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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?

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.

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 Limits on Receivers’ obligations

Summary

The claimant was named as shipper on a bill of lading for a consignment of cargo on the MV Nortrader, despite not being a party to the contract of carriage. The defendant, the owner of the vessel, suffered losses after a cargo explosion occurred on board the vessel shortly after the cargo had been loaded. The defendant commenced arbitration and brought a claim for damages against the claimant, as the named shipper. Although a London tribunal found it had jurisdiction to hear the dispute, the claimant was successful in its application to the High Court under section 67 of the Arbitration Act 1996 to set aside the award on the basis it was not the shipper and therefore was not a party to an arbitration agreement with the defendant.

Continue Reading ‘Shipper’ proves it was not the shipper and avoids claim for cargo explosion: MVV Environment Devonport Ltd v. NTO Shipping GmbH & Co. KG MS Nortrader [2020] EWHC 1371 (Comm), “MV NORTRADER”

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

There seem to be endless variations of the clauses in voyage charterparties requiring owners to provide copies of the relevant or supporting documentation with demurrage claims. We receive a surprising number of queries relating to what is required.

In Amalie Essberger, a Commercial Court decision of 11 December 2019, the charter was on an amended ASBATANKVOY form, and there were two rider clauses dealing with documentation.
Continue Reading Demurrage claims

Summary

This case provides useful guidance on the application of rules of construction in relation to guarantees that display characteristics of both an “on-demand” guarantee and a “true guarantee,” and where obligations are undertaken by a non-bank entity. In such cases, there is no requirement for a narrow construction of the guarantor’s obligations. For information on the payment instruments under English law in light of this case, please read our client alert.

Case update

Background

The claimant, Rubicon Vantage International Pte Ltd (Rubicon), owns a floating storage and offloading facility called Rubicon Vantage (the Vessel), and by a bareboat charter dated October 13, 2014 (the Charter), chartered the Vessel to Kris Energy (Gulf of Thailand) Limited (Kegot), a wholly owned subsidiary of the defendant (Krisenergy).

By clause 22.2 of the Charter, Kegot was obliged to procure for Rubicon a “Charterer Guarantee,” the terms of which were set out in Exhibit E to the Charter. Krisenergy provided a guarantee to Rubicon, which was not exactly in the terms of Exhibit E, on or about October 13, 2014 (the Guarantee).

By the terms of the Charter, Rubicon was required to organise various works on the Vessel before the charter term commenced.

Rubicon carried out the works, and later sent a series of invoices to Kegot in June 2015, four of which were the subject of the dispute.

In September 2018, Rubicon made a demand on Krisenergy under the Guarantee for the total sum outstanding under the four invoices. Krisenergy declined to pay. Rubicon commenced proceedings in November 2018.

Terms of the Guarantee
Continue Reading Rubicon Vantage International PTE Ltd v. Krisenergy Ltd [2019] EWHC 2012 (Comm)

Summary

The “Atlantic Tonjer” [2019] EWHC 1213 (Comm) is thought to be the first reported judgment on SupplyTime 2017. The decision clarifies the meaning of clause 12(e) of the standard form, which requires Charterers to notify Owners by no later than the due date of an invoice, if they reasonably believe that the invoice is incorrect. The Court construed clause 12(e) in its commercial setting, highlighting the equal bargaining power of the parties and the importance of cash flow to Owners as key features. It found that, on its proper construction, clause 12(e) means that Charterers cannot later raise a defence to payment of an invoice of which Charterers have failed to notify Owners by way of a valid notice prior to its due date. Whilst this does not impact on Charterers’ right under 12(g) or their right to raise a counterclaim, it serves as a reminder that courts have little sympathy for commercial parties that have misunderstood the letter of their bargain. It provides a valuable insight into the judicial approach to SupplyTime 2017 and standard form charterparties negotiated between commercial parties generally. Parties are advised to negotiate standard form charterparties cautiously and know exactly what their contracts say.

The “Atlantic Tonjer” – the first glimpse of the judicial approach to interpreting SupplyTime 2017

On 14 May 2019, the High Court handed down its judgment in Boskalis Offshore Marine Contracting BV v Atlantic Marine and Aviation LLP (the “Atlantic Tonjer”) [2019] EWHC 1213 (Comm). This is thought to be the first reported judgment on the BIMCO SupplyTime 2017 standard form.

“SupplyTime” was first published in 1975 and, now in its third revision, is one of BIMCO’s most widely used forms.  It is considered to be the industry standard form for the chartering of offshore vessels. The 2017 revision included amendments to the payments provision at clause 12(e), and this dispute gave the Court (Sir Ross Cranston sitting as Deputy Judge) the opportunity to clarify the effect of the revised clause 12(e), as well as to consider SupplyTime2017 generally.

Background
Continue Reading The “Atlantic Tonjer” – the first glimpse of the judicial approach to interpreting SupplyTime 2017

Summary

The Court of Appeal’s decision in Ark Shipping Co LLC v. Silverburn Shipping (IOM) Ltd, “ARCTIC”  [2019] EWCA Civ 1161, provides a clear statement of the principles of construction, and how they are applied in ascertaining whether a term is a condition or an innominate term.

This decision provides guidance on the proper interpretation of parties’ continuing obligations during the life of a bareboat charterparty in relation to matters such as classification status, and the consequences if a charterer fails to fulfil such obligations. It also demonstrates the Court’s reluctance to classify contractual terms as conditions, where the risk of disproportionate consequences outweighs the advantages of commercial certainty.

While this case is particularly relevant to bareboat charterers, it is also anticipated to have implications for the interpretation of similar obligations in a time charter context.

Ark Shipping Company LLC v. Silverburn Shipping (IoM) Ltd [2019] EWCA Civ 1161

In a judgment of 10 July 2019, the Court of Appeal heard an appeal of a High Court decision dated 22 February 2019, where an appeal from an LMAA arbitration award was brought pursuant to s. 69 of the Arbitration Act 1996.

Facts

Continue Reading MV “ARCTIC” – Obligation to “keep vessel in class” is an innominate term