to other arrangements, such as contracts of indemnity (the difference between these terms is explored further below), and the differing ways in which guarantees are drafted, often leaves scope for ambiguity. Such ambiguity can be problematic for a beneficiary trying to enforce the provisions of their agreement. Continue Reading

The “Tai Prize” [2021] EWCA Civ 87: An invitation to the Master?

At a glance: the words “CLEAN ON BOARD” and “SHIPPED in apparent good order and condition” in a draft bill of lading presented to the Master for signature, were merely an invitation by the shippers to the Master to make those representations in accordance with his own assessment.

Our previous briefing on this case can be found here. Continue Reading

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