Greece: Is this the divorce with the EEC ?

Greece faces snap elections next month after Prime Minister Antonis Samaras failed in his third and final attempt to persuade parliament to back his candidate for head of state.

Stocks and bonds dropped in Athens today after 168 lawmakers in the 300-seat chamber backed Samaras’s nominee for president, Stavros Dimas, short of the 180 votes required. Under the constitution, the legislature will now be dissolved and a date for elections set within the next 10 days. Samaras said he will ask for the election to be held on Jan. 25.

The prospect of early parliamentary elections has roiled financial markets in Greece as it evoked memories of the height of the financial crisis in 2012 when the country’s euro membership was in jeopardy. The anti-austerity Syriza party led by Alexis Tsipras is ahead of Samaras’s New Democracy movement in opinion polls.

“These elections will be a struggle between fear for euro exit and anger against austerity,” George Pagoulatos, professor of European politics and economy at the Athens University of Economics and Business, said by phone. “The government will be emphasizing the risks associated with Syriza’s anti-bailout stance and Syriza will try to convince voters that it can offer a viable alternative, without endangering the country’s euro membership.”
Yields Jump

The yield on the 10-year Greek bond jumped after the vote was announced in parliament, and was up 99 basis points to 9.46 percent as of 1.01 p.m. in Athens. The benchmark Athens Stock Exchange was down 8.5 percent after falling more than 11 percent earlier in the day, the biggest slump among 18 western-European markets.

Samaras, who failed to gather enough support for Dimas in two previous rounds of voting, on Dec. 17 and Dec. 23, called on lawmakers before today’s session to avert a dissolution of parliament, saying that snap elections posed a danger to the country.

Heading a coalition of 155 lawmakers, he’d offered to form a broader administration and hold early parliamentary elections at the end of 2015 if lawmakers backed his nominee. His coalition’s term doesn’t expire until June 2016.

Tspiras, speaking to reporters after the vote, said that the Greek people were determined to put an end to austerity, and that in a few days the bailout memorandum and its policies will be confined to the past. Today is a “historic day” for democracy, he said.

“Syriza’s program includes blackmailing the European Union by not paying the debt Greece owes to European countries,” Nicholas Economides, an economics professor at New York University’s Stern Business School, said in an e-mail before the vote. “It also includes significant increases in salaries, pensions, and the number of civil servants. None of these actions are feasible with Greece in the euro zone.”

Bloomberg 29.12.2014


INTERTANKO: Committee launches bunker surcharge clauses for ECA

Rising bunker prices due to rising oil prices and volatility in global politics can have a dramatic effect on trade as they fluctuate not just day to day, but also port to port. Bunker fuel costs today form the largest part of owners’ expenses, being anything from 40-60% of the overall operating costs of a ship.

The tightening of regulations in Emission Control Areas (ECAs) requiring the use of low sulphur content fuels not only carries with it the risk of fines, detentions and disputes, but further adds to owners’ operating costs. The first ECA in effect was the Baltic in 2006 followed by the North Sea in 2007.

A stricter emission allowance down from 1.5 % to 1.0 % was introduced in 2010. The US, Canada and the Caribbean followed suit in 2012 and 2014.

MARPOL Annex VI, requiring a maximum sulphur content in fuel oil within ECAs of just 0.10 % by weight (down from 1.0%) comes into force in January 2015. Certain states such as California have already introduced legislation to enforce this. More regulation will certainly follow.
From 2015, owners may face escalating fuel costs in the EU, North America and Caribbean and any other ECA designated areas as ultra-low sulphur fuel carries a premium (today) of about USD 200-300 over regular bunker fuel prices. There is also a potential for increased demand in low sulphur fuels from January 2015, together with questions whether levels of supply will meet demand forecasts. These issues may also affect the predictability of pricing when freight rates are being fixed.
In order to minimise the risk of bunker volatility for Members, and to take account of increasingly onerous regulations on emissions, INTERTANKO has developed a bunker surcharge clause.
The clause addresses any additional bunker costs when trading in an Emissions Control Area (ECA) – INTERTANKO MARPOL Annex VI Clause for Voyage Chartering in Emission Control Areas.
The clause has also been adapted for use in the parcel trades – INTERTANKO MARPOL Annex VI Clause for Voyage Chartering in Emission Control Areas (Parcel trades).
These clauses are designed to assist Members in recouping actual amounts paid for bunkers, thereby avoiding disputes with charterers over bunker prices and minimising risk associated with price volatility.
MARPOL Annex VI Clauses for Voyage Chartering in Emission Control Areas

