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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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Wednesday, 06 March 19
SHIPPING MARKET INSIGHT - INERMODAL
In a downward moving market, softer SnP activity is usually a given, as the gap between Sellers’ and Buyers’ ideas widens, especially w ...
Saturday, 02 March 19
A 60,500-TONNER WAS BOOKED DELIVERY SINGAPORE, VIA INDONESIA, REDELIVERY WEST COAST INDIA, AT $11,250 - BALTIC BRIEFING
Capesize
Vale’s ongoing absence from the Brazil spot market continued to have a negative impact on sentiment, with rates falling in all a ...
Thursday, 28 February 19
COAL'S PERFECT STORM HITS $70 BILLION AUSTRALIAN PROJECTS - BLOOMBERG
It’s been a tough few weeks for our coal industry.
First there was a court ruling blocking a new mine on climate change ground ...
Wednesday, 27 February 19
SHIPPING MARKET INSIGHT - INTERMODAL
With the IMO 2020 approaching, it becomes challenging for the market to accurately explore the run-up to the deadline given that marine fuel-oil of ...
Tuesday, 26 February 19
CHINA RESTRICTS SEABORNE COAL IMPORTS - WOOD MACKENZIE
In response to news on China's Dalian port restricting seaborne coal imports, Wood Mackenzie's experts provide the following commentary.
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- Indika Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aditya Birla Group - India
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- MS Steel International - UAE
- TeaM Sual Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- GVK Power & Infra Limited - India
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Chettinad Cement Corporation Ltd - India
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- CNBM International Corporation - China
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- Standard Chartered Bank - UAE
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- White Energy Company Limited
- Orica Mining Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Singapore Mercantile Exchange
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Electricity Generating Authority of Thailand
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- European Bulk Services B.V. - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- ICICI Bank Limited - India
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- VISA Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Vedanta Resources Plc - India
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- Coal and Oil Company - UAE
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- Australian Coal Association
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Interocean Group of Companies - India
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Samtan Co., Ltd - South Korea
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