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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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Monday, 26 November 18
SUPRAMAX: THE ASIAN MARKET STALLED THIS WEEK WITH A BUILD-UP OF TONNAGE - BALTIC BRIEFING
Capesize
It was a positive end to the week, with West Australia/China making significant gains and firing owners’ resolve. There was talk ...
Friday, 23 November 18
GOLDEN ENERGY'S POTENTIAL ACQUISITION OF STANMORE CREDIT POSITIVE - FITCH RATINGS
Golden Energy and Resources Limited's (GEAR, B+/Positive) potential acquisition of Stanmore Coal will help the company diversify its coal opera ...
Friday, 23 November 18
ASSOCIATION CALLS FOR REVISION OF DMO SCHEME FOR COAL - JP
The Indonesian Coal Mining Association (APBI) has called on the government to revise the domestic market obligation (DMO) scheme for coal, which re ...
Friday, 23 November 18
INDONESIA'S REVENUES FROM MINERAL AND COAL INCREASE TO US$ 2.858 BILLION - ANTARA
Indonesia`s non-tax state revenues from the mineral and coal sub-sector reached Rp 41.77 trillion (approximately US$ 2.858 Billion) as of Nov 16, 2 ...
Thursday, 22 November 18
SHUT OUT OF CHINA, U.S. COAL EXPORTERS FIND FAVOUR IN INDIA, FOR NOW - REUTERS
U.S. coal exporters have effectively lost a promising market in China since the imposition of tariffs as part of the ongoing trade dispute, but so ...
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- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- Bharathi Cement Corporation - India
- International Coal Ventures Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- Bhatia International Limited - India
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Commodity Traders Exchange
- Romanian Commodities Exchange
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Eastern Coal Council - USA
- Anglo American - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Australian Coal Association
- India Bulls Power Limited - India
- Jindal Steel & Power Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Meralco Power Generation, Philippines
- Energy Link Ltd, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Uttam Galva Steels Limited - India
- SMG Consultants - Indonesia
- PTC India Limited - India
- MS Steel International - UAE
- Xindia Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Banpu Public Company Limited - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Toyota Tsusho Corporation, Japan
- Madhucon Powers Ltd - India
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- Latin American Coal - Colombia
- Planning Commission, India
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- Pendopo Energi Batubara - Indonesia
- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- CIMB Investment Bank - Malaysia
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Karbindo Abesyapradhi - Indoneisa
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Timah Investasi Mineral - Indoneisa
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The University of Queensland
- Savvy Resources Ltd - HongKong
- European Bulk Services B.V. - Netherlands
- Economic Council, Georgia
- South Luzon Thermal Energy Corporation
- Mercuria Energy - Indonesia
- Power Finance Corporation Ltd., India
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Baramulti Group, Indonesia
- Medco Energi Mining Internasional
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Mercator Lines Limited - India
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- Central Java Power - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
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