The Maritime Advocate online–Issue 626


1. The Eleni P
2. Preventing Deterioration in Condition of Casualty-Stricken Ships–Who Pays?
3. BIMCO/ICS Survey
4. News from Brussels–Combined Transport in Europe not all it could be
5. Bow to Bow with the Maersk Edinburgh
6. People and Places

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1. The Eleni P

The latest addition to the Arbitration & Jurisdiction section of David Martin Clark’s CaseNotes website is by Jim Leighton and relates to a decision of the English High Court in the case Transgrain Shipping BV v Deiulemar Shipping SpA and Eleni Shipping Ltd (The “Eleni P”). In the context of a challenge under s.67 Arbitration Act 1996 to the jurisdiction of the arbitration tribunal, the Court, faced with the task of interpreting two dispute resolution clauses in a charterparty, which were in part inconsistent with one another, gave precedence to the BIMCO arbitration clauses over a bespoke clause, on the grounds that, objectively viewed, the intention of the parties was that the tribunal be constituted pursuant to the BIMCO clauses, which were the “industry standard” and had the benefits of a mediation provision.

In commenting on the decision, Leighton says: “The interesting point to note is that the standard BIMCO arbitration clauses were given preference over the bespoke arbitration rider/additional clause. The objective rationale was that, where other factors appeared evenly balanced, the BIMCO arbitration clauses are considered to be the “industry standard”, with the benefit of LMAA endorsement, coupled with the increasing value placed on the benefits of mediation by commercial parties as an adjunct to arbitration.”

2. Preventing Deterioration in Condition of Casualty-Stricken Ships–Who Pays?

James Brewer writes:-

Who – shipowner or insurer – should bear the costs of any action taken to prevent a stricken vessel from getting into further costly difficulties? A seminar organised jointly by the Association of Average Adjusters and the International Underwriting Association heard that the market had long wrestled with the arguments, and that considerable uncertainties remain.

The London event was given an outline of the main provisions of what could count as ‘sue and labour’ – a clause in marine policies under which the assured can recover reasonable expenses for minimising or averting an insured loss.

Two former chairmen of the Association of Average Adjusters, Keith Jones and Richard Cornah, updated the packed meeting on the implications of recent cases (which may yet be subject to appeal) where very large sums were at stake. The Association entitled the event Still Totally Lost – in a reference both to the term “constructive total loss” (CTL), and the uncertainties that may follow. A CTL arises when the ship is so damaged by insured perils that the cost of recovery and repair exceeds the insured value.

Mr Jones, of broking group Aon, reminded the audience that where the assured opts for a CTL he must give notice of abandonment to insurers; otherwise the loss can only be treated as partial. Under the standard clauses, underwriters will pay a proportion of expenses (in excess of proceeds) reasonably incurred in saving or attempting to save the vessel and other property. General Average and salvage charges are not recoverable as sue and labour.

Reviewing much deliberation by English courts on the issues, Mr Cornah said that the upshot was that “pretty well anything can be considered ‘sue and labour’ according to the circumstances.” Especially important though was the question of the timing of the procedural steps. Cases he cited supported the principle that sue and labour can extend to preserving residual value in the vessel if it is to the benefit of underwriters. Nothing was excluded, but there had to be potential benefit to insurers.

Mr Cornah, who is chairman of Richards Hogg Lindley, cited the case of the “B Atlantic”. In August 2007, the vessel was detained in Venezuela and the crew arrested after drugs were found attached to the hull. In October that year, the master was sent for trial and detention of the vessel confirmed. In June 2008 notice of abandonment was served, and underwriters responded with a “writ clause.” The ship was declared a CTL six months after the seizure, in accordance with the special detention clause in the policy.

Much legal expense was incurred in attempting to release the vessel and crew, and there were crew wages and other vessel running expenses to be paid. Insurers said that the right of the assured to recover sue and labour expenses ceased on the date of the first notice of abandonment by virtue of the agreed “writ clause.” They also argued that the legal costs were not sue and labour because they were incurred both for the release of the vessel and the defence of the crew. An English judge disagreed with that reasoning on the basis of previous case law and on the grounds that the release of the crew would have facilitated the release of the vessel. The court characterised trying to make the best of the situation as sue and labour.

