1. Asbestos Claims in the US
2. OW Bunkers Ruling
3. Compulsory Pilotage Explained
4. Practical P&I Masterclass
5. Plotting Wealth and Health in the World over 200 Years
6. People and Places
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1. Asbestos Claims in the US
The US Court of Appeals for the Fifth Circuit affirmed
the remand to state court of claims arising from plaintiffs’ alleged
exposure to asbestos aboard vessels operated or owned by the various
defendants. Bartel v Alcoa Steamship Company, No. 1530004 (5th Cir.,
October 19, 2015)
http://www.ca5.uscourts.gov/opinions/pub/15/15-30004-CV0.pdf
2. OW Bunkers Ruling
Nick Shepherd & Paul Herring of Ince&Co comment on the case:-
(1) PST Energy 7 Shipping LLC and (2) Product Shipping & Trading
S.A. v. (1) O.W. Bunker Malta Ltd and (2) ING Bank N.V [2015] EWCA Civ
1058
In the judgment handed down on 22 October 2015, the Court of Appeal
has upheld the Commercial Court decision of 14 July 2015″that a
contract for the sale of goods, where there is a credit period and a
retention of title (“ROT”) clause, coupled with an express
(or even implied) right to consume the goods during the credit period,
is not a contract of sale within the scope of the Sale of Goods Act
1979 (“SOGA”), at least so far as bunkers are consumed during
the credit period”.
The Court of Appeal has held that the essential nature of the contract
was an agreement under which bunkers are to be delivered to the owners
as bailees with a licence to use them for the propulsion of the vessel,
coupled with an agreement to sell any bunkers remaining at the date
of payment, in return for a money consideration which in commercial
terms can properly be described as the price. In the Court’s view,
the owners did not contract for the transfer of property in the whole
of the bunkers, and only contracted for the delivery of a quantity of
bunkers which they had an immediate right to use but for which they
would not have to pay until the expiry of the credit period. The Court
has adopted a hybrid contract analysis.
Read more about this judgment and its significance here.
This is a disappointing decision for the maritime industry and has
wide reaching consequences for other industries such as manufacturing,
petrochemical and any other industry where consumable goods are sold
on credit terms, together with a ROT clause and a right to use the goods
pending payment.
If the essential nature of the contract was that the buyer would acquire
only a licence/permission to use the bunkers, it is surprising that
this is not expressed in much clearer terms in the bunker supply contract.
Commercially, it is doubtful that shipowners and charterers would knowingly
agree to pay the amounts involved in bunker purchases for a mere licence
to use the bunkers.
If the decision is not reversed, it seems likely that the standard
industry forms will have to be amended to make it clear that the permitted
consumption of bunkers during the credit period is not intended to take
the transaction outside the scope of SOGA. In our experience, purchasers
of bunkers are already taking measures aimed at achieving that outcome
or equivalent protection.
Whether the protection afforded under SOGA is available to the buyer
now depends on pure serendipity, such as the length and speed of voyages
performed during the credit period. The transaction falls within SOGA
if the vessel bunkers and immediately thereafter spends a long time
in port due to congestion, but is outside if the vessel performs a long
laden voyage shortly after bunkering. Such commercial uncertainty seems
unlikely to reflect the parties’ true intentions.
———–
The learned Court’s ruling has produced a rare response on policy implications
from the UK Defence Club:-
The Court of Appeal’s judgment in relation to the dispute between
the owners of the RES COGITANS and OW/ING was handed down on 22nd October,
2015. In this case the Court effectively held that although the contract
as between the owner and OW had all the hallmarks of a sale contract,
the Sale of Goods Act did not apply.
The Court considered that: “It is a contract under which goods
are to be delivered to the owners as bailees with a licence to consume
them for the propulsion of the vessel, coupled with an agreement to
sell any quantity remaining at the date of payment, in return for a
money consideration which in commercial terms can properly be described
as the price.”
Responding to the judgment, Kieron Moore, Senior Director of Claims
for the UK Defence Club, says:
“Under this reasoning, as the bunkers had been consumed, the Member
was obliged to pay for the bunkers as licensee, notwithstanding a retention
of title clause in the underlying contract.