(i) Worldscale formula
Where an owner fixes using Worldscale, there is no need for a bunker adjustment clause to cover the additional costs of low sulphur fuel used in an ECA.
These extra bunker costs are not yet included in the flat rate but are today compensated by fixed differentials set out in the Worldscale book (using 2014 rates) as follows:
The WS differentials, $x.xx per mile are covering the extra bunker costs used by the standard Worldscale tanker within the ECA for bunkers with max 1.0%/0.1% sulphur content when calculated on a roundtrip basis. The calculations are based on bunker prices given in preamble part A (Explanatory notes)/4 (Basis for calculations)/(d) (Bunker prices).
ECA diff equals Bunker diff * Bunker consumption per day standard ship/speed* 24
ECA diff. Baltic & N Sea 2014 ($665.39 – $632.44) * 55/ (14.5 * 24) = $ 5.21
ECA diff. N Am 2014 ($713.11 – $632.44) * 55/(14.5 * 24) = $12.21
ECA diff. California 2014 ($1058.00 – $632.44) * 55 /(14.5 * 24) = $67.26
Members should note that the Worldscale Association recently announced its fixed rate differentials for 2015. The figure set for bunkers with max 0.1% sulphur content – Baltic and North Sea ECA and European in-port bunker allowances will be $920.75/mt. Low sulphur fuels for the North American ECA & Caribbean ECA and in-port bunker allowances will be $1028.02. Baltic and North Sea ECA miles will attract a fixed differential of $48.35, while North American ECA miles will be compensated by a fixed differential of $65.31.
The bunker prices Worldscale will use for calculating other 2015 Worldscale flat rates will be $614.81/mt.

