1. Two tales of four jurisdictions
2. Anchor awareness
3. Lessons from accidents
4. Further tensions in the South China Sea
5. Piracy – an evolving business
6. Drone delivery – must watch video!
7. Watch out for rise in oil trade litigation
8. New OPEX assessments for tankers
9. Scaling the Himalaya Clause
10. People and Places
PLUS: A joke or three, and another poem
Readers’ responses to our articles are very welcome and, where suitable, will be reproduced:
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1.a A tale of four jurisdictions – delivery of cargo without production of original bill of lading
This article by Edward Liu, partner, and Felix Cheung, associate, both with Hill Dickinson Hong Kong,
was written for and published in The Journal of International Maritime Law (JIML). It addresses an old
chestnut which would cause a young ships’ agent in Hong Kong to deliberate on many occasions
back in the early seventies.
Delivery of cargo without the production of the original bill of lading, although not ideal, is prevalent in
the context of international trade. A bill of lading (B/L) serves the essential purposes as evidence of
the contract of carriage, a receipt of the quantity and description of goods shipped, and the document
of title to the goods. Its basic features are that it contains promises by the carrier to carry the goods to
the agreed destination subject to the terms of the document, and to deliver them, in accordance with
those terms. It is a longstanding doctrine in maritime law that delivery must be a simultaneous
exchange of goods and the original B/L, in that no delivery shall be made to the receiver without the
presentation of the original bill (the ‘presentation rule’). The carrier would therefore be liable to the
person lawfully in possession of such a B/L if he wrongly delivers the goods to anyone else. While
delivery of shipment without the production of the original B/L risks potential claims of misdelivery by
the lawful holder of the bill, due to issues such as loss of the bill or delay in transit between parties of
multiple trades, inability to present the original B/L is not uncommon in international trading.
This essay analyses the legal implications of delivery of cargo without the production of the original
B/L in the context of English, Hong Kong, Chinese, and Taiwanese law. Following a brief introduction
to the legal implications of the original B/L in the four jurisdictions, the article will then investigate the
reasons for delivery of goods without presenting the original B/L. It then discusses under what
circumstances the presentation rule can be circumvented in those jurisdictions, and ultimately, the
essay outlines the future trend of development for the B/L.
1.b Letter of indemnity – container carriers
And on the same subject, from M. Jagannath of Nau Pte Ltd in Singapore.
Due to the present lockdown’s in many jurisdictions, there have been many requests made to Container Carriers (CC) to release cargo’s without presentation of Original Bills of Lading (Bs/L) given that the documents are still in transit due to courier issues. Instead of the Original Bs/L, the cargo interests are willing to provide a Letter of Indemnity (LOI) / Bank Guarantee till such time the Original Bs/L is surrendered. We had earlier written on the issues related to release of cargo against a letter of indemnity/bank guarantee and also spoken on the same topic.
We are revisiting this topic, but our intention is not to repeat what we have stated earlier. In the new world which we all are entering into and perhaps the lockdown is a catalyst, we anticipate the increased use of electronic platforms / processes for the various documents / information flows. This would in turn lead to the increased use of LOI’s being provided to the CC’s by the cargo interests.
The increased use of electronic systems in the document flows would be for the following:
- Remote printing of Bs/L and Delivery Orders
- Electronic Bs/L & Electronic Delivery Orders
- Electronic LOI’s instead of being provided in paper. If paper documents are still being used, then release of cargo without presentation of Original Bs/L, Change of destination and Switch Bills of Lading would continue to require the cargo interests to provide LOI’s to the CC to facilitate such transactions.
2. Anchor awareness
In the current trading environment, GARD P&I reports that, with the ongoing COVID-19 pandemic and worldwide economic downturn, the period spent waiting at anchorage outside ports around the world may increase for some ships. Lost and dragging anchors are the root causes of many groundings and collisions occurring while waiting at anchorages, and ship operators, Masters and crew need to be aware of the risks involved and thoroughly assess the limitations of a vessels’ anchoring equipment.
