LUB ETTER - Swedish ClubProtection & Indemnity, Loss of Hire, Freight Demurrage & Defence insurance...

THE SWEDISH CLUB LETTERTHE SWEDISH CLUB LETTER

page 14-15

page 8-13

LESS CLAIMS with comprehensive Pre-Engagement Medical Examinations

THISIS

AIS

NO. 1 – 2001APRIL - JUNE

It all started withORVAR ODD

page 21

Meet our In-HouseADJUSTING TEAM

page 18-19

The Swedish Club Offices

HEAD OFFICE SWEDEN

Gullbergs Strandgata 6, P.O. Box 171SE-401 22 Göteborg, SwedenTel +46 31 638 400, Fax +46 31 156 711E-mail [email protected] tel +46 31 151 328

GREECE

5-7, Agiou NicolaouGR-185 37 Piraeus, GreeceTel +30 1 452 2397, Fax +30 1 452 5957E-mail [email protected] tel +30 944 530 856

HONG KONG

Suite 6306, Central Plaza18 Harbour Road, Wanchai, Hong KongTel +852 2598 6238, Fax +852 2845 9203E-mail [email protected] tel +852 2598 6464

JAPAN

Suzuyo Hamamatsucho Building 5F.2-1-16 Kaigan, Minato-Ku, Tokyo 105-0022, JapanTel +81 3 5442 5466 (24 hour tel), Fax +81 3 5442 5922E-mail [email protected]

UNITED KINGDOM

100 Fenchurch StreetLondon EC3M 5JD, United KingdomTel +44 20 7397 4950, Fax +44 20 7397 4951E-mail [email protected] tel +44 20 7397 4999

INTERNET www.swedishclub.com

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THE SWEDISH CLUB LETTER 1–2001

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Leading Article 3 Stability and Reliability

Bridge ResourceManagement 4 Automation Awareness – latest SAS-BRM news

News from Piraeus 4 Looking ahead with confidence

Technical 5 Mandatory carriage of the Black Box

6 Does IT work? Members expect new software to improve claims handling and safety

News from Hong Kong 6 Continued growth in Asia in all segments

Technical 7 Over-Pressurisation – It pays to be proactive

News from Tokyo 7 All-in-one policy in Japan

Stowaways 7 Stowaways in Abidjan

Technical 8-13 This is AIS

Personal Injury 14 Less Claims with comprehensive Pre-EngagementMedical Examinations

15 Pre-existing illness

News from London 19 New office in 100 Fenchurch

FD&D 16 The Hill Harmony Case17 Shipbuilding contracts – Points to note18 The Happy Day case

Hull & Machinery 18-19 The Merits of In-House Adjusting19 AV 2000: A popular choice amongst members

News 20 New ballast water requirements in Australia / More turbulence on thecommercial market / Under-insured tankers and gaps in cover / Syria offerscustoms settlements at reduced rate / Prevent drug smuggling! / Oil Pollution– CLC/Fund Conventions / Be accurate when declaring stores and bunkers inArgentina!

Club Information 21 The Archive is a Window on the Past

22 Seminars

23 Staff News / Club Diary / Public Holidays

Internet 23 What’s New?

No. 1 – 2001April - June

The Swedish Club Letter is published three times a year and distributed free of charge to vessels insured with us and to our members.The Swedish Club Letter is an editorially independent newsletter and opinions expressed by external contributors are not necessarilythose of The Swedish Club. Furthermore, the Club does not accept responsibility for errors or omissions or their consequences.

Readers’ comments and views are welcome by phone, fax or mail.

Editorial Advisory Board: Martin Hernqvist, Peter Johansson, Örjan Karlsson,Anders Leissner, Claes Lindh, Petra Setterberg, Helena Wallerius Dahlsten.

Production co-ordinator: Susanne Blomstrand.

PR-consultant: TRS Public Relations Ltd.

Layout: Eliasson Information, Göteborg.

Printed in Sweden by PR Offset, Mölndal.

The Swedish Club is a mutual marine insurance company – owned and controlled by its members. The Club writes Hull & Machinery, War risks,Protection & Indemnity, Loss of Hire, Freight Demurrage & Defence insurance and any additional insurance required by shipowners.