(ii) Lumpsum or USD/tonne basis
Not all INTERTANKO Members fix using Worldscale. Given the tighter ECA requirements from 2015, INTERTANKO has developed two clauses to accommodate the ECA differentials when fixing outside of Worldscale on lumpsum or USD/tonne basis. The first clause is for use in CPP/dirty trades; the second has been adapted for use in parcel trades. These clauses provide for each trade a pragmatic way to calculate the bunker surcharge element for trading in an ECA.
To achieve maximum certainty at fixing and reimbursement of additional ECA costs, the mechanism of the CPP/dirty trades clause is based on actual consumption. Time within the ECA can be taken from the Master’s statements (as it would be with a deviation or call at an interim port) and the additional bunker costs can then be invoiced and paid without deduction. Charterers should be in a position to make this calculation and pay the bunker surcharge together with freight. Timings within the ECA will be clear from the Master’s statements as they will coincide with a fuel switch when entering the ECA and will end in the ECA port at ‘hoses off’.
The reference prices for fuel used in the first clause are those available prior to loading on ‘first in first out’ basis, again a formula that is familiar to our Members when calculating bunkers consumed for deviation or interim port calls. This can easily be adapted if Members are more used to using ‘bunkers last stemmed’ or if a reference point from Platts is preferable. The parcel trade version shows how a reference to Platts might work. Either way, the fuel oil reference prices used can be tracked in supporting invoices so that any additional charge can be verified by charterers.
Owners and charterers must therefore agree the following values prior to fixing:
Cs = Daily consumption at Sea
Cp = Daily consumption at Port
This is in our view unavoidable given the major bunker cost differential in trading in an ECA area. These figures may vary owner to owner but figures for the same ship type should be comparable and therefore capable of agreement.
Note that there would be no additional compensation for owners who have opted to use scrubbers or other alternatives to low sulphur fuel to satisfy the ECA requirements.
INTERTANKO MARPOL Annex VI Clause for Voyage Chartering in Emission Control Areas
1. Owners warrant that the Vessel shall comply with the requirements of MARPOL Annex VI Prevention of Air Pollution from Ships, Regulation 14 “Sulphur Oxides (SOx) and Particular Matter”.
2. The Parties agree that should Charterers require the Vessel to operate in any of the Emission Control Areas (ECAs) (as designated under MARPOL Annex VI) then Charterers shall compensate Owners for any additional bunker costs arising from all periods of operation in any ECA in accordance with the formula below:
(X – Y) * [(Cs * Ds) + (Cp * Dp)] = ECA Bunker Surcharge
X = Price of low sulphur marine gas oil
Y = Price of IFO 380 centistokes
Cp = Daily consumption at Port
Cs = Daily consumption at Sea
Dp = Actual Days at Port within ECA, calculated from NOR to last hose disconnected according to Master’s statement
Ds = Actual Days at Sea within ECA according to Master’s statement
3. The fuel oil reference prices X and Y in clause 2 above shall be prices actually paid on a ‘first in, first out’ basis supported by Owners’ paid invoices.
4. The ECA Bunker Surcharge shall be invoiced and paid without deduction no later than payment of freight.
Additional wording for Parcel Trades
Additional wording is required for use in the parcel trades. In consultation with Members engaged in the parcel trades, INTERTANKO established that the use of actual figures may over complicate the calculation of the ECA Bunker Surcharge. This could require for example a calculation to be made of cargo handled at a particular berth within an ECA with the share of the total cargo on board varying from port to port and even from berth to berth.
In order to achieve certainty at the outset and an early reimbursement of the ECA Bunker Surcharge in the parcel trades, the parcel trade version therefore uses estimated figures. This means there is no need to wait to conduct a complicated calculation for each parcel based on the Master’s time and consumption statements as the ECA Bunker Surcharge will be pre-agreed on estimates.
This may mean that the reimbursement of fuel costs to Owners will not be 100% accurate in each case as it is based on a theoretical voyage based on estimates. However the Committee felt that the degree of variance would be outweighed by the ability to achieve prompt payment of the surcharge along with freight rather than await a complex calculation and risk late payment. From Charterers’ perspective this approach will provide a certain lumpsum cost rather than risk exposure to a varying amount. Note that this approach based on pre-agreed estimates could also be used in the CPP/Dirty trades if preferred.
Again owners and charterers must agree the values (Cp, Cs, Dp and Ds) prior to fixing. (NB Cs and Cp may be a single pair of numbers or a series of pairs if different ship types with different consumptions can be nominated under the CoA). Several port-brackets (Cp * Dpn) may be used and added into the algorithm, one each for every port or berth where P1 is first berth, P2 is second berth etc., if the prorated values are different.
INTERTANKO MARPOL Annex VI Clause for Voyage Chartering in Emission Control Areas (Parcel trades)
1. Owners warrant that the vessel will comply with the requirements of MARPOL Annex VI Prevention of Air Pollution from Ships, Regulation 14 “Sulphur Oxides (SOx) and Particular Matter”.
2. The parties agree that should Charterers require the vessel to operate in any of the Emission Control Areas (ECAs) (as designated under MARPOL Annex VI) then Charterers shall compensate Owners for any additional bunker costs arising from all periods of operation in that ECA in accordance with the formula below:
(X – Y) * [(Cs * Ds) + (Cp * Dp1) + (Cp *Dp2)] =ECA Bunker Surcharge
X = Price of low sulphur marine gas oil
Y = Price of IFO 380 centistokes
Cp = Daily consumption at Port
Cs = Daily consumption at Sea
Dp = Estimated Days at Port within ECA, calculated from NOR to last hose disconnected * Estimated share of the cargo to be handled at that berth.
Ds = Estimated Days at Sea within ECA * Estimated share of the cargo onboard
3. The fuel oil reference prices X and Y in clause 2 above shall be a composite of delivered prices at Houston, Rotterdam and Singapore of IFO 380 cSt and Marine gasoil quoted by Platts Bunkerwire on the first B/L date, or the first subsequent listed day if prices are not listed on that day.
4. The ECA Bunker Surcharge shall be invoiced and paid without deduction no later than payment of freight.
In summary
Either way, via the Worldscale formula or the INTERTANKO MARPOL Annex VI clauses for Voyage Chartering in Emission Control Areas, an owner who trades in and out of an ECA area can be properly compensated for the additional costs from the use of low sulphur fuels mandated by MARPOL Annex VI/ the EU Sulphur Directive. This is imperative now as e.g. a vessel at berth in an EU port for over two hours is already required by the EU Sulphur Directive to use 0.10% sulphur content fuel. It will become more important in January 2015 and beyond as sulphur emission regulations continue to tighten. Owners are therefore encouraged to begin negotiations with charterers to ensure a proper distribution of risk and cost that the new requirements will bring.

