Supply chain transparency is an essential process where companies investigate their own supply chains to ensure compliance with internal company procedures and relevant laws.
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An update on security and enforcement during a global pandemic
- Security
Obtaining security for a party’s claim on the one side or security for a party’s costs on the other can be crucial remedies in times of a global pandemic where there may be issues with enforcement due to the closures of courts, delayed processes and a general lack of available assets.
Security and enforcement interact closely with each other where unless security has been obtained in advance, the process of issuing enforcement proceedings may be disproportionately expensive or time-consuming, particularly where it is difficult to locate assets. In practical terms, it is often pointless to arbitrate if the claim is not secured.
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Force majeure and frustration
Welcome to our new series of ‘back to basics’ blogs in which we will provide blogs focused on common legal issues. This blog post will address force majeure and frustration, two concepts which charterers have regularly relied on since the presence of COVID-19, often with varying degrees of success.
General Rule
English law generally holds parties who have contracted to do something accountable even where subsequent events make performance challenging or expensive. Nevertheless, two exceptions can often be invoked, frustration and force majeure. It is important to note that under English law force majeure only applies if there is a specific clause within a contract that provides for it, while frustration is a common law doctrine. There has been renewed interest on force majeure, in particular, because of the COVID-19 pandemic.
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Ships to sound their horns for key workers on 1 May 2020
Jointly the International Chamber of Shipping (ICS) and the International Transport Workers’ Federation (ITF) are calling on seafarers across the world to sound their ships’ horns when in port at midday local time on 1 May 2020.
1 May marks International Workers’ Day (or Labour Day), with about 66 countries around the world (and many more unofficially) celebrating the contribution made by workers.
During the current COVID-19 crisis, it is especially important to recognise the contributions made by all maritime workers, including seafarers but also other on-board and onshore personnel, who are ensuring that medical supplies, fuel and food continue to be transported safely across the world. At the moment, they are doing so while working under extreme conditions, such as being unable to go home for even longer periods of time than usual, due to travel restrictions and difficulties in changing crews on vessels.
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Demurrage time bar: The importance of providing supporting documents in demurrage claims
Summary
Charterers successfully appealed an arbitration award under section 69 Arbitration Act 1996 on the basis that Owners did not submit all supporting documents for a demurrage claim within the 90-day time bar under the charterparty. Mr Justice Robin Knowles ruled that as the calculation of demurrage was pro-rated under the charterparty where another parcel was loaded/discharged at the same time and the bills of lading detailing the quantity of such parcel were available and referred to in the charterparty, they were part of all supporting documents to be presented by Owners with the demurrage claim, the failure of which led to the entire demurrage claim being time-barred. However, this case is to be viewed with caution by charterers seeking to rely on it as it expressly states that it was decided only on the basis of an interpretation of the particular clauses in this case, and without suggesting that there is a requirement to provide bills of lading where these are not available in a particular case.
Facts
Charterers appealed the arbitration award on the basis that Owners had not attached all of the necessary documents to their demurrage claim and because the 90-day period to submit those documents had elapsed, Owners’ demurrage claim had become time-barred. Under the charterparty both the calculation of laytime and demurrage was to be pro-rated where simultaneous loading or discharge of cargo from different charterers took place. Owners did not provide copies of the two bills of lading for the two parcels of cargo (Charterers’ cargo and a third party’s cargo). In regards to the statement of fact Owners submitted in support of their demurrage claim, the figure recorded did not accurately record the bill of lading quantities for the Charterers’ parcel. The statement of facts for the third party’s cargo stated that the bill of lading quantity was 6,014.906 MT.
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