Comment and analysis by Reed Smith lawyers on the latest developments in the shipping industry
There have been several decisions in 2022 about carrier’s defences to misdelivery claims under bills of lading.
Carriers face misdelivery claims when they deliver cargo without production of original bills of lading, but then someone else claiming to be the ‘lawful holder’ of the bills complains the cargo should have been delivered to them instead…
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 question of whether demurrage liquidates all or just some of the damages arising from a charterer’s breach in failing to complete cargo operations within the laytime has divided practitioners and academics for decades and, more recently, the English Court in K Line Pte Ltd v. Priminds Shipping (HK) Co Ltd [2021] EWCA Civ 1712 (The Eternal Bliss). Now, in granting permission to appeal to the shipowners, it is a question which the Supreme Court has said it will answer.…
Continue Reading The Eternal Bliss – Permission to appeal granted by the UK Supreme Court
It is settled law that a carrier who delivers goods without production of the bill of lading is typically liable for any consequential losses suffered by the bill of lading holder. In the course of prosecuting its claim against the carrier, the bill of lading holder may seek to obtain summary judgment without trial on the basis that there is plainly no defence to its claim.
In the recent case of The “STI Orchard” [2022] SGHCR 6 where the plaintiff bank (“Plaintiff”) sought summary judgment against the defendant shipowner (“Defendant”), the General Division of the High Court of Singapore granted the Defendant unconditional leave to defend the Plaintiff’s claim for misdelivery. A key issue identified by the Court was whether the bills of lading were intended to be relied on as security for the Plaintiff’s financing in the underlying transaction.…
Pacific Pearl Co Limited v Osios David Shipping Inc [2022] EWCA Civ 798
The Court of Appeal (“CA”) has overturned the decision of Justice Teare that security tendered under the Admiralty Solicitor Group form ASG 2 (Collision Jurisdiction Agreement) (“CJA”) needed to be subjectively acceptable to the offeree. Instead the CA has determined that it is sufficient that it be objectively acceptable.
The decision followed the earlier ruling by Sir Nigel Teare (as reported in Lloyd’s Law Reports, [2022] 1 Lloyd’s Rep. 261) in an action brought by owners of the Panamax Alexander (“PA”) against the owners of Osios David (“OD”), with whom they collided, alleging breach of the CJA clause C. This clause provides that “Each party will provide security in respect of the other’s claim in a form reasonably satisfactory to the other.”
The owners of the PA proposed security which contained a sanctions clause (the scheme of the ASG 2 is that it is expected to be used with a plain security in the form of ASG 1). This was rejected by the owners of the OD on the basis that it was not reasonably satisfactory to them. In the first instance it was held that such security from a prominent International P&I Club must be objectively reasonable but that there was nothing in the CJA that compelled the recipient to accept it and that they were at liberty to seek better security elsewhere including by arrest.…
Continue Reading Court of Appeal overturns judgement on acceptable security in collision matter
In our October 2021 blog “Possession as we (don’t) know it!”, we discussed the existing position under English law in respect of electronic trade documents and the scope for reform in light of the Law Commission’s consultation paper and draft legislation “Digital assets: electronic trade documents (2021) Law Commission Consultation Paper No 254”, published on 30 April 2021.
Continue Reading Solving the ‘possession’ problem – Law Commission publishes draft legislation for the legal recognition of electronic trade documents
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?
Exemption clauses, including those purporting to exclude or limit liability for deliberate and repudiatory breaches, are to be construed by reference to the normal principles of contractual construction. There is no presumption in English law that exemption clauses do not apply to fundamental breaches. Nor is there a requirement for any particular form of words or level of language to exclude liability.…
Continue Reading Exemption clauses subject to contractual interpretation
Introduction
In Septo Trading Inc v Tintrade Limited ([2021] EWCA Civ 718) the Court of Appeal overturned a High Court decision ([2020] EWHC 1795 (Comm)) that a term in a trade recap which provided that an inspector’s results were “binding on the parties save for fraud or manifest error” was qualified by the BP 2007 General Terms and Conditions for FOB sales (the “BP GTCs 2007”). Our blog post on the High Court’s decision can be found here. …
Continue Reading Court of Appeal clarifies that term in trade recap stating that certificate of quality is final and binding is not qualified
Reed Smith recently acted for a mortgagee client who successfully purchased a vessel at a judicial auction, following default by a borrower under a loan facility and the vessel’s subsequent arrest.
Continue Reading Bunkers Legerdemain