Intertanko/Hellenic Shipping News

OW Bunker: To be sued by more Private and Institutional Investors

More private and institutional investors are preparing to sue those responsible for the OW Bunker-bankruptcy. So far it looks like at least five separate lawsuits against OW Bunker-management. The Belgian consulting firm deminor is to initiate an action on behalf of a number of institutional investors.

“About 15 of our institutional clients who have all lost money on OW Bunker, has asked us to investigate whether we believe there are grounds to open a case. It’s a mix of continental European, British, American and Danish customers. We are in the process of examining, and I bet that in the course of the next three months we will have reached a conclusion,” said Erik Bomans, a partner in Deminor.

In Denmark, the Danish Shareholders Association collected 6,400 private shareholders.
“We will try to find a greater or lesser team, who we from the Danish Shareholders Association, can help in time. There are going to be some competent people who will drive the process forward by working with us and some lawyers,” says Jens Møller Nielsen, director of the Danish Shareholders Association.

The actions will include trying to show that OW Bunker did something different than what they told the market that they did, when the company went public,.

“It will allow investors to get their lost money back from all those who are responsible for bringing the incorrect information to the market or to have made a due diligence, and that is of course management. But it is also the investment banks that brought the company on the stock market,” said Erik Bomans.

The Public Prosecutor for Serious Economic and International Crime, also called the Fraud Squad, has decided to act. But none have been charged or arrested, and there will be some time yet before the Attorney General has closely studied the numerous documents in the case.

Børsen/Maritime Dk 12.12.2014

Algeria: Logistics Business Opportunity

Medstone SA

As a result of the current developments in Algeria and the forthcoming US$262bn 5-year plan for 2015-2019, the demand for transport, storage, trans-shipping, communications, planning and control services is continuously growing throughout the Country. At the same time, pressure on Companies to optimize the quality and costs of their services is also growing with Logistics becoming a critical lever for their success.

We at Terport (®), a private Company, are offering a bounded logistics base in Algiers and provide support facilities to its clients on a 24/7 basis throughout the year with huge potential of growth (please check the attached  PowerPoint show or Video Link for a brief profile).

In this respect, We are always interested to hear from potential new Customers and/or Partners with an interest in Algeria with whom we can cooperate.

Should you be one of them, we would be delighted to hear from you and explore…

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DWT: 11000Ton Floating Dock
Built Year May 2003, Japan
GRT 6,497.00Ton
DWT 11,000.00Ton
L(LOA)XBXD 62.0 X 50.0 X 26.5M(4.5M)
Dock Inside Breadth 42.0m
Wing Tank Depth 22.0m
Draft 1.2m
Load Line 4.0m
Max Launching Draft 21.0m
Deck Area 2,604m3
Ballast time About 6Hours
M/E Daewoo, P158LE, 602ps X 1800rpm X 3sets
M/E Oil Consumption 115.7L/Hour
M/G Bokuk ele, BDS-400, 440v, 60hz, 400kw X 3sets
A/G 74kw, 220V, 60hz
Anchor Winch 30ton X 2sets (Hydro type)
20ton X 2sets (Electric type)
Crane Main Hoist 7~11m/10ton, 11~30m/3ton, 8m/min X 2sets
Aux Hoist 7~20m/5ton, 20~30m/3ton, 16m/min
Main Ballast Pump 1,000m3/hr X 45m X 132kw X 4sets

