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Sunday, 07 April 19
SHIP PASSAGE PLANS - NO ROOM FOR ERROR! - WATSON FARLEY & WILLIAMS
 KNOWLEDGE TO ELEVATE
The English High Court’s judgment in Alize 1954 v Allianz Elementar Versicherungs AG (The CMA CGM Libra) is an important decision involving the application of longstanding principles as to a shipowner’s liability for actionable fault following a casualty. In finding that a defective passage plan rendered a vessel unseaworthy, the English High Court has demonstrated how traditional tests will be applied to update the law into the modern day world.
Prior to this decision, there had been no case whereby a defective passage plan rendered a vessel unseaworthy. However, it is now clear that just as the standard of seaworthiness must rise with improved knowledge of shipbuilding, so must the standard of seaworthiness rise with improved knowledge of the documents required to be prepared to ensure safe navigation. Following the IMO’s recognition in 1999 of the need for passage planning to be adopted by “all ships engaged on international voyages”, The CMA CGM Libra shows that by 2011 the English courts expected an adequate passage plan to have been prepared. If it was defective, the consequences could be severe.
The Case
The case concerned a laden container vessel which grounded by virtue of the master negligently navigating outside of the buoyed fairway when leaving the port of Xiamen in China. The owner had known this to be a difficult port to navigate, especially as various Notices to Mariners had been issued advising that areas existed in the Xiamen Gang (though not in the fairway) that had depths less than those charted.
Cargo interests refused to pay the owner their proportion of the total claim in general average and denied liability under Article III r.1 of the Hague Rules on the basis that the casualty was caused by the owner’s actionable fault. In particular, they alleged that the vessel was unseaworthy because she had an inadequate passage plan, that inadequacy was a cause of the casualty and due diligence was not exercised by the owner to make the vessel seaworthy.
The Decision
Before considering the substantive matters of unseaworthiness, causation and due diligence, Mr Justice Teare addressed the issue of which party bears the burden of proof in relation to Article III r.1. He affirmed the conventional view that the burden lies on the cargo interests to establish that the vessel was unseaworthy and such unseaworthiness caused the grounding. If those matters are established, the burden then lies on the owners to prove that due diligence was exercised to make the vessel seaworthy.
Unseaworthiness
Mr Justice Teare held that neither the formal passage plan, nor the working chart, contained the necessary warning of the potential danger arising outside the buoyed fairway from the existence of areas with lower depths than charted. The necessary warning should have been such that, when the navigator was faced with a decision whether to remain in the buoyed fairway or to navigate outside, he had in mind the warning that charted depths outside the buoyed fairway may be unreliable.
The judge affirmed that the long-established and authoritative test of unseaworthiness is whether a prudent owner would have required the relevant defect, had he known of it, to be made good before sending his ship to sea. He found it inconceivable that a prudent owner would allow the vessel to depart from Xiamen with a passage plan that lacked the necessary warning, especially given that IMO Resolution of 1999 states that a “well planned voyage” is of “essential importance for safety of life at sea, safety of navigation and protection of the marine environment”.
The owner argued that passage planning is simply the preparation for safe navigation and is not itself an aspect of seaworthiness. In making these arguments, the owner sought to benefit from the negligent navigation exception under Article IV r.2(a) of the Hague Rules, which provides that (assuming there is no failure by the owners to make the vessel seaworthy) a shipowner will not be responsible for loss caused by neglect in the “navigation or in the management of the ship”.
However, Mr Justice Teare rejected this, stating that seaworthiness extends to having the appropriate documentation on board, including the appropriate charts. Firstly, he noted that Article III r.1 places a seaworthiness obligation upon the shipowner “before and at the beginning of the voyage” and that passage planning before the beginning of the voyage is necessary for safe navigation during voyage. Secondly, he pointed out that it is well recognised that if a vessel’s charts are not up to date that is an “attribute” of the vessel which can render her unseaworthy – and that a proper passage plan is now like an up to date and properly corrected chart.
Mr Justice Teare also suggested that a “one-off” failure to correct a chart in a material manner before the beginning of the voyage is capable of rendering a vessel unseaworthy, even if the shipowner has put in place proper systems to ensure that the prerequisite materials were on board to prepare an adequate chart. He explained that concentrating upon the shipowner’s own actions to the exclusion of those of his servants or agents, confuses the issue of seaworthiness with the issue of due diligence, which in any event is a non-delegable duty.
Finally, Mr Justice Teare observed that the negligent navigation exception applied only to Article III r.2 and not Article III r.1. Therefore, a shipowner will not be protected from liability for failing to exercise due diligence to make the vessel seaworthy by the fact that a cause of the casualty was negligent navigation.
Conclusion
In conclusion, this case found that an appropriate passage plan is a matter of seaworthiness under Article III r.1 of the Hague Rules. This is not the type of chart that might traditionally have been expected to affect the seaworthiness of a vessel, especially as a passage plan relates principally to navigation of the ship. Nevertheless, following this judgment, shipowners will have to ensure that, through its agents and servants, due diligence is exercised to produce a non-defective passage plan that clearly contains the necessary warnings. Failure to do so, if causative of a casualty, will not be saved by the negligent navigation exception under Article IV r 2(a) of the Hague Rules, which cannot be applied where a shipowner has failed to exercise due diligence to make the vessel seaworthy.
Source: Watson Farley & Williams
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Friday, 08 March 19
KOMIPO INVITES BIDS FOR 2.6 MILLION TONS OF AUSTRALIAN 5700 NAR COAL FOR FIVE YEARS
South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 520,000 MT of min. 5700 NAR coal of Australian origin to be burnt ...
Friday, 08 March 19
CHINA'S COAL DEMAND FORECAST TO DROP SLOWLY - YONHAP
China’s coal demand is expected to fall at a snail’s pace over the next 20 years due to the country’s preference for the cheap fo ...
Thursday, 07 March 19
INDONESIAN COAL PRICE REFERENCE PLUNGE TO LOWEST IN SEVEN MONTHS
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 06 March 19
KOSPO INVITES BIDS FOR 80,000 MT OF 3800 NCV COAL FOR 21 - 30 MARCH, 2019 LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 80,000 MT of min 3,800 kcal/kg NCV low calor ...
Wednesday, 06 March 19
KOREA SOUTHERN POWER CO INVITES BIDS FOR 980,000 MT OF 4600 NCV COAL FOR THREE YEARS
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 4,600 kcal/kg NCV low calo ...
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- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Madhucon Powers Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- Sindya Power Generating Company Private Ltd
- Malabar Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Videocon Industries ltd - India
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- White Energy Company Limited
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Power Finance Corporation Ltd., India
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Timah Investasi Mineral - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Australian Coal Association
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Makarim & Taira - Indonesia
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- PowerSource Philippines DevCo
- Economic Council, Georgia
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- Uttam Galva Steels Limited - India
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- Cigading International Bulk Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- Meenaskhi Energy Private Limited - India
- Tamil Nadu electricity Board
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- Gujarat Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Interocean Group of Companies - India
- Planning Commission, India
- Toyota Tsusho Corporation, Japan
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Karbindo Abesyapradhi - Indoneisa
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- Thiess Contractors Indonesia
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
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