©The Swedish Club. Articles or extracts may be quoted provided that The Swedish Club is credited as the source.

The Swedish Club,

P.O. Box 171,

SE-401 22 Göteborg, Sweden.

Tel +46 31 638 400,

Fax +46 31 156 711.

E-mail: [email protected]

www.swedishclub.com

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HOLIDAYS

when The Swedish Club offices are closedIn case of emergency please call the following numbers.

HEAD OFFICE April 13th Good FridaySWEDEN April 15th Easter DayEmergency tel April 16th Easter Monday+46 31 151 328 May 1st Labour Day

May 24th Ascension DayJune 3rd Whit SundayJune 4th Whit MondayJune 22nd Midsummer EveJune 23rd Midsummer Day

GREECE April 13th Orthodox EasterEmergency tel April 14th Orthodox Easter+30 944 530 856 April 15th Orthodox Easter

April 16th Orthodox EasterMay 1st Labour Day

HONG KONG April 5th Ching Ming FestivalEmergency tel April 13th Good Friday+852 2598 6464 April 14th The day after Good Friday

April 16th Easter HolidayApril 30th The Buddha’s BirthdayMay 1st Labour DayJune 25th Tuen Ng Festival

JAPAN April 29th Green Day24 hour tel April 30th Green Day+81 3 5442 5466 May 3rd Constitution Day

May 4th National HolidayMay 5th Children’s Day

UNITED KINGDOM April 13th Good FridayEmergency tel April 15th Easter Day+44 20 7397 4999 April 16th Easter Monday

Past and Future Events

June 7th 2001AGM in Göteborg

March 6th 2001Club Evening for membersand associates in Göteborg

March 8th 2001Club Evening for membersand associates in Stockholm

March 27th 2001Reception for membersand associates in Shanghai

March 28th 2001Board Meeting in Shanghai

March 29th 2001Reception for membersand associates in Hong Kong

May 8th 2001Club Evening for membersand associates in Hamburg

May 14th-18th 2001Marine Insurance Coursein Göteborg

June 6th 2001Board Meeting in Göteborg

Club Information

Stelios MagkanarisStelios MagkanarisStelios MagkanarisStelios MagkanarisStelios Magkanaris, joined ourteam inPiraeus asstaff survey-or on Janua-ry 8th 2001.He joinsfrom Costa-mare Ship-ping Compa-ny S.A and holds a B.Sc de-gree in Mechanical Enginee-ring from University of Sur-rey, a M.Sc degree in Marinetechnology from NewcastleUniversity and a Third Mari-ne Engineer’s Diploma.

Ken LittlejohnKen LittlejohnKen LittlejohnKen LittlejohnKen Littlejohn, joined ourLondon office on March 5th

2001 asClaimsExecutivedealingmainly withFD&Dmatters.Ken movesacross theThames after three years atthe Britannia Club, where heheld the position of ClaimsManager. A native of Scot-land, Ken holds a Bachelor ofLaws (LLB) degree from Aber-deen University, a Masters inInternational Trade Law(LLM) degree from NewcastleUniversity and has previouslyworked as an internationalfreight forwarder.

Jonas LyborgJonas LyborgJonas LyborgJonas LyborgJonas Lyborg, has resignedfrom the Club after ten yearsas a staff surveyor in the LossPrevention & Technical De-partment. Jonas is now pursu-ing his own business career inUSA and we wish him allsuccess.

Marcus SiljöMarcus SiljöMarcus SiljöMarcus SiljöMarcus Siljö, has resignedfrom the Club as an assistantunderwriter after three yearsof dedicated service in theUnderwriting & MarketingDepartment. We wish him allsuccess in his future career.

CLUB DIARY

STAFF NEWS

March saw the launch of Swedish Club OnLine (SCOL), a new online service formembers which provides direct access to claims data spanning a five-year period.

SCOL-registered members now have password-controlled access to claims recordsand summaries of current claims status. Information is also available to brokers, whocan obtain data on specific ships following authorisation by the member concerned.

