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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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Tuesday, 29 January 19
CHINA HAS BEEN THE TOP DRIVER OF GLOBAL GROWTH FOR NEARLY TWO DECADES - ALLIED
China has been the top driver of global growth for nearly two decades now, pushing demand for seaborne trade and being the key influencer for deman ...
Saturday, 26 January 19
SUPRAMAX: NICKEL ORE RUNS SAW A 56K DWT VESSEL, DELIVERY PHILIPPINES, FIXED FOR A TRIP TO CHINA AT $6K - BALTIC BRIEFING
Capesize
A week of dashed hopes for owners as the optimism evident the previous week evaporated. Rates slipped on all routes and underlying thr ...
Thursday, 24 January 19
ANOTHER DISAPPOINTING WEEK FOR PANAMAX OWNERS; MARKET CONTINUES DOWN IN BOTH BASINS - FEARNLEYS
Capesize
The week has been marked by low activity and dropping rates in both basins. As usual, supply additions have increased at the beginning ...
Thursday, 24 January 19
KOREA SOUTHERN POWER INVITED BIDS FOR 960K 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 ...
Tuesday, 22 January 19
9TH GLOBAL MANUFACTURING SUPPLY CHAIN INNOVATION SUMMIT 2019
Rethinking the supply chain in manufacturing is a must at the digital era along with the industry transforming and innovating; new manufacturing is ...
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- Aboitiz Power Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- Africa Commodities Group - South Africa
- New Zealand Coal & Carbon
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- VISA Power Limited - India
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- The Treasury - Australian Government
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Marubeni Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- White Energy Company Limited
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Indonesian Coal Mining Association
- Power Finance Corporation Ltd., India
- Sindya Power Generating Company Private Ltd
- Grasim Industreis Ltd - India
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- Bhatia International Limited - India
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- Eastern Coal Council - USA
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Sical Logistics Limited - India
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Malabar Cements Ltd - India
- GMR Energy Limited - India
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- SMC Global Power, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Therma Luzon, Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- European Bulk Services B.V. - Netherlands
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- Australian Coal Association
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- SMG Consultants - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- CIMB Investment Bank - Malaysia
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
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