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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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Wednesday, 26 August 20
ASIAN COAL PRICES LIKELY TO REMAIN DEPRESSED SAY TRADERS, ANALYSTS - REUTERS
Asian coal prices, which have fallen around 25% this year as power demand slumped due to the coronavirus outbreak, are unlikely to move higher befo ...
Wednesday, 26 August 20
WORLD COAL EXPORTS: INDONESIAN THERMAL COAL EXPORTS HAVE COME UNDER PRESSURE AS THERMAL COAL PRICES WEAKEN - REPORT
Indonesia’s exports to decline sharply from record highs
Indonesia is the world’s largest thermal coal exporter, sellin ...
Wednesday, 26 August 20
JAPAN'S COAL IMPORTS ARE BEING AFFECTED BY COMPETING INFLUENCES - REPORT
Japan is the world’s third largest thermal coal importer, importing an estimated 135 million tonnes of thermal coal in 2019. The country&rsqu ...
Wednesday, 26 August 20
PENDING SOUTH KOREA LEGISLATION COULD FORCE HALT TO COUNTRY’S COAL PLANT EXPORT DEALS - KOREA ECONOMIC DAILY
South Korea’s parliament looks set to pass new legislation to ban financing on foreign coal power projects, putting all overseas coal-fired p ...
Tuesday, 25 August 20
INDIA'S IMPORTS FALL AS LOCKDOWNS IMPACT THE POWER AND INDUSTRIAL SECTORS - REPORT
India is the world’s second largest thermal coal consumer and importer, importing an estimated 211 million tonnes of thermal coal in 2019.&nb ...
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- Bangladesh Power Developement Board
- Siam City Cement PLC, Thailand
- Manunggal Multi Energi - Indonesia
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- London Commodity Brokers - England
- Deloitte Consulting - India
- Directorate Of Revenue Intelligence - India
- Port Waratah Coal Services - Australia
- The University of Queensland
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Ministry of Transport, Egypt
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Standard Chartered Bank - UAE
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Thiess Contractors Indonesia
- Singapore Mercantile Exchange
- Petrochimia International Co. Ltd.- Taiwan
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Global Green Power PLC Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- White Energy Company Limited
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- LBH Netherlands Bv - Netherlands
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Iligan Light & Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- Economic Council, Georgia
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Borneo Indobara - Indonesia
- PTC India Limited - India
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- Australian Coal Association
- Intertek Mineral Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Sarangani Energy Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- Riau Bara Harum - Indonesia
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Bulk Trading Sa - Switzerland
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- Kaltim Prima Coal - Indonesia
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Central Electricity Authority - India
- Australian Commodity Traders Exchange
- Metalloyd Limited - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jorong Barutama Greston.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Krishnapatnam Port Company Ltd. - India
- PNOC Exploration Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Meenaskhi Energy Private Limited - India
- CNBM International Corporation - China
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