How could wages be allowed as sue and labour if the assured was under a contractual obligation to man the vessel? In fact, it was held by the court that the cost of full manning should be allowed because the vessel had to be ready to sail if the detention were suddenly lifted, although the notional cost of providing a skeleton crew should be for owners’ account.

Mr Cornah went on to look at the case of the suezmax tanker “Brillante Virtuoso”, which in 2011 was attacked by pirates off Aden and ordered to sail to Somalia. There was an explosion and fire in the engine room and the pirates left. The ship was towed to Khor Fakkan under a Lloyd’s Open Form contract and was subsequently attended by two tugs on standby until it was sold for scrap.

The owner did not lose the right to claim a CTL by selling the vessel, said the judge in the case, and the standby tugs counted as sue and labour. Any accident such as the vessel running aground or collision could have resulted in the ship becoming an actual total loss or sustaining damage which would have affected its residual value. The judge affirmed that sue and labour could extend to preserving the residual value of a ship if that was to the benefit of the insurers.

The judgment in this case is also to be recommended, said Mr Cornah, for its detailed analysis of estimated repair costs. The approach the court took was that you had to look at the situation in the round, and not just the numbers – and if necessary add quite a large margin to the numbers.

Mr Cornah referred to three phases in handling a casualty. Attempting to prevent a CTL clearly gave rise to sue and labour; if this were unsuccessful, attempting to preserve value could also qualify if there were potential benefit to insurers; if the worst happened, wreck removal brought the situation into the territory of protection and indemnity cover. One of the things that often remained unclear was the transition point between safeguarding residual value and a wreck removal operation: on this question, hull underwriters needed an ‘exit strategy.’

3. BIMCO/ICS Survey

Debra Munford and Gemma Wilkie write:-

A new survey being carried out as part of the BIMCO/ICS Manpower Report 2015 is directly engaging seafarers in order to understand their views on life at sea and outlook for the industry’s manpower in the years ahead. Preliminary results of the new survey indicate that the majority of respondents are content with life at sea.

The BIMCO/ICS Manpower Report, which has been published every five years since 1990, has traditionally been based on two main quantitative data sources from which the current seafarer supply and demand situation is estimated: a questionnaire completed by shipping companies and a questionnaire completed by national maritime administrations.

In addition to those sources, the new Manpower Report will also solicit the opinions from a wider number of maritime professionals with knowledge of the ‘sharp end’ of the manpower supply situation, including seafarers, lecturers at maritime education and training (MET) institutions, manning agents, maritime unions, and port welfare workers.

The survey of seafarers is the first of the targeted surveys for this year’s report. More than 500 seafarers have already responded to the survey, representing over 40 nationalities. Some of the other preliminary findings include:

*‘Happy ships’, timely wage payments and career promotion opportunities were the most popular responses indicated when seafarers were asked about the important factors that influenced their decisions to stay with their current employers;
*66% of the seafarers that responded estimated that it would take them less than three months to secure another job in the industry if they chose to leave their current company; and
*Basic pay and internet access were the most popular responses provided as improvements in conditions at sea when asked about changes within the past two years.

The survey also points towards the impact that increased regulation of the industry has had on the seafaring profession. One seafarer responded: “This is a great career, but an increasingly technical and administrative one so it is no longer as much an adventure as simply a job, albeit one with the possibility of adventure!”

More information, including how to participate in the surveys, can be found at the project website:-

4. News from Brussels–Combined Transport in Europe not all it could be

Nicolette van der Jagt of CLECAT has kindly sent in her organisation’s e-zine which contains this item:-

The European Commission has published a study, prepared on its behalf by a group of consultancies and research institutes, on an analysis of EU Combined Transport. The study assesses the current economic and legal state of combined transport in the EU, as well as investigating trends in the evolution of combined transport and how the regulatory framework may be enhanced.