3. Lessons Learnt
Every year, the UK P&I Club deals with thousands of claims using the expertise and experience of its professional claims handlers, ex-seafarers and lawyers. Each month the Loss Prevention team aim to share some of the Club’s claims experience, by looking at real case examples and identifying lessons learnt to help Members avoid similar incidents.
Latest Lessons Learnt:
- Enclosed space fatality
- Crew mooring injury
- Defective lube oil cooler causes pollution
4. New South China Sea tensions rattle Manila and Hanoi amid pandemic
A geopolitical topic that frequently rears its head, but seems to defy resolution. Here Cliff Venzon of the Nikkei Asian Review reports from Manila.
While sailing toward the Philippine-occupied Commodore Reef in the South China Sea, a Philippine Navy vessel spotted a grey ship and made radio contact. The response was blunt.
“The Chinese government has immutable sovereignty over the South China Sea, its islands and its adjacent waters.”
The grey ship belonging China’s People’s Liberation Army Navy directed its fire control radar at the Philippine vessel, indicating “hostile intent,” according to the Philippine Navy.
The encounter, which ended peacefully and was belatedly disclosed by the Philippine government on Thursday, took place on Feb. 17 while the coronavirus crisis was engulfing China. But as Southeast Asian nations fight widening outbreaks of their own, observers say Beijing has renewed efforts to consolidate its control over disputed parts of the South China Sea, ratcheting up tensions among rival claimants.
U.S. Secretary of State Mike Pompeo yesterday accused China’s Communist Party of “exploiting the world’s focus on the COVID-19 crisis by continuing its provocative behaviour.” In a video conference with Southeast Asian counterparts, Pompeo attacked China’s “new unilateral announcement” of two new administrative districts in the South China Sea, its sinking of a Vietnamese fishing vessel this month, and its “research stations” on Fiery Cross Reef and Subi Reef.
5. Sea Piracy in 2025: Piracy 2.0?
Francois Morizur, writing for Maritime Executive writes that pirates have demonstrated their ability to revise their modes of operation in response to maritime industry behaviour and the responses of coastal states. When looking at the Gulf of Guinea, confirmed as the main world maritime piracy hotspot for almost five years, it’s interesting to consider that evolution. Before 2010, piracy in the Gulf was limited to coastal area less than 30 nautical miles from shore. As ships kept their distance from shore, the pirates improved theirs range of operation with the use of mother vessels but also, very quickly, with new capacity to operate their skiffs without mother vessels out to 100-120 nautical miles from shore. They improved their endurance, safe sailing ability and communication to connect with their targets.
That quick evolution is, technically, impressive. Their means of boarding is evolving quickly too. Recent pictures of the attempted boarding of the MT Scarabe on March 25, 2020 off Nigeria showed the use of an aluminum ladder estimated to be almost 10 meters long. The pirates were able to raise the ladder from a skiff sailing at high speed alongside the vessel.
6. F‑Drones completes first commercial supply delivery by drone at Singapore
Malcolm Latarche for ShipInsight, records an impressive first for Singapore. Don’t miss the video!
Singapore-based start-up in marine logistics F-drones has completed the first commercial BVLOS (beyond visual line of sight) drone delivery in Singapore. The drone delivered 2kg of vitamins over 2.7 km in seven minutes, to a ship managed by Eastern Pacific Shipping (EPS). EPS, which is one of the world’s largest privately-owned ship managers, is F-drones’ first paying customer.
In Singapore, as in most parts of the world, a BVLOS authorisation or permit is required when operating drones beyond the visual range of drone pilots. Without which, commercial drone delivery services would not be viable.
F-drones is the first company in Singapore to receive an authorisation from the aviation authority, to conduct BVLOS drone deliveries to ships. For now, this is limited to drone deliveries to ships anchored south of the marina area. This already is a significant milestone for both F-drones and Singapore, as globally, there are only a handful that are operating commercial BVLOS drone deliveries. And F-drones is already working towards expanding their area of operations.
