The Court of Appeal in Classic Maritime Inc. v Limbungan Makmur SDN BHD and Another [2019] EWCA Civ 1102 contrasted the circumstances in which an exceptions clause and a contract frustration clause would operate.

The appeal concerned the charterer’s failure to ship five cargos of iron ore from Brazil to Malaysia in the period following the Fundao dam disaster, which had the effect of preventing iron ore cargos from being shipped from Ponta Ubu but not from Tubarao.  The court of first instance had found that the charterer did not intend to ship cargo due to a collapse of demand in Malaysia but, had it wanted to, it would have been unable to source alternative cargo from Tubarao.
Continue Reading Force majeure clauses: what matters is not the label but the content of the tin!

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.

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

On January 18, the European Commission published guidelines outlining the impact a no-deal Brexit will have on the recognition and enforcement of UK judgments in the remaining 27 EU countries (EU 27). The Commission states that where the judgment concerned requires exequatur, and the UK court has obtained exequatur before March 29 (or any extended

On 5 October 2018, the English Court of Appeal confirmed the High Court decision in National Challenge Ltd. v. Evergreen Marine (UK) Ltd [2017] EWHC 453 (Admlty) that the crossing rule does not apply where one vessel is approaching a narrow channel intending to enter it and another vessel is navigating in the narrow channel intending to exit it, so as to involve risk of collision. This decision seeks to provide certainty in such situations and promote safe navigation; however, the decision may not be relevant in all situations when vessels are crossing, whilst navigating in or near a narrow channel.

Background

On 11 February 2015, a laden VLCC, Alexandra 1, and a laden container vessel, Ever Smart, collided just outside the dredged entrance channel to Jebel Ali in the United Arab Emirates. At the time of the collision, the Alexandra 1 was inbound and the Ever Smart was outbound.

As previously reported, at first instance the Admiralty Judge, Mr. Justice Teare (“Teare J”), held that Rule 15 of the International Regulations for Preventing Collisions at Sea, 1972 (the Collision Regulations), the crossing rule, did not apply and that when Alexandra 1 approached the narrow channel she was not under a duty to keep out of the way of Ever Smart. Instead, the navigation of the two vessels was governed by: Rule 9, the narrow channel rule, in the case of Ever Smart; and Rule 2, the requirement of good seamanship, in the case of Alexandra 1.Continue Reading The crossing rule and narrow channels – Court of Appeal hands down judgment in the Alexandra 1

On 31 August 2018, the Supreme Court of Singapore and the Supreme People’s Court of the People’s Republic of China (PRC) signed a memorandum of guidance (MOG) on the recognition and enforcement of money judgments in commercial cases.
Continue Reading Singapore courts and PRC courts sign memorandum of guidance on the recognition and enforcement of money judgments in commercial cases

In Dera Commercial Estate v. Derya Inc [2018] EWHC 1673, the Commercial Court considered several issues of interest arising out of Article III Rule 6 of the Hague Rules ( “Article III Rule 6”), in the context of a bill of lading for the carriage of maize destined for Jordan which, on arrival, was not allowed into the country by the Jordanian customs authorities, due to damage and “apparent fungus”.  Although, after various efforts to reverse the decision of the customs authorities, the local court gave permission to fumigate the cargo on board the vessel in the hope of preserving its condition, the vessel nevertheless sailed to Turkey, where the cargo was ultimately discharged and sold pursuant to a judicial sale order.
Continue Reading Dera Commercial Estate v. Derya Inc [2018] EWHC 1673

The law on ship arrest in England is well-entrenched. In essence, a party’s ability to arrest a ship in the UK occurs as of right. Accordingly, a shipowner will be unable to recover any compensation at all for wrongful arrest unless the arrest was obtained by mala fides (bad faith or malice) or crassa negligentia (gross negligence). This would also include whether a vessel owner is entitled to request that the arresting party provide a cross-undertaking in damages in the same form as that typically required in applications for freezing orders in the Commercial Court.  The recent decision in Natwest Markets plc v. Stallion Eight Shipping Co. S.A. [2018] EWHC 2033 (Admlty) confirms the Admiralty Court’s position that such undertakings are not applicable in vessel arrests.
Continue Reading Ship arrests in the UK – can an arresting party be required to give cross-undertakings in damages?

In Robert Bou-Simon v. BGC Brokers LP [2018] EWCA Civ 1525, the Court of Appeal considered deleted provisions and implied terms. Although in the context of an employment contract, the decision obviously has wider application.

The Court held that the judge at first instance had not properly applied the legal test for the implication of