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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, 13 February 19
SHIPPING MARKET INSIGHT - INTERMODAL
If there is one word that can describe the current shipping environment then that this word is most probably “volatility.” The sentimen ...
Saturday, 09 February 19
SUPRAMAX: A 63,000-TONNER WAS REPORTED FIXED DELIVERY FOR AN EAST KALIMANTAN TRIP, REDELIVERY WEST COAST INDIA, AT $9,250 - THE BALTIC BRIEFING
Cape
The Vale disaster weighed heavily on the market for big ships, with uncertainty about shipments/future exports leading to a sharp drop in ...
Friday, 08 February 19
LOWER-QUALITY INDONESIA EXPORTS ROSE 39 MT IN 2018 YOY PRIMARILY IN RESPONSE TO INCREASED DEMAND FROM CHINA AND INDIA - PEABODY
"Underlying seaborne met and thermal coal conditions remain quite positive and the pace of U.S. coal-fueled power plant retirements is expecte ...
Thursday, 07 February 19
QATAR CAN GAIN FROM DECLINING COAL - THE PENINSULA
With North America and Europe closing down their old coal and nuclear plants, major gas exporters like Qatar can and should gain market share. With ...
Wednesday, 06 February 19
FEBRUARY 2019 INDONESIA'S COAL REFERENCE PRICE FELL 8.83 PERCENT YOY
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
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- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bhushan Steel Limited - India
- Riau Bara Harum - Indonesia
- Makarim & Taira - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- Economic Council, Georgia
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Planning Commission, India
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Simpson Spence & Young - Indonesia
- Star Paper Mills Limited - India
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Wilmar Investment Holdings
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- Madhucon Powers Ltd - India
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Kepco SPC Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Leighton Contractors Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Bukit Baiduri Energy - Indonesia
- Meralco Power Generation, Philippines
- PowerSource Philippines DevCo
- The University of Queensland
- Petron Corporation, Philippines
- Bhatia International Limited - India
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Romanian Commodities Exchange
- Australian Coal Association
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- The Treasury - Australian Government
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- SMG Consultants - Indonesia
- Coastal Gujarat Power Limited - India
- Intertek Mineral Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Sical Logistics Limited - India
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- Mercator Lines Limited - India
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- Renaissance Capital - South Africa
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
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