7. Oil trading litigation expected to rise
Richard Southern QC and Richard Sarll of 7KBE Barristers explain one more expected consequence of COVID-19.
The last weeks have seen extraordinary market conditions in the oil trading sector, with steep reductions in the price of oil yet extreme increases in tanker freight rates. Substantial volumes of litigation can be expected. One issue likely to arise is the recoverability of hedging losses caused by delay in or non-performance of contracts for sale and purchase of oil and oil products. This article presents a summary of the law which the authors will be of use to those tackling this difficult subject.
8. New OPEX assessments for tankers
The Baltic Exchange has added quarterly assessments of the cost of operating crude oil carrying Aframax tankers and clean product carrying Medium Range (MR) tankers to its growing suite of shipping investor tools. The new service is based on assessments made by independent third-party ship management companies Anglo Eastern, Fleet Management and V-Ships. Using the full suite of independent Baltic Exchange indices, investors are now able to benchmark daily vessel earnings, running costs, sale & purchase and recycling prices. The same vessel descriptions are used across all the datasets.
For the new tanker assessments, each panel member submits four numbers, expressed in USD per day:
- Crew (USD per day, including all fees)
- Technical (USD per day, including all fees)
- Insurance (USD per day, including all fees and rebates)
The fourth, an assessment of a five year Drydock cost, is amortised over five years to give a USD/day price, but published separately and does not contribute to the headline OPEX calculation.
9. Freight Forwarder – Cargo – Carriage – Terms – Shipments – Himalaya Clause – CIFFA Terms
Canada’s AdmiraltyLaw.com site contains an abundance of new and updated cases.
This one, Labrador-Island Link General Partner Corporation v. Panalpina Inc., concerned damage to two cargo shipments of aluminum conductor reels (collectively, the “Cargo”). An affiliate of the plaintiffs, Nalcor, retained the defendant Panalpina to provide, inter alia, freight forwarding services for an electrical transmission project under a Freight Forwarding Service Agreement (“FFSA”) in which Nalcor would provide specifics of cargos and make a Request for Quotation (“RFQ”) for Panalpina to obtain quotes from carriers for the shipment of same.
If the quote was accepted, Nalcor would issue Panalpina a Material Moving Ticket (“MMT”) which confirmed various details about a cargo’s movement. Panalpina contracted the defendant Logistec Stevedoring Inc. for the receipt and storage of the Cargo at its terminal in Trois-Riviers, and also contracted the defendant Desgagnes Transarctik Inc. for the transportation of the Cargo by sea. The Cargo was to be shipped by sea from Quebec to Newfoundland, with the first shipment shipped on 28 May 2015 (the “May Shipment”) and the second on 28 October 2015 (the “October Shipment”).
During discharge operations both the May Shipment and October Shipment were found to be damaged, and Nalcor put Panalpina on notice of intent to claim for damages to the Cargo on 09 September 2015 and 02 November 2015 respectively. The plaintiff commenced the underlying action for damages on 29 May 2017.
10. People and Places
Ince has announced that Julian Clark, the former Head of Global Shipping at an international law firm,
has taken up his position as the firm’s Senior Partner. He is based in London, but will take global
responsibility for the firm’s practice sectors and client base, both in the UK and internationally.
Maritime solicitors Waterson Hicks, who have a strong presence in the Greek market, have been joined by George Panagopoulos who becomes the managing partner of the firm’s Piraeus office.
Charles Taylor have announced changes to its Board and Executive Committee. Edward Creasy is appointed Executive Chairman for the Group, alongside Tamer Ozmen who also re-joins the Charles Taylor Board. Richard Yerbury is promoted to Group Chief Operating Officer. David Marock has decided to step down as Group CEO.
The Baltic Exchange and Institute of Chartered Shipbrokers webinar on the theme of environment and technology for Europe and the Americas, will take place on 13 May at 3pm London (5pm Athens, 10am Stamford). Philip Bacon, Consultant at Icthus Marine Ltd and Senior Nautical Advisor at Shell, will be presenting; ‘Shipping and the Environment: moving the conversation beyond 2020’.
