IN THIS ISSUE
1. Direct Actions against Insurers and US Limitation of Liability
2. Debts and Situs
3. The Robots over our Shoulders
4. General Average Words and Meanings
5. Seahorse Club Journalist Awards 2017
6. People and Places
FOB Network News
During the rest of 2017 the Publishers are looking to raise some external finance in order to take our efforts to the next level by supporting more marketing and programming people.
Some FOB Groups already have sponsors – for example JLT (P&I), Bloomfield Law (West Africa Maritime), Chalos (Criminalisation). the Publishers are also looking for sponsors for existing Groups for example Hull & Machinery, Salvage, Piracy, Maritime Singapore/Cyprus/Norway, Superyachts, Surveyors and Major Casualty Investigation.
In addition there is plenty of scope for possible new Groups such as War Risks, Multi-Modal Insurance, Energy Insurance and many geographical areas eg Maritime New Zealand/Germany to name but a few.
1. Please join FOB, and
2. Let us know if you would like a quote for sponsoring a Group
1. Direct Actions against Insurers and US Limitation of Liability
Jason P. Minkin of BatesCarey in Chicago has sent in a note on SCF Waxler Marine, LLC v. M/V ARIS T, 2017 WL 3894705 (E.D. La. Sept. 6, 2017), a recent US court case addressing the interplay between the Louisiana Direct Action Statute that allows third party claimants to bring claims directly against a tortfeasor’s insurer and the US Shipowner’s Limitation of Liability Act. As the court explained, an injured claimant filing a direct action against an insurer stands in the shoes of the policyholder, and thus has no rights greater than the policyholder. The Direct Action Statute “could not be clearer” that any action under the statute is subject to all of the lawful terms and conditions of the policy, including the insurer’s defenses.
SCF Waxler involved an accident in which the M/V ARIS T allided with multiple vessels and facilities on the Mississippi River, allegedly causing substantial damage and economic loss. The ARIS T blamed the accident on unsafe maneuvering by two tugs. The owner and operator of one of the tugs, Cenac Marine Services, filed an action in defense of the claims against it pursuant to the Shipowner’s Limitation of Liability Act, a U.S. federal statute that permits a vessel owner to limit its liability to the post-casualty value of the vessel and the pending freight, except where the vessel owner knew or should have known of the problem that caused the accident beforehand. Two other injured parties, whom the court referred to as the “movants,” sued Cenac’s primary and excess insurers directly pursuant to the Louisiana Direct Action Statute. Cenac’s insurers filed defenses arguing that their liability, if any, was derived solely from their policies’ terms and conditions and that they are entitled to limit their liability to the extent Cenac was entitled to limit its liability to the subject vessels and pending freight. The movants sought summary judgment against the insurers on the grounds that Cenac’s insurance policies did not contain language allowing them to limit their liability vis-à-vis an injured third party (the primary insurers advised that they had no interest in the outcome of motion because their primary $1 million limits of coverage were less than the $14.6 million limitation fund posted by Cenac).
The court rejected the movants’ arguments. The policies in question were excess follow-form policies, and accordingly the legal question turned on the language of the primary P&I cover to which they followed form. The court noted controlling U.S. Fifth Circuit Court of Appeals precedent, which provides that a P&I insurer “may limit its liability to that of the vessel owner’s liability when the terms of the policy allow it to do so.” (See Crown Zellerbach Corp. v. Ingram Industries, Inc., 783 F.2d 1296 (5th Cir. 1986). Recognizing that the Direct Action Statute permits a third-party lawsuit that the policy itself would not permit, the court nonetheless observed that the statute “does not and cannot increase the insurer’s exposure beyond the express terms of the policy,” and does not “impose new liabilities or deprive the insurer of its valid policy defenses” against a third-party claimant. The court distinguished the scenario of an insurer seeking to escape liability not through the terms of its policy, but by invoking the Limitation Act, which is only for the benefit of vessel owners, not insurers. Here, in contrast, the primary P&I policy stated that the insurer would pay loss “as the Assured shall as owners of the vessel named herein have become liable to pay and shall pay….” Accordingly, the court reasoned that the excess insurers’ exposure could not exceed the indemnity limits of their policies.
Moreover, although the Direct Action Statute overrode the “and shall pay” language by permitting the third-party claimants to sue regardless of whether Cenac had yet paid, the Direct Action Statute, according to the court, is clear that any recovery “is within the terms and limits of the policy,” and any direct action is subject to all the terms of the policy, including any defenses. In other words, a third-party claimant stands in the shoes of the policyholder for purposes of a direct action, and may not recover amounts beyond the policyholder’s liability. The court further noted that no “special language” is necessary to effect this result. According to the court, neither U.S. admiralty law nor Louisiana law prohibits a P&I policy from expressly limiting the insurer’s liability to that of the vessel owner.