The study finds that combined transport in the EU has a market share equivalent to 12% of total road freight, and 9% of all surface freight. It notes that while policy-makers and end users wish to see greater use of combined transport, few customers actually make use of it.

Challenges which combined transport faces include:

* Poor performance caused by service providers failing to recognise, adopt or improve on performance benchmarks or continuous innovation;
*The failure of rail liberalisation to achieve full unbundling of infrastructure and train operators;
* Failure to accompany intermodal infrastructure with interoperability;
* Lack of electronic infrastructure for combined transport, such as for data transmission of journey planning;
* Poor data collection relating to combined transport services.

The study identifies incentives which may aid the growth of combined transport, namely direct grants for combined transport operations, and direct grants for the construction of combined transport infrastructure. The study recommends potential review of the EU Combined Transport Directive in order to improve its functioning and implementation by Member States, and further engagement with the combined transport sector to determine the extent to which a high-level data gathering network can be established by voluntary means alone.

The full study, which is quite a lump, can be read via the link below. There is still a great deal of talk within the EC, but the barriers to action are as high as ever. The report is something people who are interested in the mosaic of transport law, history and industry practice should all read.

5. Bow to Bow with the Maersk Edinburgh

Courtesy of the always interesing gCaptain zine we came across these interesting clips. Shipping TV’s Chris Gosling takes his camera aboard the tug Svitzer Shotley as the tug goes bow to bow with the mighty Maersk Edinburgh – 243 tonnes of tug vs the 141,716 tonne container giant. Part 1 above shows hook-up and swing.

In Part 2 of the video below, you see the berthing of Maersk Edinburgh, along with a look at Svitzer Shotley’s engineroom. Finally, Svitzer Shotley is shown taking position astern of MSC Athos, to lift her off the quayside as she sails for Suez.

Chris Gosling’s “old geezer’s diary” is worth a visit:-

for gCaptain go to:-

6. People and Places

Mid-tier accountancy firm Chantrey Vellacott DFK LLP is to merge with Moore Stephens LLP.

The firms, which together have been providing services for over 330 years, will use the Moore Stephens name and brand. The combined partnership will become members of the Moore Stephens International network, which has a turnover of $2.7 billion and offices in 103 countries.

The merger will complete on 1 May, at which point the combined partnership will begin trading as Moore Stephens LLP, with the London offices consolidating into 150 Aldersgate Street over the coming months. Current Moore Stephens managing partner Simon Gallagher will lead the amalgamated firm, with Richard Moore remaining as senior partner. Chantrey Vellacott’s managing partner Mike Tovey will be joining the firm’s Partnership Executive Committee.

IBIA – International Bunker Industry Association – has appointed Jason Leong to head up its Singapore office and lead expansion in the Asia-Pacific region.

Jason Leong has a deep knowledge of Asia Pacific markets and brings experience of the marine lubricants sector having previously worked for Castrol, Chevron and Hess Corporation. He is a qualified marine engineer (seagoing) with a career that spans four decades.

Michelle Mo, a professional administrator, has also been appointed. Michelle will manage the day-to-day business of the office and provide support to Jason.

Admiralty lawyer Stephen Askins has joined the law firm of Tatham Macinnes LLP


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.

Item 5 above sent us looking through the archive against the search term “leviathan. Before we could commence our researches in earnest we were struck by this item in Issue 164 dated 13th July 04.

:Maw or less

WE are not used to seeing humour in press releases, and especially not in press releases from law firms. So it was with increased respect for the legal profession that your editor read in a release this week from E G Arghyrakis & Co that its new partner William Cawley “speaks passable French, as well as very little Norwegian and Korean.”

William, it seems, decided to move from Stephenson Harwood to Arghyrakis because he thought that “a small and flexible firm” was the answer for somebody who was becoming “more and more disillusioned with the ever-increasing demand to feed chargeable hours into the insatiable maw of the Leviathan.”

