Issue 183


1. Stamp of authority

LAST month’s European Court of Justice ruling on ship registration rules in the Netherlands has wider implications for ship registration in all EC countries, says leading Dutch law firm AKD Prinsen Van Wijmen.

The ECJ decision means all EC countries, not just the Netherlands, must be careful to observe the right for free establishment and not be seen to hamper trade between European countries with overly burdensome flag registration laws.

The ECJ ruled that Dutch ship registration rules must be changed in the near future, because requirements as to the nationality of shareholders, directors and day-to-day managers of shipowning companies, and requirements as to the nationality and place of residence of administrators and managers of ships in joint ownership, were overly burdensome and not compatible with European law.

AKD says the ruling may have a substantial effect on the Dutch fleet and that it is a good ruling for international shipping interests, making for more flexible investment possibilities in the Netherlands and in Europe as a whole.

2. Choice of law

A RECENT decision by the courts in Hong Kong highlights the important distinction, in terms of deciding the proper law of a contract, between a choice of law in a particular jurisdiction and the incorporation of certain provisions of a foreign law.

In ‘Chan Chi Keung v Delmas Hong Kong Ltd’, the plaintiffs alleged misdelivery of two cargoes of poplin in containers carried from China to Tanzania. The cargoes apparently went missing some time after being delivered from the carrying vessel to the container terminal in Tanzania. Both the plaintiff and the defendant were Hong Kong companies, and the claim was bought in the Hong Kong High Court. The defendant applied for a stay of the Hong Kong action in favour of litigation in France, relying on a law and jurisdiction clause in the bill of lading.

The plaintiffs argued that the clause was invalid because it set out four possible laws which might govern the parties’ rights and obligations under the bill of lading contract. Thus, the plaintiffs argued, this was a ‘floating’ choice of law clause and as such was unenforceable.

The judge held that the clause was not a ‘floating’ choice of law clause because it did not on its true construction provide for the potential application of four different laws. The crucial point was that Hong Kong law draws a distinction between the reference to a foreign law as a choice of law to govern the contract, and the incorporation of some provision of a foreign law as a term of the contract.

In this case the judge found references to the Hague Rules only had the effect of incorporating the provisions of the relevant convention or law into the contract in the circumstances set out in the clause. The clause was therefore valid and enforceable.

As to what the proper law of the contract was, the judge rejected the plaintiffs’ argument that there was an implied choice of Hong Kong law. Instead, he agreed with the defendant that there was nothing to displace the strong and compelling inference that the parties intended that the contract be governed by French law as the law of the place where the dispute was to be heard.

For more details, provided by Andrew Sheppard and Steven Wise at Holman Fenwick & Willan, go to the International Law Office website:

3. Failure to warn

THE Singapore Court of Appeal recently held the owners of the ‘Sunrise Crane’ liable in tort for damage caused to another ship into which its contaminated cargo of nitric acid was transferred, on the grounds of their failure to warn the other ship of the extremely dangerous qualities of this type of cargo.

The court also held that this failure constituted “actual fault or privity” on the part of the owners of the ‘Sunrise Crane’ and thus disentitled them from relying on the right to limit under the 1957 Limitation Convention, incorporated into Singapore law by the 1996 Merchant Shipping Act. The Court of Appeal then went on to recommend that the Act be updated to incorporate the 1976 Limitation Convention.

A proposal so to amend the shipping act was introduced to the Singapore parliament on October 19.

Further details of the case, contributed by Ang and Partners, can be accessed at David Martin-Clark’s Case Notes website:

4. Strait talking

IMO is to convene a conference – in Jakarta, Indonesia, probably during July 2005 – to consider ways to enhance safety, security and environmental protection in the Straits of Malacca and Singapore.

The event is envisaged as a practical demonstration of the seriousness IMO attributes to the protection of shipping lanes of strategic significance and importance, and will serve as a vehicle for identifying issues which need to be addressed. It will enable the littoral and user states, other stakeholders and IMO itself to develop and put in place appropriate action plans.

About 50,000 ship movements, carrying a quarter of the world’s commerce and half the world’s oil, pass through the Straits of Malacca and Singapore each year. South-east Asia records the highest number of pirate attacks globally, while the Malacca Strait is a natural choke point for shipping, and a haven for pirates.

