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Monday, 31 August 20
DEFECTIVE PASSAGE PLANNING: UNSEAWORTHINESS OR A NAVIGATIONAL DECISION? THE CMA CGM LIBRA QUESTION SAILS ON TO THE UK SUPREME COURT - GARD
 KNOWLEDGE TO ELEVATE
The UK Supreme Court has granted leave to appeal the recent decision in Alize 1954 v Allianz Elementar Versicherungs AG (The “CMA CGM LIBRA”). While the decision involved General Average, we discuss the ramifications of the finding of unseaworthiness as it applies to the allocation of risk and liabilities in the wider context of the marine transport of goods.
International law aims to apportion risk in the transport of goods between the ship interests and cargo interests. Simply put, shipowners are responsible for cargo claims caused by unseaworthiness of the ship but are exempt from liability for cargo claims caused by certain risks, including navigational errors. The decision in Alize 1954 v Allianz Elementar Versicherungs AG (The “CMA CGM LIBRA”) [2020] EWCA Civ 293 shifts the established boundary between what is considered “seaworthiness” and “navigation” resulting in shipowners bearing a greater portion of the risk of the adventure. While the CMA CGM LIBRA case involved General Average, it comes as no surprise that decision led to an increase in claims by cargo interests alleging unseaworthiness on the basis of navigational decisions. The vessel owners recently obtained permission to appeal the decision to the UK Supreme Court and the International Group of P&I Clubs supports the vessel owners’ position.
Background to the case
On 17 May 2011, M/V “CMA CGM LIBRA”, a 6,000 TEU container ship, grounded while leaving the port of Xiamen, China. The ship’s charts had failed to record a warning derived from a Notice to Mariners that depths shown on the chart outside the fairway were unreliable and waters were shallower than recorded on the chart. The grounding occurred when the master sailed the vessel outside of the fairway, expecting the waters to be deeper than they actually were. The owners claimed general average contributions from the cargo interests.
The first instance judgment
In Teare J’s first instance decision dated 8 March 2019, he held that the passage plan and working charts were defective due to the failure to record the warning required by the Notice to Mariners, and these defects rendered the vessel unseaworthy at the commencement of the voyage. The owners’ claims were therefore dismissed.
The first instance decision gave rise to significant controversy in maritime law circles. Some commentators held the view that the decision confused issues of unseaworthiness with issues of navigation. They argued that the preparation of passage plans is a matter of navigation, the neglect of which would entitle a carrier to defences under Article IV Rule 2(a) of the Hague or Hague-Visby Rules. By considering passage planning as falling within the orbit of seaworthiness rather than navigation, the court is disrupting the well-established division of risk between the ship and cargo. It has also been commented that applying a strictly temporal approach, i.e. that all acts or omissions prior to the commencement of the voyage relate to seaworthiness may have wider implication to re-distributing risk between the ship and cargo than the question of passage planning.
Other commentators saw the decision as a correct application of principles concerning a carrier’s duties in respect of seaworthiness, based on the traditional definition of seaworthiness laid down in McFadden v Blue Star Line (1905): “Would a prudent owner have required that [the relevant defect] should be made good before sending his ship to sea, had he known of it? If he would, the ship was not seaworthy.” On this view, given that no prudent shipowner would knowingly send his vessel to sea with a defective passage plan and defective charts that had not been properly updated, these commentators argued that it therefore follows that the vessel was not seaworthy at the commencement of the voyage.
The Court of Appeal decision
The first instance judgment was appealed, and for a time, it seemed that the controversy had been resolved following the handing down of the Court of Appeal’s judgment on 4 March 2020. In a unanimous decision by a 3-member panel of experienced shipping judges, the Court of Appeal upheld the first instance judgment. The Court confirmed that errors in navigation or management can render a vessel unseaworthy if they occur prior to the commencement of the voyage. The Court rejected the vessel owners’ argument that the passage plan and working chart were not “attributes of the ship”, but records of navigational decisions taken by the crew.
The Court also found that once the owners assumed responsibility for the cargo as the carrier, all acts of the master and crew in preparing the vessel for the voyage (even if they are acts of navigation performed before or at the commencement of the voyage) are performed qua carrier and not qua navigator. Thus, the owners are responsible for all such acts, and the crew’s failure to exercise due diligence to make the vessel seaworthy would be imputed to the owners.
Leave to appeal to the Supreme Court
In late July 2020, the owners obtained permission to appeal the Court of Appeal’s decision to the UK Supreme Court. The owners’ position remains that the crew’s decision as to what to mark on the chart was a navigational decision rather than an “attribute of the ship” and was therefore not an issue of seaworthiness. It is anticipated that the appeal will take place in late 2021.
Concluding comments
Given the importance of this case regarding the allocation of risk between ship and cargo in a maritime adventure, the International Group of P&I Clubs welcome the UK Supreme Court’s decision to hear the case, and has backed the application made seeking leave to appeal to the Supreme court. Gard will continue to provide updates on developments in this case as they unfold.
Source: Gard
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Friday, 04 September 20
IN A DEEPENING DEBT HOLE OF $34 BILLION, INDONESIA’S PLN MUST STOP DIGGING - IEEFA
The utility has added IDR100 trillion in debt annually for the last five years
Utilities globally started changing the way they do business ye ...
Friday, 04 September 20
KOMIPO INVITED BIDS FOR AUSTRALIAN MIN 5,700 NCV COAL FOR NOVEMBER
COALspot.com: Korea Midland Power Co. Ltd, has issued an International tender for 260,000 MT Min.5,700 kcal/kg NCV coal November, 2020 loading. Acc ...
Thursday, 03 September 20
BRINGING SERVICES OF FTCCI CLOSER TO THE EXPORTERS AT GMR AIR CARGO COMPLEX AT SHAMSHABAD
Press Release: “FTCCI Trade Facilitation Services at your doorstep now” says J.S. Chandrashekar, IRS., Principal Commissioner of Custom ...
Thursday, 03 September 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Wednesday, 02 September 20
COAL PRODUCTION FALLS 7% IN APR-AUG; OFF TAKE DIPS 13.4% - FINANCIAL EXPRESS
In the month of August coal off take also increased 9.3% y-o-y to 44.34 MT as compared with 40.57 MT in the same period last year.
C ...
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- Global Business Power Corporation, Philippines
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- Georgia Ports Authority, United States
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Toyota Tsusho Corporation, Japan
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
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- Commonwealth Bank - Australia
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- Wilmar Investment Holdings
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- Larsen & Toubro Limited - India
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- Electricity Authority, New Zealand
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- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- IHS Mccloskey Coal Group - USA
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
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- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
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- Savvy Resources Ltd - HongKong
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- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
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- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
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- Australian Coal Association
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- Electricity Generating Authority of Thailand
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- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
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- Tamil Nadu electricity Board
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- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- ASAPP Information Group - India
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- Oldendorff Carriers - Singapore
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- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
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- Edison Trading Spa - Italy
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
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- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
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- TNB Fuel Sdn Bhd - Malaysia
- Metalloyd Limited - United Kingdom
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- Leighton Contractors Pty Ltd - Australia
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- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
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- Mercator Lines Limited - India
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