During ocean-going vessel inspections, California is to increase fuel sample analysis

By Todd O. Maiden and Eric Schmoll on 8 March 2021 Posted in Regulatory Compliance

Beginning in May 2021, California Air Resources Board (“CARB”) enforcement staff will begin additional analysis of fuel samples taken during ocean-going vessel inspections. CARB is seeking to improve compliance due to changing international regulatory sulfur limits, which has created situations where a vessel’s fuel may meet international and California regulatory sulfur limits, but not meet distillate grade fuel standards, as required by California law.

Smart as ever, the Supreme Court provides clarity on the crossing rules

By Mark Myles on 8 March 2021 Posted in Admiralty, Supreme Court

On 19 February 2021 the Supreme Court delivered its very first judgment in relation to a collision action. While the Supreme Court was only established in 2009, it is almost half a century since the highest appellate court in England and Wales has decided such a matter. In this eagerly anticipated decision, the Court had to consider the application of the International Regulations For Preventing Collisions At Sea 1972 (the ‘COLREGS’), in relation to a collision between the 7.030 TEU container ship Ever Smart and the laden 153,044 DWT VLCC Alexandra 1 off the dredged access channel to Jebel Ali in the late evening of 11 February 2015. Continue Reading

U.S. congress applies Jones Act to offshore wind

By Jane Sarma and Katherine Stavis on 25 February 2021 Posted in Jones Act, Offshore wind, United States

Congress recently affirmed that the Jones Act applies to offshore windfarms. It did so via amendment to the Outer Continental Shelf Lands Act (the “OCSLA”), in a brief section near the end of the annual omnibus National Defense Authorization Act.[1] Continue Reading

Trans-Tec International SRL, World Fuel Services (Singapore) Pte Ltd v the“Columbus” and the “Vasco da Gama” [2020] EWHC 3443 (Admlty)

By Charles Weller and Nick Wright on 24 February 2021 Posted in Admiralty, Claims, Disputes

Reed Smith (Charles Weller and Nick Wright) recently acted for the successful claimants (“WFS”) in two in rem claims against cruise ships “Columbus” and “Vasco da Gama”. The claims derived from WFS providing multiple bunker stems to the cruise ships, for which WFS remained unpaid.

The decision of the Admiralty court provides useful guidance on recovery under secondary contractual obligations in a claim for the supply of necessaries to a ship. Continue Reading

Guarantees

By Robbie Peroni and Gemma Adams on 23 February 2021 Posted in Guarantees

This blog post explores the different ways of drafting guarantees and how this interacts with the obligations of parties within the shipping industry.

What is a guarantee?

A contract of guarantee is an undertaking given by one party (the guarantor) to another party (the beneficiary) to pay the principal obligor’s debts or to perform their obligations set out in the underlying contract. A guarantor has a secondary obligation to the beneficiary and therefore the guarantor will typically only be obliged to act where there has been a breach of the underlying contract. Whilst the commercial reasons behind a guarantee are often straightforward, the use of the word “guarantee” including the fact that the term “guarantee” is also frequently used to refer to other arrangements, such as contracts of indemnity (the difference between these terms is explored further below), and the differing ways in which guarantees are drafted, often leaves scope for ambiguity. Such ambiguity can be problematic for a beneficiary trying to enforce the provisions of their agreement. Continue Reading

The “Tai Prize” [2021] EWCA Civ 87: An invitation to the Master?

By Nick Austin and Nick Wright on 17 February 2021 Posted in Case Law

At a glance: the words “CLEAN ON BOARD” and “SHIPPED in apparent good order and condition” in a draft bill of lading presented to the Master for signature, were merely an invitation by the shippers to the Master to make those representations in accordance with his own assessment.

Our previous briefing on this case can be found here. Continue Reading

TOWCON 2008 – Knock-for-Knock – Is the Tugowner’s liability exemption absolute?

By James Scott on 15 February 2021 Posted in Contractual Issues

Knock-for-knock clauses are designed for use in commercial contracts when the parties intend that they shall each be responsible for loss or damage to their own property, and any liability to third parties, irrespective of fault as between the contracting parties. Continue Reading

Buyer beware: Pre and post delivery issues under Shipbuilding Contracts

By Laura Hyne on 9 February 2021 Posted in Contractual Issues, Shipbuilding

The global order book for new vessels has been hit by the economic fall out of the pandemic, associated supply chain issues, over-supply and reduced demand in sectors such as offshore. However, with a globally ageing fleet and an increasing demand for greener and more efficient vessels, the shipbuilding market is expected to recover and grow at a rate of 5.7% between 2021-2026.[1] This blog looks at some of the risks posed to a buyer under a shipbuilding contract (“SBC”) both prior to and after delivery of the vessel. Continue Reading

Termination of Contracts

By CJ Kim and Celine Collis on 28 January 2021 Posted in Contractual Issues

Welcome back to our new series of ‘back to basics’ blog in which we will provide posts focused on common legal issues. This blog post looks at termination of contract, and the various ways in which contractual obligations could be brought to an end.

Why terminate a contract?

Parties enter into contracts in order to ensure mutually agreed obligations are enforceable by law. However, circumstances may change overtime: the contract may no longer be commercially beneficial, the other party may not be performing their obligations, or external circumstances – such as the COVID-19 pandemic – may render the contract unfeasible or detrimental to a contracting party. As a result, a party may wish to find means by which to bring the contract to end. Continue Reading

The “Majesty”: Cargo claims, LoUs, and the importance of clear cross-referencing

By Vassilis Mavrakis on 25 January 2021 Posted in Cargo Issues, LoU

At a glance: In a recent judgment, the Commercial Court highlighted the difficulties that can arise of out of LoU wording in terms of arbitration agreements and extensions of time.

Background

The M/V Majesty was carrying 25,000 mt of rice under a voyage charterparty on an amended Synacomex 90 form. Five Bs/L were issued. The charterparty contained (a) a BIMCO arbitration clause; and (b) a bespoke arbitration clause (“CP Arbitration Clause”), although it was common ground between the parties that the Bs/L incorporated the bespoke CP Arbitration Clause rather than the BIMCO clause. Continue Reading