“As a consequence, an owner may be obliged to pay twice for the
same bunkers.
“What the judgment fails to positively address is what occurs
if some of the bunkers remain unconsumed: does the Sale of Goods Act
apply in those circumstances?
“The Court of Appeal judgment seems to suggest that it would in
certain circumstances. What if the bunkers are found to be defective
after some have been consumed?
“What we have here is a decision which, far from providing clarity,
raises more questions than answers and we believe the industry deserves
better.”
3. Compulsory Pilotage Explained
Barrie Youde writes:-
The Rot Remains
Rights, obligations, powers and duties are the bedrock of any civilization.
Whenever a person has both the power and the right to impose his will
on another, the law requires (as matters of both obligation and duty)
that he does so with probity. Whenever a person has both the power and
the right to impose his will on the entire general public, he is required
to exercise those things (if at all) not merely with probity but with
the utmost of probity. The requirement in those circumstances is strict
and onerous (Department for Transport Report, April 2002). Otherwise,
acute disorder arises.
A simple example of the obligation which counterbalances the exercise
of any right lies in everyday life at a traffic roundabout, where the
law requires traffic to give way to others approaching from the right.
Those others approaching from the right-hand side have both the power
and the legal right to require others to yield right of way. At the
same time, in granting such a privilege to those who approach from the
right, the law requires that they themselves continue to comply with
the law. The motorist who approaches a roundabout at twice the legal
speed limit, expecting other members of the public approaching from
the left nonetheless to grant him right of way, is granted no immunity
in the Courts in respect of his breach of the speed limit; and woe betide
him should a collision occur. His pleaded case that he had right of
way would help him very little. His right of way is conditional upon
his obedience to the law in other respects. Likewise the man who exercises
his right to light a bonfire in his garden must expect legal consequences
in respect of any smoke which he might impose on his neighbours. Similarly
a headmaster who directs all things and all persons in his school is
obliged to do so properly. Wackford Squeers should expect to hear from
Inspector Knacker quite soon. And a sober shipmaster, widely understood
to be sole Master after God, understands full well his obligation to
comply with the law in every respect. Following all of this, every journalist
knows that Her Majesty’s government itself is not above the law.
Neither is any individual member thereof. Nor is anybody else.
Wherever a harbour authority imposes compulsory pilotage on the general
public it is obliged as a matter of criminal law to do so with the utmost
probity (THE SEA EMPRESS, 1999). Specifically, “the highest possible
standards” are called for. This obligation arises not merely as
a matter of public safety but also because any harbour authority enjoys
much immunity from civil liability by operation of the provisions of
Section 16 of the Pilotage Act 1987. In those circumstances the opportunities
for financial impropriety and the making of a fast buck at public risk
by any commercially minded harbour authority are both real and obvious.
Serial failures in the Department for Transport in taking any steps
to maintain probity amongst harbour authorities were reported in Maritime
Advocate 620 (30th January 2015). It is unfortunate now to report that
on 12th August 2015 a representative of HM government confirmed its
consensuality in the conduct of a harbour authority which has chosen
to reduce its regulated standards (which were determined as recently
as 2008) for its own financial gain in an area where at the same time,
nothing daunted, it continues to impose compulsory pilotage on the general
maritime public. Reports have been sent to the public prosecuting authorities.
Patience be my friend.
4. Practical P&I Masterclass
P&I insurance is critical to the business of shipping and risk
management. The SeaProf/IBC P&I Masterclass focuses on Optimising
Cover, Casualty Control, Claims Defence and Settlement and Loss Prevention.
It will equip maritime professionals with a sound working knowledge
of P&I insurance, including choosing a P&I Club, the scope of
P&I cover, the exclusions to be aware of, security arrangements,
defence, claims settlement and loss prevention.
The course will be led by Capt Robert E. Gordon, LLB, LLM, Master Mariner,
Solicitor and Chairman of SEAsia P&I Services.