Stripping Pump 550m3/hr X 30m X 75kw X 2sets


Price: Can guide against firm interest & named Buyers


Ship’s Chartering: lest we forget, a $137.7 million cautionary tale for charterers

Case Summary: The “Ocean Victory” 25 February 2014 (*)

Breach of a safe port warranty, causation of loss of vessel, examination of the master’s navigation and whether causative, appropriate test of good navigation and seamanship, abnormal occurrence


On 25 February 2014 the Court of Appeal gave permission to Daiichi Chuo Kisen Kaisha to appeal the decision of Teare J. The permission has been granted solely in respect of the issues of ‘abnormal occurrence’ and ‘whether any unsafety of the port did not cause the loss’.


This case involved the alleged breach of a safe port warranty brought by subrogated underwriter Gard Marine & Energy Ltd as assignee to the rights of co-assureds Ocean Victory Maritime Inc (OVM) (registered owners) and Ocean Line Holdings Limited (OLH) (bareboat charterers), against China National Chartering Co Ltd (CNC) (formally known as Sinochart).
The vessel had been bareboat chartered by OVM to OLH on an amended Barecon 89 Standard Bareboat Charter which provided that the vessel would be employed “only between good and safe ports”. The Bareboat charter also provided, via clause 12, that OLH were to supply and pay for the vessel’s Marine, War and P & I insurance, with OVM as co-assureds.
OLH thereafter time chartered the vessel on an amended NYPE form to CNC. CNC then sub-chartered the vessel to Daiichi Chuo on largely back to back terms.
Kashima is a large modern port with over 9 miles of wharfs serving an industrial zone. The port caters for a variety of vessels, from small coastal vessels to larger vessels such as VLCCS (up to 280,000 DWT) and Capesize bulk carriers (up to 230,000 DWT).
The port of Kashima is prone to strong northerly winds and long waves generated at a great distance. However these conditions rarely coincided and there had been no incidents similar to that which befell the ‘Ocean Victory’, prior to October 2006, since the port’s construction in the 1960’s.
It is protected by a ‘Southern breakwater’ running for about 1.75 miles along its exposed north- eastern side, and the waterway inside the breakwater is known as the ‘Kashima Fairway’ which is the main access to the individual berths within the port area.
On 23rd October 2006 the vessel encountered heavy weather while discharging her cargo of iron ore at Raw Materials Quay berth B, Kashima, which resulted in the suspension of cargo operations.
The following morning, conditions deteriorated and there were discussions between the Master and the Charterers’ representative which resulted in a decision to leave the berth. The evidence before the court was conflicting. The Master stated that he felt he had been ordered off the berth, while the Charterers’ representative’s evidence (and indeed earlier witness statements from the Master) was that the Master had advised he would follow the decision of the Master of another vessel berthed at a neighbouring berth, the “Ellida Ace”.
A pilot was ordered and the vessel was due to depart at 1300 hours on the 24th October 2006, but due to the weather worsening the pilot was postponed. (The pilots were reluctant to take vessels out when the conditions made it dangerous for them to disembark). At the request of the master, two tugs were ordered to help stabilize the vessel after two of her mooring lines had parted.
At 1400 hours on 24th October 2006 the pilot boarded the vessel, in line with the earlier decision (seemingly by the Master after consultation with the Master of the neighbouring vessel) to leave the berth. After the pilot customarily disembarked at the end of the breakwater the master found it increasingly difficult to maintain the vessel’s speed/course due to strong winds, swell and the sea conditions, all coming from a northerly direction, increasingly so, as she left the protection of the Southern breakwater. The master’s difficulty was further exacerbated by the fact that no passage plan had been prepared prior to departure and that no parallel indexing was being used by him while navigating through the Fairway.
While attempting to control the vessel the master applied a series of hard port & starboard rudder settings resulting in severe loss of speed, steerage and ultimately control of the vessel, which eventually resulted in putting the northerly gale force wind and sea on to the port beam.
The vessel subsequently allided with the end of the breakwater, was pushed down the outside length of the breakwater, and grounded. Some two months later, whilst attempts at salvage were underway, and during a further storm, it broke up and became a total loss.
Gard claimed a total of USD 137.70 million consisting of, USD 88.50 million, being the value of the vessel as a total loss, USD 2.70 million for loss of hire, USD 12.00 million SCOPIC costs pursuant to an LOF 2000 and wreck removal costs in the sum of USD 34.50 million.