Although the Direct Action Statute confers unique rights on third party claimants, those rights are relatively modest in scope. As is the case here, while the excess insurers had no right to assert a statutory limitation of liability defense, they were not, according to the court, liable beyond the indemnity obligation imposed by the primary P&I policy to which their policies followed.
2. Debts and Situs
Jeremy Davies and Sarah Hunt of hfw have sent in word of the decision in Taurus Petroleum Limited v State Oil Marketing Company of the Ministry of Oil, Republic of Iraq  UKSC 64:-
In a judgment given on Wednesday 25 October 2017 the Supreme Court has overturned the Power Curber decision and has held that there is no special rule relating to debts represented by letters of credit and that the situs of such debts is, as is usually the case, where the debtor is. The Court also clarified the circumstances in which a receivership order could be made by way of equitable execution.
Read the note in full here:-
3. The Robots over our Shoulders
Gerard Mathews of the London Shipping Law Centre (LSLC) writes:-
We welcome members and other shipping and international commercial professionals to the eighth monthly seminar in the 2017 events programme. The title of our next event is:-
The Robot over your shoulder: technology’s very positive contribution to dispute resolution
Driven by a number of factors but particularly technology, we are at the start of a period of fundamental transformation in legal practice: this is particularly pronounced in relation to contentious matters. This seminar will consider (1) how technology is currently assisting (and may ultimately transform) the work in resolving significant disputes undertaken by solicitors, counsel, arbitrators and the judiciary and (2) what strategies the profession can adopt for success.
Among the matters to be discussed will be:-
How technology’s contribution may slowly change from merely bringing greater efficiencies to legal practice as carried out today to a gradual replacement of some of the tasks currently performed by legal professionals by ‘increasingly capable systems’.
An evaluation of technology’s support of dispute resolution and an appraisal of the new electronic case management and filing systems in the Rolls Building.
Technologies are having a significant impact on operational performance in shipping: how these technologies influence assessors’ analyses in matters of navigation and seamanship in collision cases and the like.
Jim Cashman – Partner and Master Mariner, HFW
Thushani Lawson – Head of research for Professional Services, Deloitte UK
Captain Peter J McArthur, MNM, CMMar, Younger Brother of Trinity House & Director, Norwest Interaction Ltd
Venue: HFW, Friary Court, 65 Crutched Friars, London, EC3N 2AE
Date: Tuesday 7th November 2017 – 6.00pm – 8.00pm
This seminar is accredited for 2 CPD points. For further details and bookings please contact the Centre’s office on 020 7936 3417 or e-mail to:-
Chairman’s tel: 020 7936 3418
All of the Centre’s events are accredited ~ Members – Free. Non-Members – £60.00
4. General Average Words and Meanings
Singapore based M. Jagannath writes in his Nau Newsletter:-
The English Supreme Court, on 25th October 2017, provided its long awaited decision on The Longchamp allowing Owners the expenses incurred for the crew during the period the vessel was detained whilst Owners were negotiating the quantum of the ransom demanded by the pirates. The appeal was heard by a 5-member panel and while the judgement was not unanimous (Lord Mance dissented), the majority decision was provided by Lord Neuberger and with whom Lord Clarke, Lord Sumption and Lord Hodge agreed. The dissenting judgement given by Lord Mance was however on other reasons than those provided by the Court of Appeal.
We had, in our earlier article, General Average – Back to Basics (see link below), argued that adjustment of General Average should be accomplished, by taking a purposive rather than a literal approach, of the York Antwerp Rules (in this case, of 1974). In para 29 of the judgement, Lord Neuberger states “Given that the Rules represent an international arrangement, it is particularly inappropriate to adopt an approach to their interpretation which involves reading in any words or qualification. As already mentioned, it appears to me that, as a matter of ordinary language, Rule F applies to the negotiation period expenses for the reasons given in para 26 above. To imply some qualification such as the requirement that those expenses must have been incurred so as to achieve an “alternative course of action” appears to me to be very dangerous. In the same way as an international convention or treaty, the Rules should be interpreted by a United Kingdom court “unconstrained by technical rules of English law, or by English legal precedent, but on broad principles of general acceptation”, to quote Lord Wilberforce in James Buchanan & Co Ltd v Babco Forwarding & Shipping (UK) Ltd  AC 141, 152. As Lord Hobhouse said in King v Bristow Helicopters Ltd  2 AC 628, para 148, in relation to an article in the Warsaw Convention, “it is the unadorned language of the article to which attention must be directed”.”