For more information on the P&I Course simply contact Ms. Yan Salleh
at SeaProf:-
For course information, click below for the IBC Course Brochure:-
http://seaprof.com/wp-content/uploads/2015/10/Practical-PI-Masterclass-OCCLP-Brochure.pdf
5. Plotting Wealth and Health in the World over 200 Years
This clip of film shows an arresting way of presenting a large amount
of data. It would be interesting to see shipping and international trade
data over a long term period presented along these lines. Were it not
for Dr. Stopford, degrees of historical deaf dumb and blindness in shipping
might be far worse.
https://www.youtube.com/watch?v=jbkSRLYSojo
6. People and Places
Captain John Lloyd MBA AFNI has been appointed to the newly created
post of Chief Operating Officer.
Captain Lloyd will have overall responsibility for business development,
personnel and product management of the accreditation and certification
department, reflecting the increasing demand from industry for training
services. He will lead a 20-strong team dealing with accreditation and
certification and will be actively involved in other training schemes.
His main focus will be oversight of the industry-standard dynamic positioning
operator (DPO) certification, which the Institute manages on behalf
of stakeholders.
John joins the Institute from the Australian Maritime College (AMC)
in Tasmania where he is a Professor in the National Centre for Ports
and Shipping. During his seven years at AMC he had a two years leave
of absence to set up the Angolan Maritime Training Centre. Before joining
AMC he spent two years working in the Vanuatu Maritime College.
John’s varied career prior to these appointments included four years
in senior positions with Flagship Training in the UK, 10 years with
Warsash Maritime Centre as a senior and principal lecturer in simulation
and operations, and two years as a marine pilot in Walvis Bay. He served
at sea from 1975 for 16 years, gaining command in 1987.
———-
Bibby Ship Management is delighted to welcome Sanjiv Wagh as Deputy
Managing Director of its India offices.
With over 30 year’s industry experience, Mr Wagh joins Bibby Ship
Management from Kongsberg where he was General Sales Manager for Kongsberg
Maritime India. During his time with Kongsberg, he occupied a number
of roles covering research and development, ship simulation and analytics.
Mr Wagh joins Bibby Ship Management India handling the support functions
and other operational areas within each local business.
———-
Inchcape Shipping Services (ISS) is opening four new offices in Brazil
following a new partnership with fertiliser specialist, Nelson Guilloux.
With over 40 years’ experience in the shipping industry including
10 years in the fertiliser market, Mr Guilloux is working with ISS Brazil
to combine expertise and presence in the sector.
Following the new partnership, ISS Brazil has created a dedicated team
to attend fertiliser ship calls in all Brazilian ports and will open
four more offices across the country to expand its services. Three offices
will open in the southern region in Paranagua, Rio Grande and Porto
Alegre – while a further office will open in Recife in the northeast,
taking its total offices in the country to 14.
Offering greater value and expertise to this specialist market, the
dedicated ISS fertiliser team will manage all operations and processes,
while a market intelligence department will provide customers with a
range of tools including comparative port information, monthly reports,
port alerts and customised analysis.
Brazil imported more than 24,000 million tons of fertiliser in 2014,
mainly from the USA, Russia, Morocco and Canada, giving rise to around
1500 vessel calls to mostly southern ports. ISS Brazil recently attended
two ships discharging fertiliser at Hermasa Terminal, Itacoatiara, in
the Amazon region.
———-
Braemar (incorporating The Salvage Association) has announced the appointment
of Brian Armour as Senior Maritime Civil Engineer within its Ports &
Harbours division.
Brian will be based in the Singapore office and has many years’
experience in the design, analysis and construction of jetties and port
structures in Australia and Asia. He will focus on providing advice
on dock damage cases, and on berth safety disputes, on behalf of P&I
Clubs, insurers and marine solicitors. He will, in addition, assist
in the further development of Braemar SA’s Ports & Harbours
consultancy services.
