Iran Sanctions – August Deadline

On 8 May 2018, President Trump announced that the United States would withdraw from the Joint Comprehensive Plan of Action (“JCPOA”). In conjunction with that announcement, the President issued a National Security Presidential Memorandum (“NSPM”) directing the re-imposition of certain secondary sanctions, being those that apply to non-US persons even where there is no US nexus. Depending on the economic sector targeted, the particular sanction will be imposed either 90 or 180 days after the President’s announcement (6 August and 5 November, respectively).

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Good News in Store for Hong Kong’s Maritime Industry in the Second Half of 2018

On 1 July 2018, Hong Kong celebrated the 21st anniversary of the end of British colonial rule and its return to the Motherland’s embrace.

1 July also marks the beginning of the second half of the year.  If Year 2018 were a soccer match, the players are now back on the field, feeling refreshed after the halftime break, and ready to kick-off the second half of the match.

For Hong Kong’s maritime industry, the game has so far been tough, just like last year, and the year before that.  Team Hong Kong has been playing on defence mode, struggling to hold its ground against strong rivals like Singapore and Shanghai.  With this comes the city’s realization that laissez faire, the style of governance that had once been a source of pride, may have passed its heyday.

With a bit of luck, though, and barring any contingencies with the US-China trade war, the second half of 2018 may see the tide turn for Hong Kong and its maritime industry, for there is good news to come. Continue Reading

Update on recent developments in the Shipping Industry

For an update on recent developments in the Shipping Industry, click here to listen to our recent webinar.

During the webinar, we cover some of the key shipping cases in the last 6 months. We also take a look at electronic bills of lading including how they work, common benefits and pitfalls, as well as considering how they could operate in the future.

  1. Recent developments in case law
  • Interclub agreement
  • US COGSA – “management of the ship”
  • Hague Rules package limitations and time bar provisions
  • Off-hire under Shelltime 4
  • No oral variation clauses
  • Entire agreement clauses
  1. Update on Electronic Bills of Lading
  • Current status
  • Benefits/Pitfalls
  • Future of electronic bills of lading

Iran Sanctions – Developments from the EU

As discussed in our blog post of 21 May 2018, the EU has reaffirmed its commitment to the Joint Comprehensive Plan Of Action in the wake of the US’ announcement that it would be withdrawing from that agreement and re-imposing its nuclear-related secondary sanctions.  The European Commission has now published an amendment to its Regulation 2271/96, the so called “blocking statute”, in order to mitigate the impact of the US’ secondary sanctions.

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Future proofing your contracts – ‘anti-oral variation’ clauses require even more thought

In Rock Advertising Limited v MWB Business Exchange Centres Limited  [2018] UKSC 24, the Supreme Court has handed down a decision which has provided further certainty in the area of no oral variation /modification clauses, albeit in doing so it has overturned the decision of the Court of Appeal referred to previously in our blog of 7 July 2016.

The wording considered was “All variations to this Licence must be agreed, set out in writing and signed on behalf of both parties before they take effect”. The question was whether the schedule of payments had been revised orally.

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Sanctions – North Korea

Listeners to our webinar on Wednesday will recall the discussion of the sanctions in play against the Democratic People’s Republic of Korea (DPRK, also known as North Korea). Of particular interest to the global business community had been the forthcoming summit between President Trump of the United States and Kim Jong Un, Leader of the DPRK, set to take place on 12 June in Singapore.  The world was watching to see if, and how, this summit would affect North Korea’s position in the world and in particular whether it might herald any changes in the significant sanctions in place against it.

President Trump yesterday cancelled that meeting, stating that it is “inappropriate” in the current circumstances. This announcement comes the same day that the DPRK invited the world’s media to watch the apparent destruction of its nuclear weapons development site at Punggye-ri. Immediately after pulling out of the meeting with North Korea, President Trump said that the United States would continue its “maximum pressure campaign,” and noted that the military was “ready if necessary”.  He further stated that a meeting could still go forward if Kim Jong Un is willing to engage constructively.

We will report on this situation as it develops. For now, it seems that there is unlikely to be significant change in the U.S. sanctions regime against the DPRK.