5. Marine claims forum

LLOYD’S Maritime Academy is holding a three-day forum on marine cargo claims, addressing legal and practical issues. The objectives of the seminar are to identify the parties to the cargo claim, examine bills of lading and other key shipping documentation, assess contamination and shortage problems, analyse the concepts of unseaworthiness and due diligence, understand the insurance implications of dangerous cargo, and gain knowledge about the formulation, negotiation and defence of cargo claims. Nicholas Woo, a partner of Birketts Solicitors, will chair the event, which offers fifteen hours’ CPD.

6. Raising standards

TO the Donald O’May memorial lecture in London last week, where Terence Coghlin talked a great deal of sense about ways in which insurance companies, P&I clubs and flag states can reduce substandard shipping.

This, said Terence, was to be a practical view. And it was, to the extent of pointing out that, even if P&I clubs raise retention rates to astronomical highs, and hull insurers pressure owners till the pips squeak, it will still amount to no more than ten per cent of total operating costs. This is not enough to eliminate substandard owners, although it might deter a few.

You could hear shipowners flinching when Coghlin proposed that some ships might be detained by port state control before cargo working could begin. The prospect of demurrage debates should have had lawyers licking their lips, but that may have been due to the prospect of food afterwards.

We were promised at the beginning that, as far as CPD points went, this was “a one-hour lecture, but one hell of a reception afterwards.” No CPD points for that, although the diplomacy needed to get through the crowd – let alone to hang on to a drink – without treading on any of the august legal toes present ought to go quite a long way towards accreditation as a mediator.

7. Climate change at sea

SEAFARERS have always had to cope with extreme weather, but waves in excess of eighty feet are now regularly detected by satellite imaging. That is more than twice maximum anticipated wave heights. And, in the past ten years, about ten per cent of the 22,000 merchant ship casualties reported have been attributed to weather.

A conference organised by the Honourable Company of Master Mariners on November 29 in London will examine just how bad things might get, and how seafarers might respond. ‘The Mariner and Climate Change’ will include presentations by experts on weather and wave heights, as well as by seafarers.

8. Shipping round table

WHAT does shipping need? Some think it needs more case law, while others would prefer fewer lawyers. But IMO secretary-general Efthimios Mitropoulos told the Round Table of shipping organisations in London this month that he wants more openness and a better image. The Round Table seemed to agree, calling for collaboration, co-operation and cohesiveness, and possibly anything else beginning with ‘C’.

The Round Table, which includes Intercargo, Intertanko, BIMCO and the International Chamber of Shipping among its members, hopes to present a united front at IMO on a variety of safety-related issues. It also wants to convince P&I clubs to build on the strengths of a good system to encourage quality shipping, although nobody was willing to say exactly what changes to the system might be necessary. Evidently, openness only goes so far.

Bridging the gap

YOUR editor’s idea of a good story is one that gets him home in time to see Coronation Street on television. But sometimes the most unlikely people can break a really big story, and they have to stay with it. Such has been the case with the recent spate of bridge thefts, which you have read about exclusively in the maritime advocate online. This week we can reveal that the thefts are continuing apace.

Earlier this year, following our exclusive expose on the unlikely connection between the fear of bridges and the theft of Edvard Munch’s painting, ‘The Scream’, we reported that a famous iron bridge in the Bosnian city of Mostar has been stolen and sold to scrap metal dealers for £90. Now, you would hardly believe it, but two iron bridges in northern Australia have been stolen. No sell-on price was available at the time of going to press.

Something sinister is afoot. If we drew an isopleth on a map connecting Bosnia, Australia (preferably the Northern Territories) and Norway (the country of Munch’s birth), we would have a line very much like the shape of Mr Punch’s nose, which may give us a clue as to the identity of the thieves. Once identified, if they had a lot of scrap metal in their back gardens, that would be the clincher.

Assuming there is a pattern to the thefts, and to the isopleth, the good citizens of Snell Lock would be best advised to lock up their bridges in the lead-up to Christmas. (To draw an isopleth, you will need a very sharp pencil and a degree in physics.)

Journals of more serious record are likely to pick up on the bridge thefts soon, leaving your editor to get back to Coronation Street, on which subject he should mention that he is one-third of the way through watching a video of last night’s three-episode spectacular, and will not look kindly on any reader tempted to email him the denouement.

