Issue 170


1. Water for oil

IT has been held on appeal by the courts in England that a judge at first instance erred when deciding demurrage liability in a dispute involving responsibility for substitution of water for oil during a ship-to-ship cargo transfer.

The sale contract covering the oil cargo specified a water/sediment content of no more than one per cent. Although it was established that such was the case at loading, the cargo was found to contain excessive quantities of water on discharge, leading to its rejection by the cargo interests.

The judge at first instance found that there must have been a deliberate substitution of water for oil, although it was not possible to say where this had occurred. This meant that the cargo interests had failed to prove that the excess water had been loaded as cargo onto the vessel at the ship-to-ship transfer point. The judge also found that the demurrage provision in the sale contract operated as a contract of indemnity rather than as a free-standing provision. Both parties appealed.

On appeal, it was held that the judge had been right to find a lack of proof that the water had been loaded on to the vessel by or at the ship-to-ship transfer. It was also held, by a majority, that the judge had erred as to the demurrage liability issue. It was found that the sale contract provisions constituted an independent code. The sale contract had been made independently of, and without knowledge of, the terms of any charter party. It was held that, once it was concluded that the express words of the laytime and demurrage provisions did no more than refer to the charter party rate, the natural reading and effect was an independent obligation.

2. Insurance and substandard shipping

THE OECD Directorate for Science, Technology and Industry has published a report on ‘The Removal of Insurance from Substandard Shipping’.

The report, written by P&I guru Terence Coghlin, notes that, “The responsibility for the enforcement of maritime safety rules lies squarely upon flag states and the classification societies to which they delegate. They must not be allowed to avoid their duty to police the safety of the world’s merchant fleet. But marine insurers are willing to play their part, alongside others, in support of the campaign to educate substandard shipping.

“Hull insurers must seek to make profits for their capital providers and, although individual underwriters are keen to avoid substandard shipping, the market as a whole is currently too competitive to make a significant contribution to the campaign.”

David Taylor, special adviser to the IUA, will present an overview of the report’s findings to the meeting of the International Union of Marine Insurance in Singapore next month.

3. New Joint Hull chairman

PETER McIntosh, hull underwriter for Wellington Syndicate 2020 at Lloyd’s, has been elected chairman of the Joint Hull Committee (JHC) in London. He succeeds William Beveridge, who will remain an active member of the committee.

Peter McIntosh is an experienced and well-known underwriter of hull insurance business in the international market. An acknowledged expert on technical issues, he played a leading role in the development of the International Hull Clauses 2003.
The clauses have met with growing approval from a wide range of user interests, and have been described by the CMI as “a fine example of leadership on the road to international harmonisation.”

Peter McIntosh intends to build on the excellent work the JHC has been undertaking in recent years. He says, “I am delighted to be taking up the mantle as chairman of the Joint Hull Committee and I look forward to bringing to the role the same energy and enthusiasm which characterised William Beveridge’s stewardship”.

The JHC is a joint initiative by the International Underwriting Association of London and Lloyd’s Market Association.

4. Turkish stock

IN an effort to attract foreign investment, Turkish trade law has been amended to allow shipping companies which own Turkish-flagged vessels to be traded on the stock exchange, provided the majority of shares are held by Turkish citizens. Other changes encourage foreign investment by relaxing and simplifying mortgage and foreclosure processes. (Aybay & Aybay)

5. People and Places

IN Denmark, Henrik Frandsen has left law firm Kromann Reumert for Aarhus-based Delacour, led by partner Henrik Kleis.

SHIPPING lawyer Carsten Grau has left the Bremen office of Dr Schackow & Partner to become a partner with Dr Harten & Partner in Hamburg.

6. Messenger takes MTC chair

LEN Messenger, energy underwriter at Zurich Global Energy, has been appointed chairman of the Marine Technical Committee (MTC) of the International Underwriting Association (IUA). He succeeds Graham Hensman, marine underwriter at Allianz Marine and Aviation.

The committee is responsible for overseeing the IUA’s marine clauses committee as well as a number of joint market underwriting and claims committees. It is sponsoring and supporting the first International Marine Claims Conference, which is taking place in September in Dublin.

7. Arbitration seminar

LLOYD’S Maritime Academy is running its first International Maritime Arbitration Seminar on December 14-15, in London. It claims to offer a definitive guide to different methods of alternative dispute resolution, and to be particularly suited to those new to or unfamiliar with ADR. It also offers an introduction to arbitration, litigation and mediation, including a mock mediation by CEDR.

Other subjects covered include arbitral misconduct under English law, enforcement of arbitration awards and the role of P&I clubs.

The seminar is supported by the LMAA, and speakers include Clive Aston, David Martin-Clark, and representatives from some of London’s leading maritime law firms.

Prevailing logic

A JUNIOR partner in a law firm was sent overseas to represent a long-term client accused of robbery. After days of trial the case was won, and the client was acquitted and released.

The excited junior attorney emailed his firm, “Justice prevailed”.

The senior partner emailed back, “Appeal immediately”.

