The Maritime Advocate-Issue 669



1. Breaking Limits–The Atlantik Confidence
2. Switching From Paper to Electronic Bills of Lading
3. AAA expands Exam System–New Module on Upstream and Offshore
Energy Claims
4. Human Rights at Sea Report
5. Clause Paramount–Suit Yourself
6. People and Places

The Maritime Advocate–A Growing Concern

This publication, nicknamed "the Avo" passed
a milestone this summer. It has passed the 20 000 subscriber mark, the
highest total since its foundation in 2001. As a result of hand-ons
and internal republications within firms, it is fair to assume a total
readership of around 60 000 located in 120 countries. This gives the
Avo a very wide footprint in the maritime world. If you have a message
or product to promote or circulate, the Avo can promise to get the word
out at affordable rates. Give us a try.


1. Breaking Limits–The Atlantik Confidence

Alex Kemp, Jenny Salmon and Rory Butler have sent us a note on this
singular case. They write:-

In a groundbreaking judgment handed down on 11 October 2016 the firm
represented cargo insurers in a case where it is believed that, for
the first time anywhere in the UK, limits under the Convention on Limitation
of Liability for Maritime Claims 1976 (as amended) have been broken.


Following the fire and sinking of the bulk carrier ATLANTIK CONFIDENCE
off the coast of Oman in April 2013, the Owners of the vessel sought
to constitute a Limitation Fund in the Admiralty Court and obtain a
declaration that they were entitled to limit their liability in accordance
with the Convention due to the size of potential claims advanced against
the Owners.

The Cargo Insurers sought to "break limits" by defending
the application on the basis that the loss of the vessel along with
her cargo was caused by the "personal act or omission" of
the Owners. Therefore the exception in Article 4 of the Convention applied.
The Cargo Insurers argued that the only credible explanation for the
sinking of the Vessel which was consistent with all of the evidence
was that she was deliberately sunk by her crew on the direction of her
Owners. They argued that the "innocent" explanation for the
vessel sinking put forward by the Owners required a series of improbable
fortuities which when viewed in the context of the other evidence such
as the change of routing of the vessel into deeper water, the Master
and Chief Engineer’s behaviour and response to the fire and the difficult
financial circumstances of the Owners’ principal meant that the only
credible conclusion could be that the loss was caused by a deliberate

Read the note and the analysis of the decision here:-


2. Switching From Paper to Electronic Bills of Lading

It is rare to read something on electronic bills of lading which does
not originate from within the companies which make up the church of
dematerialisation. Just a few days ago the house of Marsh’s claims department
put down their mostly sound views on the subject. No mention for the
newbies e-Title who have become fully paid up members of the P&I
approved elect alongside essDocs and Bolero. My but it is hard work
getting the maritime world to sign on. Read the paper here:-


3. AAA expands Exam System–New Module on Upstream and Offshore
Energy Claims

James Brewer writes:-

The Association of Average Adjusters has announced the launch of a
new exam module, Upstream and Offshore Energy Claims (A3). This A3 paper
can be taken as an alternative to Paper A2 (Hull and Cargo Claims) in
order to achieve the AAA’s Associateship qualification.

Keith Martin, chairman of the Association of Average Adjusters, said:
“The introduction of this new module represents the AAA’s
positive response to the current lack of a sector-specific professional
examination for adjusters of upstream and offshore energy claims. The
idea was born late last year when I received an approach from senior
energy loss adjuster Nigel Carpenter to consider the possibility of
developing an alternative path that would lead to Associateship status.

“Since then the AAA’s newly formed offshore faculty has been
busy devising questions and answers for use in the A3 module. I can
summarise the A3 paper as being different from A2 only in its subject
matter. Everything else about it is identical, specifically:

The Associateship qualification will still require that all candidates
must pass Module A1 (Marine Insurance Act and related matters) plus
one other Associate-level paper.
For that second paper, candidates will soon have the choice of sitting
either A2 (Hull Claims) as before, or the new A3 paper (Upstream and
Offshore Energy Claims)
All three papers will be of 2.5 hours’ duration, as before.

The first sitting of Paper A3 is scheduled for October 2017 and prospective
candidates should visit our website at the link below for guidance notes,
a bibliography, administrative details and a schedule of fees."

In another new development, the AAA has inaugurated an award for the
outstanding Associate of the year. The 2016 winner is Joseph Tang of
Asia Maritime Adjusting Pte Ltd, Singapore. Mr Tang attained two distinctions
at one sitting in the Associate exams. The prize sponsors the successful
Associate to attend the International Marine Claims Conference in Dublin,
which for 2016 was from September 28 to 30. The 2016 conference was
the 13th in the series, and is a key function for claims practitioners
throughout the world.

The introduction of an upstream and offshore energy claims paper is
the latest enhancement to the AAA exam system, which enjoys considerable
prestige throughout global insurance markets. In May 2016, the Association
approved another important exam development, namely stipulating achievements
which would earn a new title, that of Senior Associate, and congratulated
the first 13 men and women to attain the appellation. The move was in
response to interest by Associates working in offices other than those
of average adjusters to pursue courses to a point short of becoming
fully qualified Fellows.

