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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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Saturday, 29 August 20
COAL INDIA'S FUEL SUPPLY TO POWER SECTOR DROPS ABOUT 20% IN APR-JUL: PTI
State-owned Coal India”s fuel supply to the power sector registered a decline of 19.5 per cent to 126.30 million tonnes (MT) in the April-Jul ...
Saturday, 29 August 20
SOUTH KOREAN BROKERAGE FIRM KOREA INVESTMENT & SECURITIES TO STOP ALL COAL BUSINESS - KOREA HERALD
South Korean brokerage firm Korea Investment & Securities has decided to stop its investments in coal, in line with the Moon Jae-in administrat ...
Thursday, 27 August 20
KOREAN GENCOS INVITED BIDS FOR TOTAL 985,000 TONS OF BITUMINOUS COAL FOR NOVEMBER 2020 LOADING
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) on behalf of EWP, KOSPO, KOSEP and KOWEPO has issued an international tender for total 985,000 ...
Thursday, 27 August 20
SOUTHEAST ASIAN NATIONS SET REGION-WIDE RENEWABLE ENERGY GOAL OF 23 PERCENT BY 2025 - ASEAN POST
The Association of Southeast Asian Nations (ASEAN) has set an ambitious target of securing 23 percent of its primary energy from renewable so ...
Thursday, 27 August 20
BANGLADESH POWER MINISTRY SEEKING AUTHORITY TO CANCEL 13,000 MW OF PROPOSED COAL-FIRED CAPACITY - BUSINESS STANDARD
In a bid to move away from dirty energy, the Ministry of Power, Energy and Mineral Resources is seeking the prime minister’s approval to conv ...
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- PTC India Limited - India
- Indonesian Coal Mining Association
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- VISA Power Limited - India
- Energy Development Corp, Philippines
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- Jaiprakash Power Ventures ltd
- Barasentosa Lestari - Indonesia
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- The Treasury - Australian Government
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- Vedanta Resources Plc - India
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Dalmia Cement Bharat India
- Kalimantan Lumbung Energi - Indonesia
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Medco Energi Mining Internasional
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Energy - Thailand
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- San Jose City I Power Corp, Philippines
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- India Bulls Power Limited - India
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- Makarim & Taira - Indonesia
- The University of Queensland
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Bhushan Steel Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ministry of Mines - Canada
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- IHS Mccloskey Coal Group - USA
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Planning Commission, India
- Wood Mackenzie - Singapore
- ICICI Bank Limited - India
- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sojitz Corporation - Japan
- South Luzon Thermal Energy Corporation
- Port Waratah Coal Services - Australia
- Australian Coal Association
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Grasim Industreis Ltd - India
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- European Bulk Services B.V. - Netherlands
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