Report by Piraeus Bank: A Casual Observer’s Guide to the Greek Economy (May 2015)

The Piraeus Bank (Greece) has just published this report being introduced as:

A casual observer of the Greek political discourse should be excused for feeling completely confused by the cacophony created by a litany of the comments regarding the issue of Greek sovereign debt sustainability, re-negotiation, alleviation or even repudiation. While these comments reflect the importance of these issues for the future of the Greek economy, the way this dialogue is conducted obscures rather than clarifies the true nature of the problems that need to be addressed.

In what follows, we focus on some of the “hot topics” relevant to the Greek economy:

  • What has been the course of events since 2010
  • Where we stand now regarding the business cycle
  • What is the cyclical position of the Greek economy

What is the “state of affairs” regarding the Greek debt

Here is the full report (PowerPoint format):





Demurrage time bar: Crucial to comply with documentary requirements

Kassiopi Maritime Co v. Fal Shipping Co Ltd (M/T Adventure) [2015] EWHC 318 (Comm)

In this case, the vessel Owners failed to provide the Charterers with all documents in support of their demurrage claim within the 90-day time period provided under the charter-party. Their claim was dismissed and they were time-barred from recovering demurrage from the Charterers.

The background facts

The vessel was chartered under a voyage charter-party on an amended BPVoy4 form dated 15 June 2011. The Owners brought a substantial claim for demurrage as a result of delays at the load port of Sitra, Bahrain, and the discharge port, Port Sudan. A formal demurrage claim was submitted to the Charterers by email on 5 August 2011. The email attached a number of documents.

The Charterers disputed that demurrage was due to the Owners on the basis that the demurrage claim had not attached all of the necessary documents and that, because the 90-day period provided under the charter-party within which to submit those documents (and the claim) had elapsed, the Owners’ demurrage claim had become time-barred.

The charter-party provisions
The charter-party contained the following provisions:

19.7No claim by Owners in respect of additional time used in the cargo operations carried out under this Clause 19 shall be considered by Charterers unless it is accompanied by the following supporting documentation:

19.7.3 Copies of all other documentation maintained by those on board the Vessel or by the Terminal in connection with the cargo operations.

20.1Charterers shall be discharged and released from all liability in respect of any claim for demurrage, deviation or detention which Owners may have under this Charter unless a claim in writing has been presented to Charterers, together with all supporting documentation substantiating each and every constituent part of the claim, within ninety (90) days of the completion of discharge of the cargo carried hereunder.

The arbitration award

The Tribunal ruled that the Owners’ claim was time-barred. The Owners had failed to provide the Charterers with the documents required under clauses 19.7.3 and 20.1.

In particular, the Tribunal ruled that the port log, time sheets and a manuscript note from the Master showing that he had received free pratique by VHF at Port Sudan should have been provided, being documents that would have been kept on board (per clause 19.7.3). The Tribunal also ruled that the Owners should have disclosed upfront all the documents they would be required to disclose in an arbitration in support of their demurrage claim.

The Commercial Court decision

The Owners’ appeal was dismissed by the Commercial Court. The Judge was slightly more sympathetic to the Owners than the Tribunal had been. He agreed, however, with the Tribunal that the claim was time barred.

In particular:

1. The Judge disagreed with the Tribunal that the Owners had to disclose upfront all documents that they would be required to disclose in an arbitration or court case. This would impose a far-reaching and potentially unworkable obligation on the Owners. It would require them to undertake a detailed search for documents, in the context of disclosure, which was beyond what was being contemplated by the clause. The scope of disclosable documentation in arbitration or court proceedings is determined by the parties’ pleadings that identify the issues in dispute. Undertaking that type of disclosure before a claim had been formulated and formally commenced would be a heavy burden to impose upon the Owners.

2. Clause 19.7.3 of the charter-party was limited to contemporaneous records kept by the vessel in connection with cargo operations. In this context, the Judge agreed with the Owners’ submission: the documentation contemplated under the clause involved regularly updated documents, as compared to “one-off” documentation that comes into being solely for the purpose of a demurrage claim, such as a statement of facts. However, the type of documents that had to be submitted at the time of submitting the demurrage claim to the Charterers was a question for the Tribunal.