Relative values

THE lives led by those of us employed in the shipping industry must seem rather humdrum to outsiders. How can it be otherwise when we get press releases which say, “IMO to take Straits initiative”, while colleagues in the medical profession get ones that say, “Psychotherapy malpractice – new risks for psychotherapists” (and this in a quiet week for psychotherapy).

The recent California case of Ewing v Goldstein has apparently expanded the duty of the psychotherapist to such an extent that, if a psychotherapist learns from a close relative of the patient (distant relatives will not do) about the danger which the patient poses to another person, he or she (or they) have a duty to break confidentiality.

“Unless the California State Supreme Court overturns the Ewing decision,” says the press release, “a therapist may be in a large Catch 22 situation”.

Several questions remain. What happens if your wife tells the doctor you are about to kill her mother (the mother of the wife of the patient, not the mother of the doctor), and then you divorce her (your wife) before you have killed her (her mother)? Is it all right? What if you kill the doctor? Wouldn’t that be easier all round? Just what is a LARGE Catch 22 situation? And what if Ewing comes out of the shower, after six years, without a scratch?

Next week, IMO passes another protocol. We can’t wait.

Small talk

YOUR editor’s comments last week about the discovery of the remains of a so-called ‘hobbit’, a three-foot man who lived 12,000 years ago, excited no interest whatever among cynical readers, or even among those who are NOT cynical. Unless somebody responds soon, we are going to serialise John Guy’s discourse on tonnage measurement, some of which will be delivered in that silly voice he adopts from time to time.

Despite such frank indifference, experts insist it is impossible to be sure that hobbits have died out. Your editor can only add that old hobbits die hard.

Big wigs

EVER wondered where the term ‘big wig’ comes from? Neither has your editor. But a newsletter must be full of something, even if it is not news, so we are going to tell you anyway.

In the old days (some time between the Black Death and the Mathews Cup Final) women kept their hair covered, while men shaved their heads and wore wigs. Much the same thing still happens today.

The wool wigs worn by wealthy men couldn’t be washed (it is not clear why, they just couldn’t), so to clean them they would carve out a loaf of bread (don’t ask), put the wig inside, and bake it for thirty minutes, or less if it was a fan-assisted oven. The heat would make the wig big and fluffy, hence the term ‘big wig’.

More, next week, about why herrings may have wrists.
Blonde Moment of the Week

A DOCTOR put an overweight blonde on a diet, saying, “I want you to eat regularly for two days, then skip a day, and repeat this procedure for two weeks. The next time I see you, you’ll have lost at least five pounds. ”

When the blonde returned, she’d lost nearly twenty pounds. “Why, that’s amazing,” said the doctor. “Did you follow my instructions?”

The blonde nodded. “I’ll tell you what, though. I thought I was going to drop dead that third day.”

“From hunger?” asked the doctor.

“No, from all that skipping.”

Cat Headlines of the Week

Worst cat year in history focuses industry minds (Insurance Day)

Ace profits battered by $406m cat losses (Insurance Day)

Hovensa cat-cracker to close in January (TankerWorld)

Best Body Part Headline of the Week

Miner’s knee will bring new claims (Insurance Times)

Best Cooking Headline of the Week

OutRight poaches Premium Credit boss (Insurance Times)

Quote of the Week

If high heels were so wonderful, men would still be wearing them. (Sue Grafton)

Most Poignant Obituary of the Week

Ralph Hawkins: Dedicated and meticulour sub-editor at ‘The Times’ (Times Online)

Hairdressers’ Window Sign of the Week

Trainee apprentice wanted. (London)

Best Question-and-Answer Sessions of the Week

Q: The post of Solicitor-General in England is traditionally filled by members of which profession?

A: Army

Q: Which word means to collapse inwards and also to concede a hand at cards?

A: Implode

Q: Which Latin American country beginning with ‘P’ lies between Colombia and Costa Rica?

A: Peruvia

Q: Which two initials go before ‘Priestley’ to form the name of one of England’s most famous novelists and playwrights?

A: A.W.

Q: Which is the furthest north – South America or the American South?

A: South America

Q: Which word comes after ‘chimney’ to form a household feature, and is also a name for part of the human body?

A: Flue

(The Weakest Link, BBC TV)