The amounts in dispute was for approx. USD 160,000. Given that this matter has progressed up to the English Supreme Court, the sums expended by both parties (Owners and Cargo interests) would easily have surpassed the claimed amounts. As costs follow the event, the winning party would be entitled to recover a portion of their costs. However, it is unlikely that the winning party (Owners in this case) would recover all of their costs. The issue which we would wish to highlight out is while certainty in law has been achieved on this aspect, it has been achieved at great cost, probably surpassing the amounts at stake.
The principles of General Average on this point have now been decided by the English Supreme Court and therefore all future English General Average adjustments would have to keep this in mind i.e. the costs incurred by Owners for crew wages during the period of negotiation with Pirates would be allowable under General Average (unless the York Antwerp Rules are amended on this point).
5. Seahorse Club Journalist Awards 2017
Maria Udy has written in with a last minute reminder for journalists who might like their work considered for this year’s Awards. She has also sent in some Frequently Asked Questions.
Can I submit an article with a dual byline?
Yes of course, but you will have to share the prize money and trophy with your colleague.
Can I submit an article if I am outside the UK?
By all means, we welcome all entries and currently receive entries from across the globe!
Does my submitted article need to be in a final format (i.e. No drafts)?
Yes – you cannot submit an article that has not been published within the set time – in this case November 2016 to October 2017.
What length does my article have to be?
There is no set length.
Can my article be in any language?
Sorry, but no. We only accept submissions in English.
Is it possible to see the comments from the judges re my article?
Again, sorry but no. Unfortunately due to the high number of entries we cannot pass on individual comments.
Do I have to be present to collect my award?
No, but we would obviously love to have you join us, not only to collect your award but to network at the event.
Will you pay my travelling expenses to be there?
No, sorry, we’re a non-for-profit organisation, but again we would love to have you join us and can recommend affordable accommodation if required!
If I am an editor, do I qualify to enter all categories?
Yes (with the exception of Newcomer) as long as you’ve actually written the article and not edited it.
What format does my submission need to be in?
Except for entries for the Social Media Category, all articles must be submitted as a transferable file (PDF, JPEG or a similar image file) and saved as low res as they will be forwarded to the judges electronically.
What is the deadline for my entry?
For the 2017 Journalist Awards the deadline is midnight on 3rd November.
For further details please contact Maria Udy at:-
6. People and Places
Dorothea Ioannou, Global Business Development Director of the American P&I Club, has received the Next Generation Shipping Award for 2017 at the Lloyd’s List Global Awards in London, on September 27, 2017.
The Next Generation Shipping Award honors a rising “shipping industry leader who has made an outstanding contribution to the industry”, according to Lloyd’s List. Judges were looking for someone “brimming with fresh ideas, new priorities and genuine potential.” Her innovative approach and market presence were referenced at the ceremony as significant factors in the decision.
Dorothea Ioannou is a lawyer, admitted to practice in the state of New York. She began her employment with SCB (Hellas) Inc., the Piraeus Office for the American Club’s managers, in 2005 and became the Deputy Claims Manager in 2008. In December 2009 she became Claims Manager and was appointed Managing Director of the Piraeus office. She later took on the role of Business Development Director for the Europe/Middle East/ Africa region and her regional business model was so effective that soon after she was promoted to her present position, with overall responsibility for the Club’s global business development, in 2015, with tonnage growth growing over 20% since then.
Sebastiaan Scholte, CEO of Jan de Rijk Logistics, takes over as TIACA chairman from Sanjiv Edward, Head of Cargo Business, Delhi International Airport.
Scholte was previously TIACA Vice Chairman for two and a half years and has worked in the air freight industry for over 20 years. He held senior management roles with Cargolux for eight years from 2002 and took over as CEO at Jan de Rijk Logistics in 2010.
He is joined on the TIACA board by new Vice Chairman Steven Polmans, Head of Cargo and Logistics at Brussels Airport Company (BAC). Prior to joining BAC in 2010, Polmans worked for ground handler Aviapartner, before moving on to logistics marketing specialist GLU4 BV where he managed the company’s Benelux operations.
ITOPF has announced that Julke Brandt and Duarte Soares have joined as technical advisers in October and Vanessa Holliday as HR manager in September.
Brandt holds a Master Mariner Certificate of Competency, a BSc in Nautical Science and an MSc in International Marine Environmental Consultancy. She previously worked as a visiting researcher for Newcastle University, where she processed and analysed satellite imagery to map marine habitats and bathymetry in the Caribbean.
Soares has an MSc in Petroleum Geoscience and a PhD in seismic stratigraphy. Before joining ITOPF, he worked as a geologist evaluating the hydrocarbon potential of several basins around the world and undertaking international business development focused on South and Central America. He has also worked in Angola as a geologist on a diamond mine and prospecting for gold and base metals.