The Parties’ Arguments:
Counsel for the Claimants argued that the port was unsafe at the time of Charterers’ nomination, as there was a risk that long waves and strong winds from the North East would combine to create a situation where the vessel could not safely remain alongside the berth, and that the port system in place at the time was inadequate to warn vessels of the risk and to take shelter at sea before it became too dangerous to remain alongside. Thus, he argued, there was a risk the vessel would be trapped alongside and there damaged.
Counsel for the Charterers argued that the port was in fact safe as the vessel could have remained safely alongside the berth at the material time. Furthermore, the port was safe by the application of the dicta of Lord Denning in the Evia (No. 2). The proper test is one of ‘reasonable safety’. The enquiry should be whether the port had taken ‘reasonable precautions’ to overcome hazards associated with it. The port did not have to guard against every conceivable hazard. The port had only to be reasonably safe:
“if the set-up of the port is good but nevertheless the vessel suffers damage owing to some isolated, abnormal or extraneous occurrence – unconnected with the set-up – then the charterer is not in breach of his warranty”
The conditions on the day of the OV casualty were not abnormal, but they were rare. The port was not unsafe merely because its systems failed to guard against such a rare occurrence. The combination of long waves and gale force northerly winds was extreme and remote.
Counsel for the Charterers further argued that, on the facts, the master was negligent in leaving the berth and/or whilst navigating through the Kashima Fairway, and that was the real and effective cause of the casualty. Specifically, the excessive use of hard rudder angles while trying to exit the Kashima Fairway was the immediate cause, such as to interrupt the chain of causation. In the alternative, he further argued that the conditions encountered by the vessel were so rare as to amount to an ‘abnormal occurrence’.

Judgment (Mr Justice Teare):

Teare J found for the Claimants:
(i) Port Safety
Teare J disagreed with Charterers, and asserted that the classic and operative test was that provided by Sellers LJ in the Eastern City, which did not include a qualification of reasonableness, that test being:
“a port will not be safe unless, in the relevant period of time, the particular ship can reach it, use it and return from it without, in the absence of some abnormal occurrence, being exposed to danger which cannot be avoided by good navigation and seamanship”
Despite the Court of Appeal judgment of Lord Denning in the Evia (No. 2)(subsequently approved by the House of Lords), Teare J felt that to introduce an aspect of reasonableness to a safe port warranty would create uncertainty, and that any assessment of the safety of a port/it’s facilities should only be measured by whether the dangers encountered by the vessel “can be avoided by good navigation and seamanship”.

(ii) The decision to leave the berth
Teare J found that the master was not negligent in deciding to leave the port as he was following advice given by the Charterers’ representative, which Charterers ‘expected to be followed’. The court found that the master was entitled to rely on the advice of the Charterers’ local representative when assessing whether he should vacate the berth, even though he had serious reservations about the advice given and mistakenly believed that there had been an order by the port authorities to leave. Teare J felt that the decision to leave the port, although navigational in nature, arose naturally out of the advice given by Charterers’ local agent which ultimately was the real and effective cause of the casualty. He added that Charterers’ advice to leave at a time when it was unsafe to leave evidenced the unsafety of the port, though he had observed during the trial that the advice, when given, was ‘good’ advice.

