IN THIS ISSUE
1. Inter-Club Agreement Case
2. Hong Kong Review
3. When Loans go Bad
4. Marine Insurance and Unmanned Ships
5. TT Talks Evidence
6. People and Places
The Maritime Advocate–A Growing Concern
This publication, nicknamed “the Avo” passed a milestone last 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 why don’t you.
1. Inter-Club Agreement Case
Gavin Ritchie of the Charterers P&I Club has sent us this case note:-
In Transgrain Shipping (Singapore) v Yangtze Navigation (Hong Kong), the English High Court held that the word “act” in the phrase “act or neglect” in Clause 8(d) of the Inter-Club Agreement 1996 meant “any act” rather than “culpable act”. In the judge’s view, this construction was in line with the fact that Clause 8 envisaged a more or less mechanical apportionment of liability and so “act” should bear its ordinary meaning without regard to questions of fault.
While Charterers have appealed what appears to be a logical decision, this case provides useful clarification that a party can be held responsible under the ICA regardless of fault or breach of contract.
Read the note in full here:-
http://tinyurl.com/InterClubAgreement
2. Hong Kong Review
A recent article in the Maritime Logistics Review by Joseph Keefe casts light on the Hong Kong scene:-
The Port of Hong Kong saw in 2016 its lowest TEU throughput for more than a decade. Not even a late surge in throughput in December could prevent the less-than-rosy results. By the numbers, Hong Kong saw a monthly 1.8 million TEU, 14 percent increase from the same period just one year ago. But, 2016’s totals (19.6 million TEU) represented an annual drop of 2.5 percent. More worrying is that some of these individual terminals experienced as much as a 20 percent surge in December, but much if not all of that was a function of the Hanjin ‘hangover.’
….At the same time, regional, competing ports have developed rapidly in recent years. Shanghai, for example, is the world’s busiest seaport, while Shenzhen was the world’s third busiest port, with 24.2 million TEUs handled in 2015. The Port of Ningbo-Zhoushan surpassed Hong Kong to become the world’s fourth busiest in 2015, with its throughput increasing to 20.6 million TEUs. Hong Kong meanwhile showed the least amount of growth over the course of the past 11 years and is one of only two top 10 ports to show a decline in TEU throughput from its best year. Singapore was the other.
For all the competition, the author is upbeat about the role Hong Kong plays in the world.
Read the item in full here:-
http://maritimeglobalnews.com/news/impressive-destination-unfinished-journey-ckcjhg
3. When Loans go Bad
A recent article on dealing with problem loans by Siavush Mokhtaron and Nicholas Papadopoulos, which appears in the Norton Roase Fullbright webzine called Legalseas, also has something to say on the Hanjin insolvency:-
The collapse of Hanjin, one of the world’s largest container lines, has highlighted the many difficulties faced by lenders with exposure to the shipping industry. On February 9 the Seoul Central District Court said that liquidation would return greater value to creditors than any attempt at rehabilitation, particularly given that many of Hanjin’s operations have now been sold, including its Long Beach cargo terminal, in the five months since the company filed for insolvency.
Indeed, within a week of the news that Hanjin had lost the support of its lenders, 79 of its 128 vessels had been seized and arrested by creditors around the world and an estimated half a million containers remained on Hanjin vessels through fear of seizure. Further, ports including those in Shanghai and Xiamen in China, Valencia in Spain and Savannah in the US, blocked access to Hanjin ships because of fears Hanjin would not be able to pay port fees.
The chaos that resulted from Hanjin’s failure to secure lender support led to a string of cross-border law suits against the group and forced Hanjin to seek recognition of its South Korean receivership in a number of key jurisdictions including Australia, Japan and the US. This undoubtedly added further costs and complexity to the receivership process which could have been avoided if Hanjin had had enough funding to cover its immediate operations. Given the large number of creditor claims which have remained outstanding and the uncertainty over debt recovery levels following the company’s recently announced liquidation, many have questioned whether the decision to pull the plug on Hanjin was the best option in the circumstances.
In an address to a South Korean parliamentary hearing, Hanjin’s group chairman argued that the company could have survived if lenders had not halted their support. A number of commentators agree with this argument suggesting that the group’s proposed self-rescue programme (which would have seen a shareholder injection of US$450 million into the company over a two year period) and the implementation of a well-considered restructuring would have allowed Hanjin to survive until rates picked up again. This was the approach taken with one of Hanjin’s competitors, Hyundai Merchant Marine, which is now on a track towards recovery under a creditor-led debt restructuring programme of aggressive asset sales and rights offerings. Though every problem loan has its own unique set of circumstances, many believe that a similar approach with Hanjin could have been beneficial for all parties involved.