3. Under clause 20.1, the Owners were to provide “all supporting documentation”, not merely “supporting” or “essential” documentation. What was required was documents which substantiated each and every part of the claim and which provided Charterers with the material required to satisfy themselves that the claim was well-founded. Accordingly, the port logs and timesheets were required to be presented to the Charterers. The email with the Master’s manuscript note regarding the time when free pratique had been granted at Port Sudan was probably a supporting document too, because this information was important to the commencement and proper calculation of the laytime and there was no record of it in the other documentation provided by the Owners. The Owners’ failure to provide these documents to the Charterers within the 90-day time period provided under clause 20.1 meant that the Owners’ demurrage claim was time-barred.

This case reminds us again of the importance of understanding and fully complying with charter-party terms when presenting a demurrage claim to charterers – or any claim subject to time limits or explicit requirements regarding what needs to be produced and when. The effect of non-compliance may be fatal to owners – who may find themselves unable to recover substantial amounts to which, in all other respects, they have a straightforward entitlement.

Ince & Co 26.5.2015

Libya: Tripoli-based Govt bans opening of L/C’s for 32 items

The Tripoli-based authorities have passed a decree banning the import of 32 items through letters of credit (LCs) for 6 months as of 13 May.
The Tripoli authorities through their Ministry of Economy circulated the decree to the Tripoli-based Central Bank of Libya, the Customs Authority, the Chamber of Commerce and the Business Council.
Meanwhile, the Tripoli authorities assured that the ban would not affect the basic necessities and foodstuffs as well as raw materials for local industry and consumption.
The move by the Tripoli authorities to freeze the opening of official documentary letters of credit for imports is seen as a move to stem the hemorrhaging of Libya’s fast depleting foreign currency reserves.
It will be recalled that Libya has been forced into making up its deficits over the last few years by dipping into its foreign currency reserves ironically amassed by the outgoing Qaddafi regime over a few decades.
Moreover, the foreign currency shortage has led to the black market exchange rate for the US dollar to peak at two dinars to the dollar, compared to the official rate of LD 1.30 to the dollar.
Equally, the move to freeze the opening of LCs is also seen as an attempt to control the outward flow of Libya’s hard currencies through either exaggerated or fake invoices and LCs.
It is not clear if this move is a short term move to save hard currency or in view of Libya’s low oil production and the collapse in international crude oil prices or if it will be extended beyond November.
Equally, some businessmen have expressed surprise at the timing of the move coming a month before the fasting month of Ramadan, the peak month for consumption in Libya. There are also concerns on the inflationary effect of the import ban on prices in the Libyan market.
It is also seen as encouraging black marketering and as an abrogation of responsibility by the Tripoli authorities for imports and the economy in its region.
Furthermore, this LC import ban is imposed by the authorities in western Libya but not by the internationally recognized government in eastern Libya.

Banned items are:

1-Cars and vehicles (old or new)
2-Motorbikes and bicycles
3-Powered boats
5-Entertainment products
6-Toys, and sports goods
7-Papper tissues, napkins
8-Car accessories
09-Leather products
10-Hunting guns and fireworks
11-Cement and wooden poles
12-Sanitary (bathroom fixtures) products, marble, tiles and ceramics
13-Wood – raw material
14-Carpets, curtains and accessories
15-Leather and non-leader bags (except school bags)
16 -Reinforcement iron bars
17-Mobile phones and accessories
18-Office and domestic furniture
19-Workshop tools
20-Artificial drinks/juices
21-Chocolates, biscuits (except raw material chocolate for manufacturing)
22-Artificial fruit drink powders
23-Canned, preserved, dried vegetables and pickles
24-Crisps and corn flakes
25-Fizzy and mineral water
26 -Chlorine and liquid soaps
28-Nuts (edible)
29-olive oil
30-Harissa (spicy chilli sauce/past)
31-Energy drinks
32-Caviar and sea foods

L/Herald 18.05.2015