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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, 05 December 18
WORLD COAL PRICES FALL, WITH INDONESIA BENCHMARK FOR DECEMBER, ENDING AT LOWEST SINCE JUNE 2018
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 05 December 18
SHIPPING MARKET INSIGHT - GIANNIS ANDRITSOPOULOS
Is the rise in crude carrier rates driven only by seasonality, or is the recent positive reversal signaling the end of challenging days for the mar ...
Monday, 03 December 18
WCA'S ENGAGEMENT AT COP24 IN KATOWICE - WCA
The 24th Conference of the Parties (COP) to the UN Framework Convention on Climate Change (UNFCCC) will take place from the 2-14 December 2018 in K ...
Monday, 03 December 18
SUPRAMAX: FIXED DELIVERY KALIMANTAN TO WEST COAST INDIA, AT $11000 - THE BALTIC BRIEFING
Capesize
A roller-coaster week for the big ships with hopes soaring at the start for a mini last quarter revival, only to be dashed as the week ...
Sunday, 02 December 18
TRADE WAR LEADING TO HEADWINDS FOR THE FRAGILE DRY BULK RECOVERY - PETER SAND, BIMCO
The first twelve weeks of the 2018/19 marketing year, which started on 1 September 2018, have painted a dire picture for US soya bean exports which ...
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- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Madhucon Powers Ltd - India
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- Wood Mackenzie - Singapore
- PTC India Limited - India
- CNBM International Corporation - China
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- Holcim Trading Pte Ltd - Singapore
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Mintek Dendrill Indonesia
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chamber of Mines of South Africa
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Neyveli Lignite Corporation Ltd, - India
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- The University of Queensland
- Africa Commodities Group - South Africa
- Antam Resourcindo - Indonesia
- Thiess Contractors Indonesia
- McConnell Dowell - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Carbofer General Trading SA - India
- Formosa Plastics Group - Taiwan
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Billiton Holdings Pty Ltd - Australia
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Grasim Industreis Ltd - India
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- Jaiprakash Power Ventures ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
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