Junk mail of the week

A UK financial adviser received proof that mail-shots aren’t always reliable when he opened one to read, “Dear Mr Shagslikeadonkey, moving your insurance to Prudential could save £80.”

Prudential blamed the letter on a hoaxer, who has since left the firm. (The Sunday Times, London)

Medical confusion

THERE is apparently some concern in the UK that having doctors’ letters typed by staff in overseas countries could be putting the lives of patients at risk. In one letter, typed in India, an ear infection of the Eustachian tube apparently came out as “Euston Station Tube malfunction”.

It should be said that not all medical misunderstandings are committed to paper, however. Your editor is reminded of the old cartoon of a doctor and nurse conferring alongside a screened-off hospital bed. With horrible cries of pain coming from the other side of the screen, the doctor says, “Nurse, “I said prick his BOIL.”

Quote of the Week

Poets have been mysteriously silent on the subject of cheese. (G K Chesterton)


Moon Made of Cheese

On a night in June the moon sits
Alone on the horizon
Like a yellow ball of cheese,
Peeking through the clouds
Like a giant wheel of Gouda
Or maybe a round of Swiss…

Look closely and you will see the holes.
Remember those cartoons
When we were young?
A mouse lands on the moon
And scoops up a chunk of cheese
And pops it in his mouth…

Nowhere have I read
That the astronauts
Were lovers of cheese
And brought back only rocks
To appease a hungry Earth
Left behind to moon over
That tasty golden orb.

(Steven M Hewitt)

Proof positive

THE art of proof-reading has sadly declined in the past twenty years. Computer spell-checkers are no substitute for the army of well-read men and women who were prepared to miss the last bus home to make sure the all-important comma went in on the last hot-metal revise of the People & Places page. Where are the great proof-readers now, and what would they make of these lines of verse?

I have a spelling chequer,
It came with my pea sea,
It plainly marques four my revue
Miss steaks eye cannot sea.

When eye strike a quay, right a word,
I weight four it two say
Weather eye am wrong oar wright
It shows me strait aweigh.

As soon as a mist ache is maid
I nose bee fore two late
And eye can put the error rite
Its rarely, rarely grate.

I’ve run this poem threw it
I’m shore your pleased two no,
Its letter perfect in it’s weigh
My chequer tolled me sew

Mighty response

YOUR editor’s deliberate mistake last week, in claiming that stalactites go up and stalagmites down, has helped illustrate the variety of ways in which different people seek to remember which is which.

New York arbitrator Don Szostak writes, “No doubt you will hear from others interested in the English language. It’s C from the ceiling and G from the ground when trying to remember the subject words.”

He was right.

Emily Bourne, from DLA, wrote to say, “I always believed stalagmites go up (they MIGHT reach the ceiling) and stalactites go down (they have to hold on TIGHT).”

And Richard Olsen explained, “Your editor’s list of things he was brought up to believe in is in general admirable but needs correction in one respect so as not to prejudice your organ’s reputation for immaculate accuracy. His reference to “stalagmites going down and stalactites going up” is slightly (100 per cent) awry in that it is stalactites that hang from the roof and stalagmites that grow from the floor, easily memorable in that they are like getting ants in the pants – the mites go up and the tights come down. A piece of useless knowledge perhaps, but, after all, he started it.”

He did, and he will finish it.

Your editor’s own way of remembering which is which is very memorable, but must remain, for now, a secret. Meanwhile, it is interesting that nobody wrote in to say that it is a preposition – rather than a proposition – that you must not end a sentence with.

Bridging the gap

THIS week, your editor is mostly not mourning the theft of Norway’s most treasured painting, ‘The Scream’, by Edvard Munch. (Munch, of course, did not STEAL the painting. He painted it, even if some of us wish he hadn’t.)

The Scream is said to be a representation of fear, angst, oppression and paranoia. Munch said he got the idea for the painting while crossing a bridge and sensing a scream passing through nature. He was probably suffering from gephyrophobia, which is an irrational fear of bridges. Today, he could have got a cure from any one of a number of phobia clinics, which advertise on the internet under such legends as, ‘Imagine a world where you are completely free of fear of bridges.’ (This does not represent a great challenge to the imagination of your editor, who has never been afraid of a single bridge in his life).

Your editor will not miss The Scream. Give him a Hopper or a Van Gogh instead, or a nice Constable. But we must deplore the theft of works of art generally, and hope for the return of Munch’s masterpiece. If the worst happens, however, there are apparently three others.

Most Unsuccessful Pun of the Week

Say hollow to a new drum (Hazardous Cargo Bulletin)

Most Exact Anniversary of the Week

1968 – Russia invades Czechoslovakia shortly before midnight. (

Sports of the Week

Cricket and yngling (joint first)

Best Noun-as-a-Verb of the Week

The doors will remain locked until the train is fully platformed. (British Rail, reported in The Times, London)

Best Olympic Games New Noun of the Week

She had a very good Sydney (BBC TV)

Best Cat Job Ad of the Week

Cat Modelling Manager. Knowledge of Catrader required. Salary to attract the best. Must have clean licence and own cat. (Insurance Times). (Okay, we made up the last bit).