This online service is the first step in the construction of an integrated businesssystem linking the Club with its members. The service already has extensive ‘drill-down’ capabilities, which allow the member to review claims trends by fleet, vesseltype and vessel on a year-by-year basis, then explore specific claims at a deeper level.

The next step will add a range of loss evaluation tools to SCOL. The ‘benchmar-king modules’, for example, are designed to allow the member to interrogate thedatabase for information on claims trends and outcomes for incidents ranging frompersonal injuries to main engine failures. Users can obtain a full picture of claimstrends and developments, both within the context of the individual fleet and acrossmuch larger ship populations. In this way, every member now has the opportunity togain direct access to the Club’s collective claims experience.

Register now as a SCOL user! For more information and to register please visitwww.swedishclub.com/scol or e-mail [email protected].

3

THE SWEDISH CLUB LETTER 1–2001Leading Article

Frans MalmrosMANAGING DIRECTOR

Stability and ReliabilityReinsurance majors have spearheaded the transformation inthe marine insurance market seen in recent months. The

market has taken on a different character as rates continue

to harden. The reinsurers sought (and, in most cases, secu-red) substantial increases. The commercial players have

seen the door slam on cheap reinsurance. They are now for-

ced to shoulder a larger share of risk and accept higherreinsurance rates. This is fuelling the increase in direct insu-

rance costs.

Changes in the market have been building for 18 monthsor more, but the upward pressure on rates accelerated in the

final weeks of 2000. The players facing the greatest chal-

lenge are those who lack flexibility. They are locked intoloss-making, multi-year deals and have limited ability to

respond to changing market conditions.

Reinsurers now behave with caution, seeking confirma-tion that underwriters are prepared to press for appropriate

increases in rates. One interesting phenomenon is the sud-

den resurgence of interest in claims records. This is a positi-ve development for us and our membership occupying the

high quality tier of the market.

The poor performers, in contrast, will suffer most in a ri-sing market. Premium increases have been sought and, in

many cases, obtained. The general trend looks moderate by

comparison. Reinsurance placement increases on the Lon-don market were in the 10-15 per cent range and whole

account placements rose by 25-30 per cent. Further in-

creases are in the pipeline as the commercial sector strugg-les to regain profitable ground.

The past 12 months have seen continued concentration in

the commercial market and there have been some dramaticdepartures of high-profile individuals. Consolidation conti-

nues at Lloyd’s and only a handful of reinsurers remain

(there were around 50 just five years ago!). Lloyd’s syndica-tes now total 108, as against 123 in 2000. Some surviving

syndicates lack direct relevance as they have left the marine

sector to prospect in more profitable areas. Reduced capaci-ty will add to the upward pressure on rates.

During 2000, Lloyd’s continued its development as a

commodity market (the commodity being capital). Lloyd’s

capacity reached the record level at £11.06 billion – up by

£1 billion on last year thanks to the influx of capital fromlimited liability corporates. Corporate members increased

in number during 2000, from 853 to 894, while individuals

and private capital provision continued to decline.In an increasingly volatile insurance environment, we offer

stability within a mutual framework insulated from turbu-

lence in the wider market. It is clear that the general trendof increasing rates will continue throughout 2001. There

are important differences in the response of the Club and

the commercial providers. We refused to follow the hullmarket into the abyss. Looking ahead, we shall continue to

find our own path. We shall act in the best interests of

members and deliver competitive advantage in a rising mar-ket. We have made a good start by ensuring that our mem-

bers continue to benefit from the Club’s close relationships

with leading reinsurers.

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THE SWEDISH CLUB LETTER 1–2001Club Information

The Swedish ClubAcademy■ ■ The Swedish Club Academy offers a fiveday Marine Insurance Course in May 2001.The course will take place in the Club’s headoffice in Göteborg and is open for members(free of charge) as well as non-members (USD500).

The course covers important aspects of ma-rine insurance, ranging from terms and con-ditions to the practical handling of claimsand loss prevention. The focus will be onHull & Machinery, Protection & Indemnityand Freight Demurrage & Defence insurance.The lecturers, all employees of the Club, willcontribute with their expertise and expe-rience.