Holliday has a business studies degree, a post graduate diploma in people management and is a Chartered Member of the CIPD, the professional body for HR and people development. She brings experience from a varied background in HR Management, most recently in the not for profit and public sectors.
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 for a droll reference to journalists and journalism, we ran into this characteristic stream of consciousness from our distinguished predecessor Chris Hewer which appeared in Issue 165 on 20th July 2004. Where do the time go?
“IT is well known that non-aqueous media which has been titrated potentiometrically gives valuable information about the basicity or acidity of a compound.”
This is a reference to potentiometric titration on the internet – that is to say, the internet is where the reference is to be found. Your editor found it there by accident, while looking for the cricket scores. But what does it mean?
“Nothing”, is the answer. It is clearly not right to say that potentiometric titration – or any other kind of tritation – is “well known”. It is NOT well known, even in the bunkering industry, or the titration industry for that matter.
What IS well-known is the fact that two wrongs do not make a right angle. Or, as Benjamin Franklin once said, “The learned fool writes his nonsense in better language than the unlearned fool, but it is still nonsense”
West Indies were 373 for 6, Brian Lara having retired. Not hurt. Not retired from cricket. Just retired. On 113. It could be a long summer.
Best tagline on a press release of the week
Please treat this message as confidential
Homophone of the week
“[The ship] will also get new rigging and sales” (Lloyd’s List)
Bluntest email of the week
Your surname is too short
Save the whales. Collect the whole set.
A day without sunshine is like, night.
On the other hand, you have different fingers.
I just got lost in thought. It was unfamiliar territory.
42.7 per cent of all statistics are made up on the spot.
99 per cent of journalists give the rest a bad name.
I feel like I’m diagonally parked in a parallel universe.
Honk if you love peace and quiet.
Remember, half the people you know are below average.
He who laughs last thinks slowest.
Depression is merely anger without enthusiasm.
The early bird may get the worm, but the second mouse gets the cheese.
I drive way too fast to worry about cholesterol.
Support bacteria. They’re the only culture some people have.
Monday is an awful way to spend a seventh of your life.
A clear conscience is usually the sign of a bad memory.
Change is inevitable, except from vending machines.
Get a new car for your spouse. It’ll be a great trade
Plan to be spontaneous tomorrow.
Always try to be modest, and be proud of it.
If you think nobody cares, try missing a couple of payments.
How many of you believe in telekinesis? Raise my hand.
OK, so what’s the speed of dark?
How do you tell when you’re out of invisible ink?
If everything seems to be going well, you have obviously overlooked something.
When everything is coming your way, you’re in the wrong lane.
Hard work pays off in the future. Laziness pays off now.
Everyone has a photographic memory; some just don’t have film.
Eagles may soar, but weasels don’t get sucked into jet engines.
What happens if you get scared half to death twice?
I couldn’t repair your brakes, so I made your horn louder.
Why do psychics have to ask you for your name?
Always read stuff that will make you look good if you die in the middle of it.
Drive carefully. It’s not only cars that can be recalled by their maker.
Eat a live toad in the morning and nothing worse will happen to you for the rest of the day.
If you can’t be kind, at least have the decency to be vague.
If you lend someone $20, and never see that person again, it was probably
It may be that your sole purpose in life is simply to serve as a warning to others.
Never buy a car you can’t push.
Nobody cares if you can’t dance well. Just get up and dance.
The early worm gets eaten by the bird, so sleep late.
Birthdays are good for you; the more you have, the longer you live.
If ignorance is bliss, why aren’t there more happy people?
Some mistakes are too much fun to make only once.
A Missouri farmer passed away and left 17 mules to his three sons.
The instructions left in the will said that the oldest boy was to get one-half, the second oldest one-third, and the youngest one-ninth.
The three sons, recognizing the difficulty of dividing 17 mules into these fractions, began to argue.
Their uncle heard about the argument, hitched up his mule and drove out to settle the matter. He added his mule to the 17, making 18.
The oldest therefore got one-half, or nine, the second oldest got one-third, or six, and the youngest son got one-ninth, or two.
Adding up 9, 6 and 2 equals 17.
The uncle, having settled the argument, hitched up his mule and drove home.
Farmer Boy–An Example to us All
The farmer’s son was returning from the market with the crate of chicken’s his father had entrusted to him, when all of a sudden the box fell and broke open.
Chickens scurried off in different directions, but the determined boy walked all over the neighborhood scooping up the wayward birds and returning them to the repaired crate.
Hoping he had found them all, the boy reluctantly returned home, expecting the worst.
“Pa, the chickens got loose,” the boy confessed sadly, “but I managed to find all twelve of them.”
“Well, you did real good, son,” the farmer beamed. “You left with seven.”