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Introduction

In Perusahaan Perseroan (Persero) Pt Pertamina v Trevaskis Ltd and Others [2023] HKCFA 5, the Appeal Committee of the Court of Final Appeal (“CFA”), upon hearing submissions from both parties on 16 February 2023, granted leave to Perusahaan Perseroan (Persero) Pt Pertamina (“Plaintiff”) to appeal to the full court of the CFA on the following question of great general or public importance (“GGPI”) relating to the Convention on Limitation of Liability for Maritime Claims 1976 (“LLMC”):

Where a Contracting State has enacted LLMC Article 2(1) in full into local law but has, by a provision of local law (pursuant to Article 18), disapplied (permanently or temporarily) head (d), is a shipowner nonetheless entitled to limit its liability for a Private Recourse Claim under head (a), or does the existence and/or suspension of head (d) exclude the shipowner’s reliance upon head (a) for such claims?

(the “Question”)

In broad and practical terms, the issue in dispute is whether the Wreck Removal Claim was subject to limitation under LLMC article 2(1)(a) (“Head (a)”) in Hong Kong notwithstanding that LLMC article 2(1)(d) (“Head (d)”) has been suspended by way of local Hong Kong legislation as permitted by the LLMC.  The two heads are quoted below:-

Head (a): “claims in respect of … loss of or damage to property … occurring on board or in direct connection with the operation of the ship or with salvage operations, and consequential loss resulting therefrom;

Head (d): “claims in respect of the raising, removal, … of a ship which is sunk, wrecked …;Continue Reading Hong Kong team takes novel LLMC case to Court of Final Appeal

With thanks also to Counsel, Charles Holroyd at 7KBW.

In DHL Project & Chartering Ltd v. Gemini Ocean Shipping Co Ltd 2022-000247 [EWCA], the Court of Appeal, in a judgment upholding the High Court’s judgment of Mr Justice Jacobs, clarified the scope of the separability principle in relation to arbitration clauses in contracts, including the scope of s 7 Arbitration Act 1996.

A “subject” provision in a putative fixture requiring “shipper/receivers approval” was held to be of an unqualified character such that the contract would not become binding unless and until DHL (“Charterers”) lifted the “subject”, which, on the facts, had never occurred. That meant that not only the fixture, but also the arbitration agreement contained therein, was never concluded.Continue Reading Subjects and separability

In DHL Project & Chartering Ltd v. Gemini Ocean Shipping Co Ltd [2022] EWHC 181 (Comm), DHL (“Charterers”) succeeded in an application against Gemini (“Owners”) to set aside an arbitration award pursuant to section 67 of the Arbitration Act 1996 (the “Act”).

Mr Justice Jacobs held that a “subject” provision in a putative fixture requiring “shipper/receivers approval” was of an unqualified character. The Court found that the contract would not become binding unless and until Charterers lifted the “subject”, and on the facts, this had never occurred. Accordingly, no arbitration agreement came into existence and the Tribunal did not have substantive jurisdiction when it determined that Charterers had repudiated the charterparty.
Continue Reading To what are “subjects” subject?

Traditionally, the most common way of financing ships has been through debt and equity financing.  However, over the past decade, ship leasing has become a very significant competitor and alternative for the provision of finance for the acquisition of ships.  Recent market studies are expecting the global ship lease market to grow at a significant pace over the next five years – and that is already taking into account the expansion of Chinese leasing companies into the market over more recent years as well as the potential impact of Covid-19.

Recognising this growth and appetite for ship leasing transactions, the world’s largest international shipping association, BIMCO, set its sights on developing the industry’s first ship sale and leaseback standardised term sheet.  The sale and leaseback term sheet ‘SHIPLEASE’ was released last month and will be rolled out to support shipowners, leasing companies, financial brokers and lawyers when negotiating and drawing up sale and leaseback agreements.

But what is ship leasing and why is it such a strong trend in shipping? We explore this growing market and look at what is in store for market players in these new and challenging times.
Continue Reading A new world of ship leasing and sale and leaseback transactions

Today’s global economy is facing unprecedented challenges and many firms are in the business of survival as a consequence of the Covid-19 outbreak. While some Asian countries are starting to show signs of emerging from lockdown, it is nonetheless a grim and trite recital to acknowledge that many Asian countries were heavily affected in the early stages of the global crisis. According to official figures, China’s GDP recorded an unprecedented 6.8 percent year-on-year decline in the first quarter of 2020. Being at the geographic forefront of the current crisis, our Asian offices have been both advising and counseling numerous clients with their commercial matters and arrangements that have faced interference as a result of the Covid-19 outbreak.

We would like to share our experience of handling Covid-19 in Asia, and lessons learned.
Continue Reading COVID-19 and the impact on shipping– what have we learnt from Asia

On 30 January 2020, the World Health Organization declared the outbreak of the novel coronavirus (2019-nCoV) (the Virus) to be a Public Health Emergency of International Concern. It seems clear that the Virus is also having an impact on economic activities not only in China, but also in the 23[1] countries outside of China where