This course provides an excellent oppor-tunity for people working for shipowners,ship managers, marine insurance brokers andClub correspondents to improve their know-ledge in marine insurance and learn moreabout The Swedish Club. ■

For more information about this course pleasevisit our website: www.swedishclub.com

Visit of the World Maritime University

Club Evenings in Stockholm and Göteborg

■ ■ During our recent Club Evenings in Göteborg and Stockholm, Commo-dore Thomas Fagö with the Swedish Coast Guard Response Department spokeabout the Coast Guards co-operation with agencies in other countries andtheir efforts to put a halt to pollution in the Baltic. ■

Guests at thegathering during theClub Evening inGöteborg.

Interested audience at the Club Evening in Stockholm.

■ ■ The Shipping Management students of the IMO World Maritime University inMalmö visited the Club in November last year for a half-day seminar. The group repre-sented not less than 14 different nations. We at the Club really enjoyed the opportunityto meet with all of them and to discuss questions concerning salvage, collision, cargoclaims, pollution and much more.

■

Commodore Thomas Fagö.

4

THE SWEDISH CLUB LETTER 1–2001Bridge Resource Management / News from Piraeus

■ ■ Automation Awareness is the subject of thelatest addition to the SAS-BRM Course. This14th course module addresses the various conse-quences of an increasingly automated environ-ment on board vessels. Automation Awarenessis both about identifying the advantages anddisadvantages of automated systems, and alsoabout stating different levels of automation andits characteristics. Automation Awareness prov-ides the students with important guidelines forlearning how to work in an automated environ-ment, avoiding possible dangers and acknow-ledging the advantages.

The increase of automation on board vessels,that is following an overall technical develop-ment of industries and societies all over theworld, naturally has both positive and less posi-tive consequences. The automated systemsthemselves usually constitute no danger. It is inthe interaction between the human elementand the automation that both advantages andpossible dangers lie. This often relates to hu-man attitudes towards automation and its roleon board vessels. The ideal is neither to be over-ly reliant on the automated system nor overlysuspicious. Education and training are goodways of finding a relevant balance between thetwo extremes. Through the Automation Aware-ness module, the SAS-BRM Course aims at gi-

Training Centres currently licensed byThe Swedish Club to conduct the SAS-BRM Course

◆ The Swedish Club Training Centre, Greece

◆ Wallem Maritime Training Centre, India

◆ Anglo-Eastern Maritime Training Centre, India

◆ PHILCAMSAT, The Philippines

In an automated environment the human element should never be completely out of the loop ofinformation.

ral differences between automation and humansas far as suitability is concerned. Humans are,for example, generally not suited to handlingthe same large amount of data with either thesame persistence or accuracy as automated sys-tems. Automated systems, on the other hand,unlike humans, are not suited to anticipatingevents or improvising appropriate actions andact only on the programmed input.

As the technical development of automatedsystems is an ongoing, continuous process, weshould avoid ever considering ourselves fullyeducated in this area. In order to continue tostrive towards making the automation as ideal acomplement to the human element as possible,we must take part in continuous learning aboutthe automated systems in our surroundings andalways be aware of how they affect the environ-ment in which we operate.

ving the students the ability to improve theiruse of automation and control automated sys-tems more effectively, by first helping them tostate both automation characteristics and dan-gers. This is useful knowledge, for example inregard to adjusting the workload. Automationaffects the workload on the ship differently ac-cording to the situation. In normal modes, wor-kload decreases as automation increases frommanual to a fully automated navigation and ste-

ering system, but in abnormal modeswith a high level of automation, worklo-ad can be very high as reconfigurationand changes of mode are carried out inan unplanned situation.

Today, automated systems can beconsidered to be ‘team members’ speci-ally adapted for certain tasks. It is there-fore important to be aware of some gene-

Automation Awareness – latest SAS-BRM news

Newsfrom

Piraeus

Looking ahead with confidence■ ■ A sign can be many things, and this sign is somethingspecial. Last week new road signs were put up showing theroute to the new airport Elefterios Venezelos. The latestnews is that the inauguration is going to be on March 28th

