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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, 22 January 19
AUSTRALIA'S YANCOAL PRODUCED 50 MMT SALEABLE COAL IN 2018 UP 59 PER CENT ON THE YEAR PRIOR, THE QUARTERLY REPORT SHOWS
According to the report, the miner's quarterly (Q4' 18) saleable coal production of 12.4 Mmt. Includes 10.5 Mmt (85 per cent) from the Comp ...
Monday, 21 January 19
KOSPO INVITING BIDS FOR 320K MT OF LOW CALORIFIC VALUE COAL
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 3,800 kcal/kg NCV low calo ...
Monday, 21 January 19
SUPRAMAX: INDONESIAN COAL RUNS, TONNAGE WAS GIVING APS DELIVERIES AND A 57,000DWT SHIP FIXED AT $7,000 FOR A TRIP TO WEST COAST INDIA - BALTIC BRIEFING
Capesize
A positive end to a week that saw rates on the West Australia/China run slip below $6.00, as charterers faced a plentiful supply ...
Monday, 21 January 19
HARD COAL WORLD TRADE IN 2018 RISES BY 3.7 PER CENT; GLOBAL HARD COAL PRODUCTION INCREASES BY 1.7 PER CENT - VDKI
Global Hard Coal Production Increases By 1.7%.
According to provisional calculations by the German Coal Importer Association (VDKi), ...
Sunday, 20 January 19
OIL MARKET REPORT: A MARATHON, NOT A SPRINT - IEA
Last month, we asked if there was a floor under prices following the signing of a new Vienna Agreement that aims to re-balance the oil market. Foll ...
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- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- ICICI Bank Limited - India
- Parliament of New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- Alfred C Toepfer International GmbH - Germany
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Therma Luzon, Inc, Philippines
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- Coal and Oil Company - UAE
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ind-Barath Power Infra Limited - India
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- Jorong Barutama Greston.PT - Indonesia
- The University of Queensland
- Altura Mining Limited, Indonesia
- Kaltim Prima Coal - Indonesia
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- Borneo Indobara - Indonesia
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Indonesian Coal Mining Association
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Marubeni Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- SMC Global Power, Philippines
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Coal Association
- Vijayanagar Sugar Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Malabar Cements Ltd - India
- Bangladesh Power Developement Board
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- Mjunction Services Limited - India
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Parry Sugars Refinery, India
- Eastern Coal Council - USA
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- Indogreen Group - Indonesia
- India Bulls Power Limited - India
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- Karbindo Abesyapradhi - Indoneisa
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Energy Development Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- GVK Power & Infra Limited - India
- Planning Commission, India
- Minerals Council of Australia
- Riau Bara Harum - Indonesia
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Mercator Lines Limited - India
- Iligan Light & Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- Renaissance Capital - South Africa
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Indika Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Carbofer General Trading SA - India
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- Coalindo Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- McConnell Dowell - Australia
- Independent Power Producers Association of India
- Aboitiz Power Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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