“As expected, Shipping has cleared the 2020 hurdle without major disruption. In this session, we will cast our vision ahead, and wider, moving on from Sulphur emissions to the other known impacts that shipping has on the environment – and those that the environment may have on Shipping. We will briefly explore some of the expressions we hear floating around the industry, and the broader political and social spectrum beyond shipping.”
And the Baltic Exchange and Institute of Chartered Shipbrokers webinar on the theme of economics, for Asia will be taking place on 13 May 2020 at 12pm Singapore (Shanghai and Hong Kong). David K. Jordan, Regional Director, Asia, Maritime Strategies International will be presenting; ‘Shipping cycles and the impact of Covid-19 on the shipping industry’.
The Baltic and Institute of Chartered Shipbrokers series is aimed at building wider industry knowledge amongst younger chartering and operations staff. The webinars in this series will be free of charge and open to all.
Lloyd’s Maritime Institute’s Cargo Surveying Advanced Diploma: Expert in Stowage, Lashing and Securing Surveys. This course has been designed to provide marine cargo specialists and operations staff with solid marine knowledge required to understand the role of the marine cargo surveyor and the details of the surveys, inspections, claims and investigations for cargoes and damage to cargoes so they can perform as effective marine cargo surveyors. Anyone who services the global cargo inspection market and feels they would benefit from a more structured knowledge of the elements of commodities trade and inspections will find the course extremely beneficial.
Richards Hogg Lindley Maritime Law & Marine Insurance Claims course will be held on 7 – 11 September 2020 at Pewterers’ Hall, London. The objective of the course is to provide you with the confidence to deal with the claims situations faced in the maritime industry. This course is therefore designed to develop your understanding of the principles and practice involved in handling and settling marine claims. Through a mixture of formal lectures, discussions, question and answer sessions and case studies, we will:
- Review the law and practice which underlie much of marine claims handling.
- Present practical examples of casualties, demonstrating appropriate responses and procedures and identifying who does what.
- Examine the preparation of claims.
- Provide a forum where ideas can be received and exchanged.
Course notes will be provided for each subject.
Preparatory work to deliver a London International Shipping Week in 2021 that will be more relevant and internationally-focused than ever before is well underway as London and the UK look to a trading future outside of the EU and an industry free of the economic constraints imposed by this year’s Coronavirus pandemic. LISW21, which will be held in the week of September 13-17, 2021.
Please notify the Editor of your appointments, promotions, new office openings and other important happenings: email@example.com
And on an alternative note:
In case of interest, Editor, Nick Elliott is the author of a trilogy of maritime thrillers. Sea of Gold, Dark Ocean and Black Reef are available from all Amazon sites. Details here: https://nickelliott.org/
Disconcerting news from S&P broker, Andrew Watson of Southport Atlantic, Jupiter, Fl who reports: “The Old Man and the Sea – Annual Ernest Hemingway Lookalike Contest at Sloppy Joe’s Bar in Key West cancelled for 2020 – bad news for all of us growing lockdown beards…”
Courtesy of The Sunday Times, here are a couple (get it?) of economist jokes:
A candidate in an economics exam points out to the invigilator, an economist himself, that the questions are the same as last year, to which he replies: “Yes, but the answers have changed.”
A chemist, a physicist and an economist are stranded on a desert island with only a can of beans for survival. The chemist says he can devise an explosion to get it open, the physicist, a mechanism involving a stick and a stone. Economists make assumptions so the economist says: “Let’s assume a can opener.”
A mathematician, an accountant and an economist apply for a job. The killer question is: “What do two and two equal?” The mathematician says: “Four”. The accountant says: “Give or take 10 percent, four.” The economist says: “What do you want it to equal?”
And some of life’s big questions, courtesy of Paul Dixon:
- Do people in Australia call the rest of the world “up over”?
- Does that screwdriver belong to Philip?
- Does killing time damage eternity?
- Why doesn’t Tarzan have a beard?