2001.Another good sign is that our new staff surveyor, Stelios Mag-kanaris, joined us in early January from a Greek shippingcompany where he worked as a superintendent engineer.Having two surveyors in our Piraeus office will give us muchmore flexibility when providing technical assistance to ourmembers in the region and other members’ vessels in theMediterranean Sea and the Middle East.A third good sign is that 2001 is the year when the Greekshipowners start taking delivery of their newbuildings. The

types of vessels are mainly bulk carriers ranging from handy-size to panamaxes, but there are also container vessels andtankers to be delivered.The fourth sign is that at the P&I renewal this year, ratherthan the fixed premium facilities, owners were seeking homesfor their P&I covers among the mutual group clubs, whichshows that the product and service we offer is superior.The Hull & Machinery insurance market is confirmed harde-ning, and we are looking ahead with confidence.

Clas RydénGENERAL MANAGER

The Swedish Club Greece

Anna-Karin LönnstadLOSS PREVENTION ASSISTANT

Loss Prevention & Technical DepartmentThe Swedish Club, Göteborg

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The Archive is a Window on the PastClub Information

■ ■ A display of historic documents from the Club’s Archive wasestablished at the Göteborg office late last year. The Archive is re-markable, in that it is almost complete and reaches back to the dateof foundation in 1872.

Eva Persson, the Club’s Archivist, is responsible for files and led-gers that, from end-to-end, would stretch for 1.4 km. While therewas plenty of choice for this first display from the Club’s early re-cords, Eva had no difficulty in selecting the case of the appropriatelynamed SAGA.

She explains: “In 1909, the SAGA was on a voyage from the northof Sweden to France when she collided with a Russian vessel. TheSAGA was built in 1883 and, at 2,850 tonnes, was a substantial vesselfor that time. The collision, however, resulted in severe damage. Thevessel sank but there was enough time for the Russian ship to rescuethe crew – although a stoker was trapped and went down with theship. An inquiry placed the blame squarely on the Russian vessel andthe claim for the loss of the SAGA amounted to SEK 108,000, a veryconsiderable sum in 1909!”

The Archive display includes a variety of documents relating tothe loss of the SAGA. The claimrecords the loss of the ‘besthats’ owned by the femalecook. Other papers, concer-ning the ship’s stores, revealthat the crew werewell fed and free ofthe curse of today’shighly processedfoods.

Close to theArchive display is afine ship model ofthe ORVAR ODD a wooden steamship built in the Göteborg areaand the first vessel to be entered with The Swedish Club in 1872.

Eva Persson became the Club’s Archivist during the 1980s. Therecords held in the Club’s office span a 10-year period. Records arethen transferred to the Archive, housed in a building in the Göte-borg area which serves as the Regional Archive for Western Sweden.

Eva says: “Although 130 years is not a long time in historicalterms, the Club’s early Archive can transport you to a completelydifferent world. For example, the Swedish language has undergonedramatic change over the past century and it is interesting to beconfronted with everyday language which was then much closer toits Germanic roots.

“There are also some interesting social insights. It is apparent that,even in the early decadesof the 20th Century, Stateresponsibility for the wel-fare of the disadvantagedwas rudimentary, to saythe least. In Sweden, manycompanies had a traditionof providing support forlocal communities. Theconcept of ‘corporateresponsibility’ is not new!The Swedish Club playedits part and the recordsnote the Christmas giftsand financial help offeredto those in need in theGöteborg area.” ■

Frans Malmros, Eva Persson and Bengt Pettersson admiring the ship model ofORVAR ODD.

■ THE SHIP MODEL of ORVAR ODD was made by Bengt PetterssonBengt PetterssonBengt PetterssonBengt PetterssonBengt Pettersson, whobuilt his first ship model when he was only 14 years old. Bengt once wantedto be sailor but since the Second World War was raging at the time, he startedto work as a station master for the railway instead. When he was about 50years old he decided it was time to start a new profession in the shippingworld. For 13 years he worked for Göteborg Maritime Museum, where hedevoted his time to repairing old ship models.

Eva Persson, The Swedish Club´s Archivist.

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The archive display.

Orvar Odd.

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THE SWEDISH CLUB LETTER 1–2001Technical

■ ■ Voyage Data Recorders (VDRs) – or ‘BlackBoxes’ – are about to assume a much higherprofile in the maritime industry, following theInternational Maritime Organization’s decisionto introduce mandatory requirements for theircarriage on ships.