._____________________________________________________________________________________…………………….+44 (0)20
3326 4514

4. Human Rights at Sea Report

David Hammond the CEO of Human Rights at Sea has sent us a copy of
his organisation’s latest newsletter which is packed with good things
and reports. He writes:-

The Autumn (Fall) period has been dominated by the inaugural International
Maritime Human Rights Conference 2016 held in London. This was a genuine
success with delegates attending from around the world resulting in
significant interest in the topics covered from 20 speakers over nine
hours in four main session areas of discussion. Conference details and
access to materials can be found below.

The charity is further able to report on our successful Internship
Programme and the experiences of our Erasmus Intern, Melanie Glodkiewicz,
seconded to the German Sea-Watch NGO working offshore Libya and delivering
unique insights via her blogs and articles, the increasing distribution
of our ‘Managing Traumatic Stress publication written with Professor
Neil Greenberg and published by The Nautical Institute, and our joint
submission to the UN Special Rapporteur for Human Rights and the Environment.
Our inputs to the Missing Seafarer and Fishers Reporting Programme continue
as cases are submitted to the database.

Finally, in this last quarter of 2016, the Charity will aim to finalise
and distribute a new seafarer-focused e-learning course, it will attend
several high-level crew and CSR conferences, and release a major new
case study and academic review.

To access the papers click on the link below:-


5. Clause Paramount–Suit Yourself

Nils Dahl-Nielsen, Alexis Petrou and Nick Parton of Jackson Parton
have sent in this note on the case of Golden Endurance Shipping SA v
RMA Watanya SA and others [2016] EWHC 2110 (Comm) Phillips J.:-

The Claimants were the Owners of the vessel GOLDEN ENDURANCE. The vessel
carried a cargo of wheat pellets to Casablanca in Morocco. The receivers
alleged the cargo had been damaged and arrested the vessel. An LOU open
as to jurisdiction was issued to the cargo interests and the vessel
released. The cargo insurers subsequently issued proceedings in the
Moroccan Courts where the Hamburg Rules are compulsorily applicable.
They did not protect time nor seek an extension of time in England despite
being represented by English solicitors.

The bills of lading were on the usual Congenbill form containing the
standard Clause Paramount incorporating the Hague/Hague-Visby Rules.
The bills incorporated the terms of the charterparty which provided
for English law. Mr Justice Burton had earlier ruled that the English
Courts had jurisdiction – [2014] EWHC 3917 (Comm).

The two issues before Philips J were (a) whether the owners had submitted
to the Moroccan Court, applying English conflicts of law rules; (b)
if not, whether the owners were entitled to a declaration of non-liability
on the grounds that the cargo claim was time-barred under the Hague

Phillips J held that the owners had not submitted to Moroccan jurisdiction
and that any Moroccan judgment would not be recognised by the English

As to the second issue, and in a judgment that many readers may find
surprising, he held the cargo interests were not time-barred saying
that suit in a Hamburg Rules state satisfied the purpose of the Hague
Rules time bar to ensure that owners had prompt notification of claims.

It remains to be seen whether this decision is to be appealed, however,
in the meantime, Owners/Contractual Carriers and insurers may be left
with the uncertainty of having to defend and reserve for claims past
the Hague/Hague Visby Rules time limit in case, unbeknownst to them,
cargo interests may have commenced proceedings in a jurisdiction which
applies the Hamburg Rules.


6. People and Places

Holman Fenwick Willan (HFW) has appointed a new chief operating officer,
Justin Young. Mr Young, who joined the firm on 26 September, comes from
Clifford Chance where, for the past six years, he was the Regional General
Manager, South East Asia.


The Asia practice of Ince & Co has once again won the “Best
in Shipping and Maritime” award at the asialaw Asia-Pacific Dispute
Resolution Awards held on 27 September 2016 in Hong Kong.


The Korean Register has announced the death of its Chairman and CEO,
Dr B S Park who has passed away after a short illness.

Dr Park was appointed as Chairman and CEO of KR in December 2014 and
during that time he had made a significant impact on the classification
society. In particular he will be remembered both as a moderniser and
as a someone who cared deeply for the people he worked with. In his
relatively short time with KR, Dr Park had travelled extensively and
was well liked and respected across the industry.

Dr Park had graduated from Korea Maritime and Ocean University in 1976
and joined Pan Ocean Shipping where he worked in a number of capacities
until 2001. In that year he was appointed CEO of Welson Korea Insurance
Brokers before becoming COO of Korea P&I Club in 2006. He joined
KR in 2014.

Dr Park was 63 and leaves a wife and two grown up children.


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.

