Emerging Incident: ” Cemfjord ” Vessel Capsized off nr Orkney Islands (3 January 2015)

(“Cemfjord” at sail last year)

 

 

(Capsized “Cemfjord” spotted 3 January 2015)

Vessel: Cement Carrier “Cemfjord” (IMO No. 8403569)

P & I Club: Skuld

GT: 1,850

Build: 1984 (30 years old)

Flag: Cyprus

Operator: Brise Schiffahrts GmbH

Numbers Onboard: 8 crew

Voyage: Aalborg, Denmark – Runcorn, UK.

Incident: It is not yet clear what happened, other than some sudden and unexpected event which seemingly gave no notice for the crew to take to lifeboats, nor allow the Captain to issue a distress call. If the incident had been in say Indonesia, liquefaction may come to mind as a possible cause, but given the stringent controls in place in Denmark this seems less likely. As there does not appear to have been a distress call and as the sailing conditions at the time of loss have been described as ‘pretty, pretty awful’ by the local RNLI, a rogue wave seems the more likely explanation. 

Emerging Incident: ” Norman Atlantic ” Vessel Fire off Corfu (28 December 2014)

Vessel: Ro-Ro Ferry “Norman Atlantic” (IMO No. 9435466)

P & I Club: Gard

Build: 2009

Flag: Italy

Operator: Visemar di Navigazione Srl

Numbers Onboard: 422 Passengers, 56 crew

Voyage: Oatras, Greece – Ancona, Italy.

A Guide to Old / New Procedurel Legal Terms

Old Term – New Term

Action – Claim

Affidavit – Witness Statement

Anton Piller Order – Search Order

Calderbank Offer – Part 36 Offer

Decree Absolute – Final Order

Decree Nisi – Conditional Order

Discovery – Disclosure

Ex Parte – Without Notice

In Camera – In Private

Interlocutory – Interim

Mareva Injunction – Asset Freezing

Plaintiff – Claimant

Pleadings – Statement of Case

Subpoena – Witness Summons

Writ – Claim Form

How to Resolve a Maritime Dispute?

The Risks of Trading in the Ukraine

Many shipowners are asking at present – what are the risks of trading in the Ukraine in the current circumstances?

Well apart from the dangerous security situation in the eastern and southern provinces, the principal risk is that of breaching the US and western sanctions. The full sanctions of the US are available here but in short, in response to events in the region in 2014 there were three rounds of international sanctions, both from the US and the EU and other western nations (Australia, Switzerland, Japan etc.). Most of these actions were restrictions on Russian individuals, companies and banks from trading, travelling etc. but some of the sanctions are so far reaching that, in order to ensure no breaches occur, a party trading with or in Ukraine must essentially choose to either trade with Crimea (now under Russian control) or with the remainder of Ukraine (Odessa or Kiev for instance).

If you move between a contested region and government controlled Ukraine, especially if you transport cargo between the two, you will be at risk of sanctions related penalties, vessel seizures and potentially confiscations. The risk is especially strong trading from Crimea to Odessa and there are reports of an increase in vessel arrests in the region generally. Shipowners beware.

Which Countries are Currently Under US Sanctions?

A reader wrote in to ask which countries,  other than Iran and North Korea, they should be wary of trading with because of potential US Sanctions problems; as they are just about to enter a contract with a US entity and want to ensure compliance with all US regulations. The answer is an awful lot of countries.

The USA currently sanctions involving the following countries and regions of the world:

– Balkans
– Belarus
– Burma
– Central African Republic
– Cuba
– Democratic Republic of Congo
– Ivory Coast
– Iran
– Iraq
– Lebanon
– Moldova (Magnitsky sanctions)
– North Korea
– Russia
– Somalia
– Sudan
– South Sudan
– Syria
– Ukraine
– Yemen
– Zimbabwe

The content of these sanctions differs from country to country and some are extra-geographic (not country specific), such as the diamond trade sanctions and restrictions on criminal organisations, however, it is important to ensure compliance in the above regions, particularly when trading in US Dollars.

The Maritime Labour Convention 2006: A basic guide to liabilities

The Maritime Labour Convention 2006 (MLC) is a new Convention which aims to bring together and update existing conventions regarding the employment of seafarers onboard commercial ships worldwide. Although there is much discussion about the Convention, and the document itself runs to over 100 pages, the principal new obligations regarding minimum standards in respect of liability can be simply summarised as follows:

1. NOTICE PERIODS
– Minimum of 7 days.

2. SICK WAGES
– Minimum of 16 weeks (4 months).

3. REPATRIATION
– You must repatriate seafarers in the event of:
a) termination or expiry of their employment,
b) ship’s loss or foundering,
c) illness or injury or otherwise being unable to continue in their role,
d) ship’s entry to a war zone and seafarer exercises option to leave,
e) in the event of the shipowner being unable to fulfil their obligations as employer.

3. FINANCIAL SECURITY
– You must have financial security’ in place, to meet your liability to repatriate crewmembers and pay them any compensation due in the event of your inability to do so (for instance, even payable when you are insolvent).
– This is not a ‘compulsory insurance’ like CLC or Bunker Convention, but if you cannot prove (by lodging a bond to cover these costs or by showing ringfenced funds in some other way) that these costs would be met, then you will need to buy insurance to respond in these situations. If you have an International Group Mutual P&I Certificate that will do, otherwise you may need to buy an ‘MLC top-up’ insurance to add onto your commercial P&I Certificate.

