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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, 14 August 20
EIA: COAL PLANTS UNECONOMICAL IN MOST REGIONS - IEEFA
U.S. coal power generation plunged by 30 percent in the first half of 2020 off an already-depressed base, shoved out by natural gas and renewables ...
Thursday, 13 August 20
INDIA SHOULD RECORD A SLIGHT DECREASE IN THERMAL COAL IMPORTS, REACHING A VOLUME OF 167 MILLION TONS BY THE END OF 2020 - ASSOCARBONI
Regarding 2020 thermal coal imports forecasts, Vietnam’s coal imports showed a very strong growth in the first half of 2020 and it is believe ...
Thursday, 13 August 20
INDONESIA REMAINS THE LARGEST EXPORTER OF COAL IN THE WORLD - ASSOCARBONI
According to the last Assocarboni data for 2019, Indonesia remains the largest exporter in the world. Thermal coal exports have in fact reached 456 ...
Wednesday, 12 August 20
VIETNAM WAS THE PROTAGONIST OF A SIGNIFICANT INCREASE IN COAL IMPORTS IN 2019 - ASSOCARBONI
The latest Assocarboni data for 2019 also provide a detailed picture on the trend of the global coal import.
According to Assocarbon ...
Wednesday, 12 August 20
THE COAL MARKET IN ITALY - ASSOCARBONI
Italy, which in 2019 reported a decrease in thermal coal imports, with a volume of 7,5 million tons (-32% compared to 11 million tons in 2018), whi ...
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- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Indian Energy Exchange, India
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- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Directorate General of MIneral and Coal - Indonesia
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- Romanian Commodities Exchange
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- TeaM Sual Corporation - Philippines
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- Parry Sugars Refinery, India
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- SMG Consultants - Indonesia
- Latin American Coal - Colombia
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- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- European Bulk Services B.V. - Netherlands
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- Goldman Sachs - Singapore
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- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- International Coal Ventures Pvt Ltd - India
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- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
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- Port Waratah Coal Services - Australia
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- Wilmar Investment Holdings
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- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
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- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
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- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- The State Trading Corporation of India Ltd
- Anglo American - United Kingdom
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Jaiprakash Power Ventures ltd
- Banpu Public Company Limited - Thailand
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- Merrill Lynch Commodities Europe
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- PowerSource Philippines DevCo
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- Agrawal Coal Company - India
- Parliament of New Zealand
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- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Siam City Cement - Thailand
- Bulk Trading Sa - Switzerland
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
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- Thiess Contractors Indonesia
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Commonwealth Bank - Australia
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Authority, New Zealand
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Aditya Birla Group - India
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Maheswari Brothers Coal Limited - India
- Uttam Galva Steels Limited - India
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- ICICI Bank Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- White Energy Company Limited
- Malabar Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- The University of Queensland
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
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