http://www.nortonrosefulbright.com/knowledge/publications/146792/dealing-with-problem-loans
4. Marine Insurance and Unmanned Ships
A short item on this subject appears in the new IUMI Eye Newsletter. Written by Prof. Dr. Dieter Schwampe, Dr. Maximilian Guth and Dr. Carolin Schilling-Schulz of Dabelstein & Passehl in Hamburg. There is news too of a seminar to be held on 28th March at the firm’s offices:-
5. TT Talks Evidence
The latest edition of TT Talk [an ezine founded by your editor way back in 1998] is devoted to a round the world look at the duties to preserve evidence in maritime matters, which rather vary from cards on the table common law to no duty at all Roman Dutch Law. A good effort on a subject dear to the hearts of many Avo Readers.
http://ttclubnews.com/2RU-4TKAI-AD9G2CZDC/cr.aspx
6. People and Places
A new prize has been set up for Nigerian LLM students within the Swansea Maritime Law course for excellence in the Charterparties course. The prize has been backed by our sponsors Bloomfield Law Practice and reflects the fact that over the last ten years more than 200 Nigerian students have become Swansea LLMs.
http://www.swansea.ac.uk/law/news/bloomfieldlawprizeforllmstudentsintroduced.php#accept
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Agency Sector Management (ASM)’s chairman Peter MacSwiney has been appointed to co-chair the Customs Brexit Group (CBG), a Joint Customs Consultative Committee (JCCC) think-tank focused on Brexit Customs issues.
The Group, which is co-chaired by Aaron Dunne, Trade and Customs Cooperation at HM Revenue and Customs, includes JCCC members, industry representatives most impacted by Brexit, subject matter experts, and representatives from other Government Departments.
HMRC will give Brexit process updates during the meetings, which will take place six times a year, and members will discuss specific issues with a focus on developing strategic Brexit policy.
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Dr. Toshiyuki Shigemi has been appointed as Executive Vice President as well as Executive Director of ClassNK. Yasushi Nakamura has stepped down as Senior Executive Vice President, and has been appointed as an Advisor to the Society.
Dr. Shigemi joined ClassNK in 1981. After a career including roles in plan approval, ClassNK’s research institute, and on-site surveys, he took up the position of General Manager of the Development Department in 2008, where he was responsible for overseeing ClassNK’s rule development activities for over one decade, at the time when class rules were undergoing major changes, such as development and update of the Common Structure Rules.
Dr. Shigemi graduated from the Department of Naval Architecture, Hiroshima University in 1981, and received his Doctorate of Engineering from Osaka University in 2003.
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The former CEO of Canadian Pacific Railway Hunter Harrison has been named as the new Chief Executive Officer of the CSX Corporation. He replaces Michael Ward who will now become a consultant to CSX.
In addition, three incumbent CSX directors intend to complete their service for the Board at or before the conclusion of the 2017 annual meeting. As a result, the size of the Board will be 13 members. CSX’s current Presiding Director, Edward J. Kelly, III, will become Chairman of the Board and Hilal will become Vice Chairman.
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.
There were a few references to be found when we looked for the Inter-Club Agreement. This one appeared in Issue 262
of July 18th, 2006:-
Foreseeability of loss
SHIPOWNERS have failed in an appeal against an arbitration decision based on foreseeability of loss.
The ‘Kamilla’ was chartered on an amended NYPE form incorporating the NYPE Inter-Club Agreement. It loaded a cargo of lentils for carriage to Algeria but its holds were not watertight and, during the voyage, seawater wetted over one per cent of the cargo. The cargo receivers complained to the Algerian authorities, who prohibited discharge of the cargo.
The vessel was arrested and the owners, who suffered substantial financial loss, claimed a 100 per cent indemnity from the charterers on the basis that the receivers, as agents of the charterers, had failed to take steps to reverse the decision of the authorities. The owners did, however, accept that they were responsible for a very small proportion of the wet damage caused to the cargo.
The charterers argued that the loss was to be borne 100 per cent by the owners as it was damage due to unseaworthiness. But the owners maintained that it was not reasonably foreseeable that the small amount of wetted cargo would cause a total rejection of the consignment.
Arbitrators held that the foreseeability of the loss or damage was irrelevant, and that the correct test was whether the unseaworthiness could be said, in a practical sense, to be a cause of the loss. The owners appealed.
Mr Justice Morison subsequently held that the arbitrators had applied the correct test of causation when they found that the unseaworthiness of the vessel could be said in a practical sense to be a cause of the loss. It did not have to be the effective cause of the loss. (Marine, Energy and Trade Notes, Barlow Lyde & Gilbert).
If……..
If you can start the day without caffeine or pep pills,
If you can be cheerful, ignoring aches and pains,
If you can resist complaining and boring people with your troubles,
If you can eat the same food everyday and be grateful for it,
If you can understand when loved ones are too busy to give you time,
If you can overlook people taking things out on you when, if through no fault of yours, something goes wrong,
If you can take criticism and blame without resentment,
If you can face the world without lies and deceit,
If you can conquer tension without medical help,
If you can relax at any given moment,
If you can always sleep without the aid of drugs,
Then,……..
You are probably the family dog.
[Paul Dixon]