4. SEAFARER EMPLOYMENT AGREEMENTS (SEAs)
– You must put certain basic things in the seafarer’s employment contracts.
– You can use a pro-forma MLC-compliant contract called a Seafarer Employment Agreement or you can use your own contract so long as it contains all the minimum information required.

2014 EASING OF IRAN SANCTIONS

For years ship owners worldwide have had one principal country they are sure they need to avoid dealings with to remain on the right side of the law and their insurers, Iran. This country also happens to have a wealth of potential imports / exports and a huge oil industry, so there was always plenty of work available for ships in the region, had they only been able to take it up. The time has now come for the demand tap to be gradually turned back on.

The US,  five other major powers (UK, France, Germany, Russian and China) and the EU have now announced (20 January 2014) that they will begin easing sanctions against Iran and even providing relief to the country. This is in response to actions by Iran to wind down its ability to enrich uranium (and potentially develop nuclear weapons – the source of the sanctions to begin with).

Some sanctions are being suspended for 6 months, with the promise of them and others being lifted permanently if a final agreement can be reached between Iran and the countries on its cessation of uranium enrichment.

The sanctions which are now suspended are significant and include temporary lifting of financial sanctions, and restrictions on the buying and selling and associated services related to Iran’s ‘petrochemical products’ (products derived from petroleum or oil, i.e. processed products). However, it must be noted that some of the highest-level sanctions remain in place in the meantime as normal, such as the block on buying Iranian crude oil and the freezing of the bank accounts of companies associated with the Iranian oil industry.

The full detail and guidance documents on the latest agreement is available here.

How can I ensure that the Hague Visby Rules will apply to my Bills of Lading?

The Hague Visby Rules (HVR) provide a basic standard for carriage of cargo terms, and they are critical for shipowners in maintaining cover with their P&I Clubs as they must not contract on terms less favourable than the HVR. This is because the HVR contain exclusions, limitations and provisions which protect the shipowner. However, the Rules do not automatically apply so a shipowner must ensure they do apply to the cargo he is carrying by issuing Bills of Lading in the proper format. The following are the main points to remember in this respect.

1. CLAUSE PARAMOUNT
Article Ten (X) of the HVR states that the Rules apply to ‘ … every bill of lading relating to the carriage of goods between ports in two different States if:(a) the bill of lading is issued in a contracting State, or(b) the carriage is from a port in a contracting state, or (c) the [bill of lading] provides that [they will govern the contract].

Therefore if neither (a) or (b) apply you need to ensure your Bill of Lading contains a ‘Clause Paramount’, i.e. a contractual term stating that the Bill is to be governed by the Hague Visby Rules.

2. DOCUMENT OF TITLE
The Rules only apply to Bills of Lading, not Sea Waybills, not Ships’ Delivery Orders or other such documents, so you need to ensure you are issuing Bills of Lading. In general case law around the world has held that in order to be a Bill of Lading the Bill need not be negotiable (transferable / marked to order etc.); it can be a ‘straight’ Bill of Lading for instance to a fixed named consignee, but it must be a ‘document of title’, in other words possession of the original copy must evidence ownership of the goods and the Bill must be one which needs to be presented to obtain delivery of the goods. 


3. EXCLUDED CARGOES
If you are carrying live animals or deck cargo (which is stated as and in fact carried on deck) then the rules will not apply in any case as these are exclusions from the HVR application by virtue of Article I of the HVR.


4. ENGLAND & WALES
In the UK the Carriage of Goods by Sea Acts (1971 and 1992) alter some of the HVR application. They extend the remit of the act to carriage of goods from port to port within the UK (rather then between ports in two different states as per HVR) and they extend the rights of action against the carrier to the lawful holders of Bills of Lading, Sea Waybills and Ships’ Delivery Orders. 

CONTRACT WORDING: ‘including, without limitation…’

Ship owners benefit from a range of limitation conventions and contractual limitations and often their insurances (especially P&I Cover) will be prejudiced in the event that they optionally waive those rights to limitation, so careful attention to contract wording is essential.

A contract which seeks to have the ship owner waive his rights will normally include an express term to that effect, i.e. ‘the owner hereby agrees to waive their right to limit under the LLMC Conventions, CLC Conventions or any other …’ or ‘the Owner shall pay claims for damage to Charterers property arising under this contract in full and without limitation‘.

This language is not to be confused with the phrase from american legalese which is now common in many commercial legal contracts worldwide – ‘the Owner agrees to indemnify / settle … including, without limitation, claims for x, y, z.‘. Some have argued that this may be construed as an agreement to settle those specific listed claims without limitation, but this is not the case. This arrangement of words merely means ‘included but not limited to‘.

For example, if a ship owner agrees to pay the Charterers claims for losses resulting from the ship owner’s crew’s negligence including, without limitation, claims for pollution, property damage and third party injury, then those types of claims resulting from the ship owner’s crew’s negligence are definitely to be met by the shipowner, but this does not limit or prevent the Charterer from also claiming for other types of claims resulting from the ship owner’s crew’s negligence. Any application of limitation conventions is unaffected by the clause.

Another confusing phrase which is used in the same context is ‘without limitation to the generality of the foregoing‘ or ‘without prejudice to the generality of the foregoing‘, which merely means where you express a rule then give some examples, the examples cannot be said in any way to weaken or restrict the general rule which stands as if the examples had not been given.