This may sound a little dramatic, but your editor has a great deal in common with William Cawley. Your editor’s French is passable. Indeed, it has been passed entirely by anybody who can speak that beautiful language. He speaks very little Norwegian and Korean. And chargeable hours have been a way of life for almost ten years, during which time the best entry he has seen on a time sheet has been, “Chasing Monica – One Hour.”

William can’t have everything. He is a lawyer, and must therefore charge for his time. If your editor could speak French, and if he was not required to account for his time, he would spend his life haunting secondhand bookshops on the left bank. Je reste mon attach? (encore).

Quiz for the Learned–only 4 out of 10 for a Pass

1) How long did the Hundred Years’ War last?
2) Which country makes Panama hats?
3) From which animal do we get cat gut???
4) In which month do Russians celebrate the October Revolution???
5) What is a camel’s hair brush made of?
6) The Canary Islands in the Pacific are named after what animal???
7) What was King George VI’s first name???
8) What colour is a purple finch???
9) Where are Chinese gooseberries from???
10) What is the colour of the black box in a commercial airplane?

Check your answers below ..

1) How long did the Hundred Years War last? 116 years
2) Which country makes Panama hats? Ecuador
3) From which animal do we get cat gut? Sheep and Horses
4) In which month do Russians celebrate the October Revolution? November
5) What is a camel’s hair brush made of? Squirrel fur
?6) The Canary Islands in the Pacific are named after what animal? Dogs
?7) What was King George VI’s first name? Albert
8 ) What colour is a purple finch? Crimson
9) Where are Chinese gooseberries from? New Zealand
10) What is the colour of the black box in a commercial airplane? Orange

Loss Inconsolable

Husband went to the police station to report that his wife was missing…

Husband: My wife is missing. She went shopping yesterday and has not come home…
Sergeant: What is her height?
Husband: Gee, I’m not sure. A little over five-feet tall.
Sergeant: Weight?
Husband: Don’t know. Not slim, not really fat.
Sergeant: Color of eyes?
Husband: Never noticed.
Sergeant: Color of hair?
Husband: Changes a couple times a year. Maybe dark brown.
Sergeant: What was she wearing?
Husband: Could have been a skirt or shorts. I don’t remember exactly.
Sergeant: What kind of car did she go in?
Husband: She went in my sports car.
Sergeant: What kind of sports car was it?

Husband: Well. It is a Mercedes-Benz C63 AMG 6.3 7G-Tronic Edition 125 Coupe finished In Magnetite Black Metallic with Black Leather AMG Sport Seats and Brushed Aluminium plus Piano Black Cappings; Unmarked 19″ AMG Multispoke Alloy Wheels; Tyre Pressure Monitoring; Panoramic Glass Electric Tilt/Slide Sunroof; COMAND Online with HDD Wide Screen Satellite Navigation, Bluetooth Telephone Connectivity, Multi-Media Interface (MP3,Ipod etc), Superb Sound System With DAB and Harman-Kardon Sound Upgrade; Leather Trimmed AMG Multi-Function Steering Wheel with Paddle Shift; Parktronic Front and Rear Parking Sensors; Parking Assist; Attention Assist; Speed Limit Assist; Electrically adjustable, heated door Mirrors with Powerfold; Electrically Adjustable with Heated Front Sport Seats with Memory; Electrically Adjustable Steering Column; Bi-Xenon Headlights withPowerwash and Auto Activation; LED Daytime Running Lights; Cruise Control; Rear Privacy Glass; AMG Carpet Overmats…

At this point the husband started choking up.

Sergeant: Don’t worry, pal. We’ll find your car…

[Source: Frazer Hunt]

Thanks for Reading the Maritime Advocate online

Maritime Advocate Online is a weekly digest of news and views on the maritime industries, with particular reference to legal issues and dispute resolution. It is published to over 15 500 individual subscribers each week and republished within firms and organisations all over the maritime world. It is the largest publication of its kind. We estimate it goes to around 45 000 Readers in over 120 countries