Looking around for references to the Hamburg Rules, we ran across this
not uncharacteristic editorial passage in Back Issue 16 dated October

There is a limit
SOMETHING even more fundamental which remains unresolved is the question
of how to apply the package limitation provisions in the Hague Rules.
A simple question seemingly continues to defy the powers of deduction
of the greatest minds in commercial law.

The Auckland division of the High Court in New Zealand, in the case
of the Tasman Discoverer, recently debated the issue of whether the
Hague Rules package limitation was introduced into the contract represented
by the bill of lading covering a shipment of tin plate from Korea to
New Zealand – and, if so, what its effect was on reducing the shipowner’s
liability for cargo damage?

During the voyage, some of the cargo was damaged as a result of seawater
ingress. Some was salvaged, and 55 coils were sold as scrap. The shipowner
accepted liability for the damage. The claimants argued that the package
limit was 55 times the present value in gold of £100 sterling
in 1924. The owner, however, maintained that its liability was restricted
to £100 per package or unit.

The Auckland court found for the claimants, the point being made that
the reference to "£100 sterling" in the Hague Rules
was intended to avoid the effect of the erosion of the value of sterling
by inflation. How many times can you milk the same cow?

Limitation loophole
In the US, meanwhile, New York law firm De Orchis, Walker & Corsa
notes in its most recent client alert that, "With the unintended
help of carriers and some courts, shippers have found an easy way to
get around the COGSA $500 package limitation. Many shippers, or their
underwriters, are managing to recover 100 per cent for cargo losses
without declaring full value or paying the extra charges.

"The loophole opened when some courts decided that the limitation
for containerised cargo should be applied to the number of items listed
by the shipper that qualified as any sort of package, regardless of
their small size and regardless of the fact that such items may have
been palletised or shipped in master cartons or crates.

"The legal theory is that, by permitting such listing in the Shippers
Particulars, the carrier is deemed to have agreed with the shipper that
the number of inner cartons listed are the ‘intended’ COGSA packages.
The basis for this is that COGSA, like the Hague Rules, provides that
the carrier need not allow any description except the marks and numbers
of packages that it can reasonably check. Thus, when a sealed container
is shipped, the carrier can legally cross out the number of packages
that the shipper claims are in the sealed container. The carrier could
give a receipt only for the number of containers and their serial numbers."

There have been cases in which the shipper has not disclosed that the
listed cartons were palletised or were the inner cartons packed in large
master boxes. In every such case, the shipper has recovered full value
because the $500 limitation was applied to the inner cartons, despite
the fact that they have each been worth well under $500.

De Orchis Walker says, "The carriers can only blame themselves
for creating the loophole. The courts are also at fault for not having
asked whether the small inner cartons could have been shipped separately
or whether the listed shipping packages were marked and numbered."

And we are all at fault for scrapping in the playground over this tiresome
issue. The CMI plans to submit to UNCITRAL the draft of a new law governing
the international carriage of goods by sea. This can’t come a moment
too soon. UNCITRAL has yet to live down the execrable Hamburg Rules,
which even Hamburg is ashamed of. Read Chester Hooper’s article in this
issue, and you might begin to hope that the CMI can help create an international
carriage convention that the whole world can live with. Even the US
might be part of the package. But don’t count on it.


Momento Mori

Old accountants never die, they just lose their balance.

Old actors never die, they just drop apart.

Old architects never die, they just lose their structures.

Old bankers never die, they just lose interest.

Old basketball players never die, they just go on dribbling.

Old beekeepers never die, they just buzz off.

Old bookkeepers never die, they just lose their figures.

Old cashiers never die, they just check out.

Old chauffeurs never die, they just lose their drive.

Old cleaning people never die, they just kick the bucket.

Old doctors never die, they just lose their patience.

Old electricians never die, they just lose contact.

Old hardware engineers never die, they just cache in their chips.

Old hippies never die, they just smell that way.

Old lawyers never die, they just lose their appeal.

Old limbo dancers never die, they just go under.

Old mathematicians never die, they just disintegrate.

Old musicians never die, they just get played out.

Old owls never die, they just don’t give a hoot.

Old photographers never die, they just stop developing.

Old policemen never die, they just cop out.

Old schools never die, they just lose their principals.

Old sewage workers never die, they just waste away.

Old steelmakers never die, they just lose their temper.

Old students never die, they just get degraded.

Walt Disney didn’t die. He’s in suspended animation.

Old preachers never die, they just ramble on, and on, and on, and on….

Old ministers never die, they just get put out to pastor…


More Passing

One Irishman was downing them faster than usual when the man on the
barstool next to him said, "What’s wrong?"

The first Irishman said, "I’m drinking to the memory of me wife.
She was a saint on earth. She went to church every single morning, spent
her days reading and quoting the Scriptures, sang hymns and psalms all
evening, filled our house with religious statues and paintings, and
invited priests and nuns to dinner three times a week."

"She sounds like an angel," the second man commented, "I
suppose the good Lord took her early to Himself."

"No," the first Irishman replied. "I strangled her."

[Source: Paul Dixon’s Joke of the Day zine]


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