Venezuelan drug smuggling – CTL and recovery for detention under Institute clauses

Navigators Insurance Company Limited v Atlasnavios-Navegacao LDA [2018] UKSC 26

In a decision handed down yesterday (22 May) the Supreme  Court  held that where a vessel was used by unknown third parties in an unsuccessful attempt to export cocaine from Venezuela (by strapping a parcel of drugs to the vessel underwater), leading to a detention of the vessel by Venezuelan authorities for more than 6 months, the Owners were not entitled to recover the vessel’s insured value from the vessel’s war risk insurers.

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Sanctions on Iran – The EU Response

Following President Trump’s announcement that the United States will withdraw from the Joint Comprehensive Plan of Action (“JCPOA”) and re-impose US sanctions (including secondary sanctions) against Iran, the European Union has chosen to signal its commitment to the continuation of the JCPOA. Readers will be aware that the US has indicated it will be re-imposing secondary sanctions on Iran over the course of the coming months, following two winding-down periods, the first of which ends in August this year, and the second of which ends in November.

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Sanctions and Iran: President Trump’s 8 May 2018 announcement and what this means for non-US shipping

On 8 May 2018, President Trump announced his decision to withdraw the United States from the Joint Comprehensive Plan of Action (JCPOA) and to reimpose on Iran a multitude of sanctions that were lifted in January 2016 under the JCPOA.

This means a significant change to non-U.S. companies’ ability to trade Iran, and has particular relevance to the shipping industry. We summarise below the potential implications of President Trump’s announcement on chartering business, but readers should be aware that the impact on individual spot fixtures and longer-term charterparties, as well as other forms of shipping-related contracts, including ship sale and purchase, contracts of affreightment and brokerage agreements, should be considered on a case-by-case basis.

Ultimately, when looking at your Iran-related trading it will be important to consider your business’ exposure to potential enforcement by the Office of Foreign Assets Control (OFAC) as well as your contractual position vis-à-vis any counterparties.

You can read more about this topic in our client alert here.

Settlement of claims

The Court of Appeal case Khanty-Mansiysk Recoveries Limited v Forsters LLP [2018] EWCA Civ 89 considers the ambit of settlement agreement wording and the extent to which this can cover future claims.

Background facts

Forsters LLP (“Forsters”) were solicitors who had been instructed by Rupert Galliers-Pratt (“RGP”) to assist with preparatory work required to incorporate Irtysh Petroleum plc (“Irtysh”).

Once Irtysh were incorporated, Forsters were also instructed on their behalf to acquire an oil exploration opportunity in Russia. In this respect, Irtysh agreed to buy shares in a company called YBI, which owned 49% of three companies each holding an oil field exploration licence.

Forsters issued an invoice to Irtysh for the sum of £129,853.22 inclusive of VAT. There was a dispute between the parties as to how much of the invoice was in respect of work carried out by Forsters for Irtysh and how much was in respect of work carried out by Fosters for RGP.

Forsters brought a claim against RGP for payment of the invoice pursuant to a guarantee that RGP had given.

The parties subsequently agreed to a settlement by which Irtysh and/or RGP would pay Forsters the sum of £90,000 in return for the action being discontinued, and a settlement agreement was drawn up between Irtysh, Forsters and RGP to this effect.

Clause 2.1 of that Settlement Agreement provided “This Agreement and the terms set out herein shall be in full and final settlement of all or any Claims which the Parties have, or could have had, against each other (whether in existence now or coming into existence at some time in the future, and whether or not in the contemplation of the Parties on the date hereof)”.

The term “Claims” was defined in Clause 1.1 as being “any claim, potential claim, counterclaim, potential counterclaim, right of set-off, or potential right of set off, right of contribution, potential right of contribution, right to indemnity, potential right to indemnity, cause of action, potential cause of action or right or interest of any kind or nature whatsoever, whether known or unknown, suspected or unsuspected, however and whenever arising in whatever capacity or jurisdiction, whether or not such claims are within the contemplation of the Parties at the time of this Agreement arising out of or in connection with the Action or the invoice dated 1 July 2010 addressed to [Irtysh] by [Forsters] and referred to in the Action”.

After the Settlement Agreement had been entered into, Irtysh discovered that it did not own YBI due to the fact that there had not been an actual transfer of shares to Irtysh.

Irtysh subsequently went into liquidation and its claims against Forsters were allegedly acquired by a company called KMR from the liquidators. KMR brought a claim against Forsters in negligence and sought damages in excess of £70 million in respect of the failure to transfer the shares in YBI (“KMR’s Claim”). Continue Reading