Serious consideration of a marine black boxdates back to the early 1970s, but two cata-strophic ferry accidents – the Herald of Free En-terprise and the Estonia – were the major cata-lysts for action at the IMO.

The new IMO rules (see Table) require VDRson newbuild passenger vessels and other newships of 3,000 gt and over after mid-2002. Theprimary aim, as in the context of civil aviation,is to assist casualty investigators seeking to esta-blish the cause of an accident.

Administrations are free to exempt vessels(other than ro-ro passenger ships), constructedbefore July 1st 2002, from the new VDR carriagerequirements if it can be demonstrated that in-troducing a VDR with the ship’s existing equip-ment is ‘unreasonable and impracticable’.

There was considerable debate, naturally,about the position of existing ships in respect ofmandatory carriage. The IMO decided to carryout a feasibility study, to test the case. The studywill examine, inter alia, practicability, technicalissues surrounding retrofitting, the possibility ofsimplified standards for retrofits and cost impli-cations. The plan is to finalise this study by Ja-nuary 2004. If the study demonstrates a compel-ling need for mandatory carriage of VDRs forexisting ships, SOLAS Chapter V will be amen-ded and associated performance standards draf-ted.

Meanwhile, an IMO Resolution urges go-vernments to ‘encourage’ the fitting of VDRs toexisting vessels. In addition, an EU Council Di-rective from 1999 requires carriage of a VDRby all ro-ro ferries and high speed passengercraft operating to or from a port of a MemberState on a regular service (international and do-mestic), regardless of flag, by February 1st 2003.

The systems produced by the various manu-facturers are similar to the aircraft black box.The ship’s movements can be replayed, togetherwith information on the behaviour of personnelon the bridge and audio/radar inputs. Many ow-ners, especially in the cruise and ferry industries,have contributed to systemsdesign, in the sense that theyare aware of the potential ofthis equipment as a tool for arange of shipboard trainingtasks. For this reason, the de-mands on recorded data tendto exceed the IMO require-

ments, with areas included such as audio fromthe engine control room, extra radar andCCTV. The VDR, however, is an entirely passi-ve system; it does not ‘interrogate’ other sys-tems for data retrieval.

The primary role remains, however, the pro-vision of reliable evidence. In many cases, VDRevidence has been used to successfully defendthe actions of the crew and the position of theowning company. Certainly, post-event analysishas helped management teams better focus theirtraining programmes and, in some instances,improve safety management procedures.

The VDR mandatory requirements wereamongst a package of amendments to the Safetyof Life at Sea (SOLAS) Convention 1974, adop-ted at the 73rd session of the IMO’s MaritimeSafety Committee in November/December2000. The requirements are set out in Regula-tion 20 of a revised SOLAS Chapter V (Safety ofNavigation). The adoption of the carriage re-quirements puts in place the final element ofthree key regulatory components. The first,IMO’s A.861 (20) Performance Standard forVDRs, was adopted in late 1997. The secondelement, the IEC 61996 Technical and Methodsof Testing Protocol, was agreed in August 2000.All three components are now incorporatedinto SOLAS Chapter V.

VDRs currently available are designed tomeet IMO performance standard A.861 (20)and the IEC 61996 Technical Standard. This re-cords all required navigation and status data onthe bridge, including voice and radio communi-cation and radar images. This information ismerged and time-synchronised, allowing theowner’s organisation and/or authorities to carryout an investigation after an incident on boardthe ship or in its close vicinity. Generally, suchsystems retain 12 hours of information at all ti-mes.

Currently, ships are recommended (but notrequired) to carry VDRs. Mandatory carriage ofthe devices is a major step towards making ‘un-explained’ casualties a thing of the past. The1997 performance standards require VDRs tocontinuously maintain sequential records ofpre-selected data items concerning the statusand output of the ship’s equipment and thecommand and control of the ship. The VDR

memory must be housed in a protective capsulethat is brightly coloured and equipped with adevice to aid location.