(iii) Master’s navigation through the Fairway
After reviewing the testimony of the master and the expert evidence presented before him, Teare J accepted that the master:
1. failed to prepare a proper and adequate passage plan prior to departing the berth (and it was common ground that one ought to have been prepared); and
2. failed to use parallel indexing, stating that this was “a failure to exercise the skill and care to be expected of the prudent mariner… the risk in failing to use parallel indexing [being] that the mariner may not realise that his vessel is off the intended track until it is too late”.
Teare J considered that the difficulties which the master encountered in navigating along the Fairway were foreseeable consequences of the characteristics of the port and would have been faced by other masters of Capesize vessels. Referring to the decision in the Polyglory, he concluded that navigating the Fairway in these conditions would require a particularly bold mariner and a very high degree of skill.

Teare J concluded that the master:
“knew where the vessel was in relation to the leading lights marked on the chart, and although he may have thought the vessel was more to the north than in fact she was (…) it is unlikely this error caused him not to ease the starboard helm”
Teare J. further held that had he found the master’s navigation negligent he would have concluded that the unsafety of the port remained the real and effective cause of the casualty. In coming to this conclusion Teare J considered that the master’s conduct should not be assessed in isolation and was therefore prepared to forgive certain lapses in good navigational practices; specifically, the alleged overuse of specific hard rudder angles because he felt that they arose out of events caused by the dangers associated with the port and could not be separated from them. As a result the court held that the real and effective cause of the casualty remained the un-safety of the port.

(iv) Abnormal occurrence
Teare J rejected Charterers’ assertion that the conditions encountered by the vessel were an abnormal occurrence. At paragraph 126 of the judgment Teare J quoted Wilford on Time Charterers, saying that an abnormal occurrence is:
“one ‘which is unrelated to the prevailing characteristics of the port’ or to put the matter another way ‘a port will be unsafe only if the danger flows from its own qualities or attributes’”
As Kashima Fairway and the Raw Materials Quay were acknowledged to have been prone to northerly gale force winds and subject to long waves, (although these rarely occurred simultaneously), Teare J held that, individually, these attributes could not be considered unforeseeable, and thus their simultaneous occurrence, even though rare (there had been no record of their simultaneous occurrence in the previous 60 years), was insufficient to create an abnormal event and could be considered to flow from the natural characteristics of the port.

Japanese proceedings
After the judgment had been written, but before it was handed down the Tokyo District Court (in the claim by the Japanese Government against the Owners of the Ocean Victory for damages to the breakwater) found against Owners in that the master of the ‘Ocean Victory’ was negligent in navigating the vessel’s exit through the Kashima Fairway and that this was the effective cause of the casualty. When asked to consider the decision of the Japanese court when passing judgment Teare J stated that he was:
“not persuaded that the differences of detail or emphasis are such that [he] should revise the views [he] reached as to the navigation of the vessel based as they are on the extensive factual and expert evidence adduced by the parties and investigated at considerable length with [the experts] none of whom gave evidence in Japan”

While Teare J accepted the argument that a port is not necessarily unsafe because its systems fail to guard against every conceivable hazard, and he accepted that the simultaneous occurrence of northerly gale force winds and long waves was indeed rare, he held that the port should have had systems in place to deal with this rare occurrence. In failing to have such systems in place the port was unsafe.
This takes the reader back to the dicta of Lord Denning in the Evia (No. 2). When deciding whether the port should have had adequate systems in place to deal with such rare occurrences does the question of reasonableness come into play? Is the judgment of Lord Denning in the Evia (No. 2) antithetical to that of Sellers LJ in the Eastern City or is it merely an elaboration of Sellers LJ’s test? If Teare J had applied the concept of reasonableness to his decision would he have come to the same conclusion?
Charterers have now obtained permission to appeal Teare J.’s decision on the issues of abnormal occurrence and causation, but not the issue of the master’s navigation out of the fairway.
It is understood the ruling on the Master’s use of hard rudder angles will not be revisited, but the underlying decision to leave the berth at a time when the Master’s evidence was that he would have ‘surely stayed’ will be.
Was Lord Denning’s attempt to formulate a positive elaboration on Sellers’ LJ’s original test unhelpful? Are they rival formulations, inconsistent with each other?

