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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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Monday, 24 August 20
A COMBINATION OF DEVELOPMENTS DROVE THE FALLOFF COAL PRICES - CHIEF ECONOMIST’ OFFICE, AUSTRALIA
China, rising domestic production combined with subdued power demand;
India, a lockdown coupled with government directives that fav ...
Monday, 24 August 20
AUSTRALIA'S THERMAL COAL EXPORTS ARE FORECAST TO DROP FROM AN ESTIMATED $20 BILLION IN 2019-20 TO $16 BILLION IN 2020-21: REPORT
Thermal coal spot prices have fallen sharply as the impact of COVID-19 drives a contraction in seaborne trade for only the second time this century ...
Saturday, 22 August 20
REPORT SEES INDIA’S RELIANCE ON THERMAL POWER DROPPING TO 50% IN 2021, 43% IN 2026 - ET ENERGY | IEEFA
India’s dependence on thermal power will reduce to 50 per cent by 2021-22 and 43 per cent by 2026-27 on the back of renewable energy (RE) cap ...
Friday, 21 August 20
323 MILLION ELECTRIC VEHICLES WILL BE ON THE ROADS BY 2040 - WOOD MACKENZIE
Electric vehicle (EV) sales are expected to reach 45 million units per year by 2040, with a total global EV stock of 323 million, according to new ...
Friday, 21 August 20
BHP COMMITS TO SELLING ITS THERMAL COALMINES WITHIN TWO YEARS - THE GUARDIAN
Move follows pressure from investors but company stops short of full exit from coalmining
BHP has announced it plans to sell off its ...
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- Indian Energy Exchange, India
- VISA Power Limited - India
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
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- Electricity Generating Authority of Thailand
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- Planning Commission, India
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- Alfred C Toepfer International GmbH - Germany
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- Bangladesh Power Developement Board
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- White Energy Company Limited
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- Heidelberg Cement - Germany
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- Merrill Lynch Commodities Europe
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- Savvy Resources Ltd - HongKong
- Kartika Selabumi Mining - Indonesia
- Economic Council, Georgia
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- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Marubeni Corporation - India
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- Bukit Makmur.PT - Indonesia
- ICICI Bank Limited - India
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ambuja Cements Ltd - India
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- Singapore Mercantile Exchange
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- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
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- Power Finance Corporation Ltd., India
- Price Waterhouse Coopers - Russia
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- Georgia Ports Authority, United States
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Grasim Industreis Ltd - India
- Posco Energy - South Korea
- The Treasury - Australian Government
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- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
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- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
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- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Globalindo Alam Lestari - Indonesia
- Wilmar Investment Holdings
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- Energy Development Corp, Philippines
- Xindia Steels Limited - India
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- Vedanta Resources Plc - India
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
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- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- CNBM International Corporation - China
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- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Orica Australia Pty. Ltd.
- Romanian Commodities Exchange
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Orica Mining Services - Indonesia
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- Siam City Cement - Thailand
- Ceylon Electricity Board - Sri Lanka
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- GVK Power & Infra Limited - India
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
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