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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, 21 November 18
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Monday, 19 November 18
INDONESIA'S LEADING EIGHT COAL MINER'S COAL MINING CONTRACTS ARE EXPECTED TO EXPIRE BETWEEN YEAR 2019 - 2025
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Monday, 19 November 18
SUPRAMAX: THE BSI CONTINUED TO FALL LAST WEEK, ESPECIALLY THE ASIAN ROUTES - BALTIC BRIEFING
Capesize
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- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Economic Council, Georgia
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Petron Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Tamil Nadu electricity Board
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- Malabar Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Romanian Commodities Exchange
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement PLC, Thailand
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Kaltim Prima Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Agrawal Coal Company - India
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- Independent Power Producers Association of India
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- Thiess Contractors Indonesia
- Orica Mining Services - Indonesia
- Ministry of Transport, Egypt
- Planning Commission, India
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- Central Java Power - Indonesia
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- Australian Coal Association
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Aditya Birla Group - India
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- PTC India Limited - India
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- Krishnapatnam Port Company Ltd. - India
- The University of Queensland
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Edison Trading Spa - Italy
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indika Energy - Indonesia
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Tata Chemicals Ltd - India
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- GAC Shipping (India) Pvt Ltd
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Parliament of New Zealand
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- Sindya Power Generating Company Private Ltd
- Interocean Group of Companies - India
- The State Trading Corporation of India Ltd
- Savvy Resources Ltd - HongKong
- Mercator Lines Limited - India
- Coal and Oil Company - UAE
- Sree Jayajothi Cements Limited - India
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- Xindia Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
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