The Judgement is important in several respects, not just because of the large sums involved.

First, it has far-reaching implications for vessels trading to major Japanese ports on the Japan Pacific seaboard, many of which are prone to long swell and Northerly gales. Indeed, one could go further and say that most ports on the Pacific Rim are susceptible at least to long wave swell.

Secondly, it has far-reaching implications for the relationship between Ports (and those administering them) and the vessels using them. Would the Charterers have been better off not having a representative in place at the port (whose role was to assist the visiting Masters using the berths), and saying nothing to the master and let him make his own decision whether to leave or not? That way, the effect of that decision could not have been visited on the Charterers. The process of assisting vessels has exposed Charterers to precisely the liability they were intending to avoid. It is true that much of the evidence was fact-specific to this case, and the Court clearly felt sympathy for the Master and laid the blame for the decision to depart at the door of the charterers, whilst acknowledging that the decision was nevertheless a ‘navigational’ one, which, under normal and accepted rules, falls solely within the remit of the Master. Is this likely to lead to a potentially confusing inconsistency in this area?

An alternative consequence of the decision is that, instead of doing less in terms of assistance, Ports may decide they will do more, and instead of issuing ‘recommendations’ to depart or stay, they may feel obliged to issue ‘orders’, or even appoint on-board Pilots to supervise loading or discharge operations.
The confusion in this case arose because the Master, for whatever reason said he thought he had been ‘ordered’ to leave even though his evidence was that he would have ‘surely stayed’ had the decision been his alone, and felt comfortable being held at the berth by two tugs.
Overall, the decision has created confusion in the mind of those who routinely trade with Japan (and indeed other ports worldwide) and those who assess the risks associated with this trade.
It leaves the allocation of responsibility relating to decisions previously described as navigational in nature (thus the responsibility of the Master) and Port orders/recommendations (which the Master can obey or follow in the context of his navigational responsibilities) blurred and unclear.
It is also unhelpful for the development of the law concerning the material safety of modern ports for the court to have been so dismissive of a separate House of Lords decision at odds with its own findings. The Evia (No. 2) (even the Court of Appeal decision which was approved by the House of Lords) remains good law. Was the learned judge right in reading it as being at odds with, and detracting from the clarity of the test formulated in the Eastern City? It is suggested that further clarification is needed sooner rather than later on the above issues.

(*) With our thanks to Jackson Parton

CONTAINER WEIGHT: New Important IMO Ruling

United Nations’ International Maritime Organization (IMO) has decided to make it mandatory to weigh loaded containers before they are transported by sea. This will enhance safety and prevent pollution of the marine environment.

In the future, loaded containers must not be taken on board a ship until their weight has been determined. This was decided by the IMO Maritime Safety Committee (MSC) at last week’s meeting. The correct weight – the so-called verified weight – can be determined in two ways. You can either weigh the loaded container at an approved weighing station or you can ensure that the individual items in the container are weighed and added to the container’s net weight.

Weight is of importance to safety
Denmark has been one of the initiators of the new stricter requirements on the weighing of containers and has persistently maintained that mandatory regulations should be introduced for reasons of safety.

Since the freight rate depends on the weight, it has not been easy to get the provisions in place. But now there is a general understanding that incorrect data may result in container stacks collapsing, containers falling over board and ship accidents as a consequence of overloaded ships. The fact that container ships are becoming larger and larger has contributed to an improved understanding of the problems.

The new international regulations take effect on 1 June 2016 but we expect ports, shipping lines, various authorities will start implementing and applying this ruling sooner & gradually

Source: IMO

United Nations: UNCTAD full review of Maritime Transport for 2014

This is the yearly full review of UNCTAD, the United Nations Conference on Trade and Development, of Maritime Markets and analysing relevant developments for the year 2014.

Worth reading (while resting and/or recovering after X’mas festivities may be ?!)