From the Avo Archive
The website of this newsletter contains all the editorial material
since the inception of the Maritime Advocate as a print based quarterly
in 1997 under the founding aegis of John Guy, Chris Hewer and Manfred
Arnold. Readers can go to the site and search the database on the home
page in its entirety. If you are looking for an old case, an old controversy
or you would just like to see how many times you and your firm have
featured in our annals feel free to access the archive. It is like this
e-zine, free to Readers and we always appreciate the support of advertisers
and sponsors.
Searching for references to FDD Clubs, which were rather few, we ran
across this small piece from Issue 428 of March 18th 2010 which remarks
on the gerontocratic bind maritime arbitration has got itself into in
recent decades. Like the government of China, arbitration has its own
immortal generation.
Arbitrators Gather in London
Many notable names gathered this week in London to celebrate the 50th
Anniversay of the London Maritime Arbitrators Association. 50 years
ago arbitrations were handled in a different way. The P&I Clubs
would prepare the arbitration submissions and the arbitrators would
rule, sometimes over a collection of cases. This procedure looks more
like the modern way of preparing cases for FDD Club Directors’ Meetings
using agenda notes prepared by Club officials. You need to be quite
old to remember this way of working and at least one speaker pointed
out that there were few recognised arbitrators who were under 50 these
days. The Club link with arbitration was well represented at the various
occasions with many figures from the industry conferring. We saw David
Martowski, from the New York end of the business, David Martin-Clark
who has spent his post Club days on ADR and arbitration as well as working
as a barrister. Nick Sansom was present, and representing the newer
wave of Singapore Arbitration. Peter McQueen who spent his legal career
as an advisor to the Clubs in Australia is known these days as a moving
force behind Australian arbitration. This neatly illustrates how the
area of maritime arbitration has moved from a few offices and meetings
in London to competing centres in many places where maritime affairs
are followed closely. The Conference and the Dinner were generally deemed
well worth while, and much time was spent considering what should follow
in the future so far as concerned costs, procedures, the changing of
the generations and the competing cultural and legal systems on offer.
More of these in later editions.
http://www.avoarchive.com/searchBI.php
Sick Notes
A “study” by CareerBuilder asked employers to relate the
“most absurd excuses” they’ve heard from employees calling
in sick.
According to the CareerBuilder survey, 38 percent of employees have
called in to work sick when they’re actually feeling well in the past
year — they just want a day off.
Of those, 27 percent said they had a doctor’s appointment, 27 percent
said they “just didn’t feel like” going to work, 26 percent
said they needed to relax, 21 percent said they needed to catch up on
sleep, and 12 percent blamed bad weather.
(Yes, that adds up to 113% — now you know why they need so much Career
Building.)
The job help web site says 52 percent of those surveyed work for a
company that has a no-excuse-needed paid time off policy — but most
figured they needed to give an excuse anyway when calling in for a day
off.
– – –
The Top 10 best time-off excuses the web site collected from bosses
in the survey:
Employee claimed his grandmother poisoned him with ham.
Employee was stuck under the bed.
Employee broke his arm reaching to grab a falling sandwich.
Employee said the universe was telling him to take a day off.
Employee’s wife found out he was cheating. He had to spend the day retrieving
his belongings from the dumpster.
Employee poked herself in the eye while combing her hair.
Employee said his wife put all his underwear in the washer.
Employee said the meal he cooked for a department potluck didn’t turn
out well.
Employee was going to the beach because the doctor said she needed more
vitamin D.
Employee said her cat was stuck inside the dashboard of her car.
[Source: JumboJolke.Com]
The Modesty of Cowboys
Three cowboys were hanging out in the bunkhouse. “I know that
smart aleck Tex,” said the first. “He’s going to start bragging
about that new foreign car he bought as soon as he gets back.”
“Not Tex,” the second cowboy replied. “He’ll always
be just a good ol’ boy. When he walks in, I’m sure all he’ll say is
hello.”
“I know Tex better than either of you,” said the third.
“He’s so smart, he’ll figure out a way to do both. Here he comes
now.”
Tex swung open the bunkhouse door and shouted,
“Audi, partners!”
[Source: Paul Dixon]
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