- Why is it that night falls but day breaks?
- Why is the third hand on the watch called a second hand?
- Why is lemon juice made with artificial flavour, and dishwashing liquid made with real lemons?
- Can you buy an entire chess set in a pawn shop?
- Daylight savings time – why are they saving it and where do they keep it?
- Did Noah keep his bees in archives?
- Do pilots take crash-courses?
- Do stars clean themselves with meteor showers?
- Do you think that when they asked George Washington for ID that he just whipped out a quarter?
- Have you ever seen a toad on a toadstool?
- How can there be self-help “groups”?
- How do you get off a non-stop flight?
- How do you write zero in Roman numerals?
- If you jog backwards, will you gain weight?
- Why do the signs that say “Slow Children” have a picture of a running child?
Finally, another poem: The Inchcape Rock
In 2011, to mark the 200th anniversary of the lighting of the Bell Rock Lighthouse on the Inchcape Reef eleven miles off the east coast of Scotland, we of Inchcape Shipping Services invited that doyen of maritime journalism, Michael Grey, along with the 4th Earl, Lord Peter Inchcape and other luminaries, out to the Inchcape Rock. On that stormy February morning, Michael recalled his early school days in Glasgow when he learned off by heart this splendid poem by Robert Southey composed in the late 1700s:
No stir in the air, no stir in the sea,
The Ship was still as she could be;
Her sails from heaven received no motion,
Her keel was steady in the ocean.
Without either sign or sound of their shock,
The waves flow’d over the Inchcape Rock;
So little they rose, so little they fell,
They did not move the Inchcape Bell.
The worthy Abbot of Aberbrothok
Had placed that bell on the Inchcape Rock;
On a buoy in the storm it floated and swung,
And over the waves its warning rung.
When the Rock was hid by the surge’s swell,
The Mariners heard the warning Bell;
And then they knew the perilous Rock,
And blest the Abbot of Aberbrothok
The Sun in the heaven was shining gay,
All things were joyful on that day;
The sea-birds scream’d as they wheel’d round,
And there was joyaunce in their sound.
The buoy of the Inchcape Bell was seen
A darker speck on the ocean green;
Sir Ralph the Rover walk’d his deck,
And fix’d his eye on the darker speck.
He felt the cheering power of spring,
It made him whistle, it made him sing;
His heart was mirthful to excess,
But the Rover’s mirth was wickedness.
His eye was on the Inchcape Float;
Quoth he, “My men, put out the boat,
And row me to the Inchcape Rock,
And I’ll plague the Abbot of Aberbrothok.”
The boat is lower’d, the boatmen row,
And to the Inchcape Rock they go;
Sir Ralph bent over from the boat,
And he cut the bell from the Inchcape Float.
Down sank the Bell with a gurgling sound,
The bubbles rose and burst around;
Quoth Sir Ralph, “The next who comes to the Rock,
Won’t bless the Abbot of Aberbrothok.”
Sir Ralph the Rover sail’d away,
He scour’d the seas for many a day;
And now grown rich with plunder’d store,
He steers his course for Scotland’s shore.
So thick a haze o’erspreads the sky,
They cannot see the sun on high;
The wind hath blown a gale all day,
At evening it hath died away.
On the deck the Rover takes his stand,
So dark it is they see no land.
Quoth Sir Ralph, “It will be lighter soon,
For there is the dawn of the rising Moon.”
“Canst hear,” said one, “the breakers roar?
For methinks we should be near the shore.”
“Now, where we are I cannot tell,
But I wish we could hear the Inchcape Bell.”
They hear no sound, the swell is strong,
Though the wind hath fallen they drift along;
Till the vessel strikes with a shivering shock,
“Oh Christ! It is the Inchcape Rock!”
Sir Ralph the Rover tore his hair,
He curst himself in his despair;
The waves rush in on every side,
The ship is sinking beneath the tide.
But even is his dying fear,
One dreadful sound could the Rover hear;
A sound as if with the Inchcape Bell,
The Devil below was ringing his knell.
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