Cases in which VDR evidence has influencedthe outcome include:

◆ Vessel berthing at yard for drydocking strikesthe jetty (US $150,000 steel damage): this ves-sel was under yard pilotage. When the yardbecame aware that the pilot’s actions hadbeen recorded, they paid for the repairs with-out further question.

◆ Vessel leaving a European port is involved ina minor collision with a coaster: the VDRplayback of the bridge team’s actions demon-strated that procedures required modifica-tion.

◆ Vessel entering a port collides with a yacht:VDR evidence absolved the master of all bla-me.

◆ Vessel entering port collides with an under-water object: the playback showed that thevessel was in the correct position, in the dred-ged channel, so absolving the master fromblame/criticism.

◆ Fire in the engine room: VDR playback resol-ved conflicting evidence over the sequence ofevents, confirming that the crew’s responsehad been professional and effective.

◆ Funnel fire: the VDR evidence helped to ex-pose a potential fault in the fire detection sys-tem – explaining a ‘slow’ response from thebridge team. In addition, a review of messagesfrom the vessel helped to explain why therewas an apparent over-reaction to the incidentfrom the Coastguard.

The introduction of VDRs may have someprofound legal and insurance implications. The-se issues are now under consideration by admi-ralty lawyers and the P&I clubs. There is, ofcourse, the question of whether owners shouldinsure against the cost of locating and recove-ring black boxes. More importantly, perhaps,there are unresolved questions surrounding le-gal professional privilege and the rights of par-ties concerning access to recorded data. ■

Mandatory carriage of the Black Box

Regulation 20: VDR statutory carriage requirements: SOLAS◆ Passenger ships constructed on or after July 1st 2002.

◆ Ro-ro passenger ships constructed before July 1st 2002, not later than the first survey on or after July 1st 2002.

◆ Passenger ships other than ro-ro passenger ships constructed before July 1st 2002, not later than January 1st 2004.

◆ Ships, other than passenger ships, of 3,000 gt and upwards, constructed on or after July 1st 2002.

Club contact: Örjan Karlsson, CLAIMS EXECUTIVE,Claims & Legal Support Department,

The Swedish Club, Göteborg.

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- NEWS - NEWS - NEWS - NEWS - NEWS - NEWS - NEWS - NEWS - NEWS - NEWS - NEWS - NEWS - NEWS - NEWS - NEWS

New ballast water

requirements in Australia

■ ■ From June 1st 2001 additional mandatory

ballast water requirements will be in force in

Australia. The purpose of these requirements is

to prevent exotic diseases being implanted in

Australian waters. The new rules will enable ships

to manage ballast water while en route to Austra-

lia either by way of exchanging ballast water at

sea (or on-board treatment systems) or by using

a ballast water ‘Decision Support System’ develo-

ped by AQIS (Australian Quarantine and Inspec-

tion Service). This system will assist the master

to determine if the water in the ballast tanks is of

a risky nature and provide treatment alternatives.

More information is available at AQIS’ website:

www.aqis.gov.au/docs/ballast/bwbroch.pdf ■

More turbulence on the

commercial market

■ ■ With reinsurance costs on the increase,

many players in the market are being forced to

retain more risk and/or accept more expensive

terms. This is having a dramatic impact on the

cost of cover in the commercial market. As losses

build and the market hardens, concentration is

set to continue. More mergers may be expected!

In addition, more players are likely to desert the

marine market, in some cases leaving their

clients exposed to re-rating, rather than renewal.

■

Under-insured tankers

and gaps in cover

■ ■ High freight rates in the tanker sector have

been accompanied by a sharp rise in hull

values. In many cases, market values now far

exceed insured values and that can lead to a

potentially serious gap in insurance cover.

The Club is concerned that a relatively large

number of tankers may be under-insured in the

new market environment. In a poor freight mar-

ket, the pressure is on to control costs and,

inevitably, this is reflected in the insured value.

Owners have every incentive to ensure that insu-

red value stays in line with falling market prices.

When there is an upturn, however, there is no

corresponding pressure to ensure that market

value and insured value stay in step.

The relationship between market value and

cover is always an issue of importance to owners

and underwriters, but we moved into an entirely

new situation in 2000, given the steep rise in

tanker freight rates. It is important that tanker

owners recognise that a potentially serious gap in

insurance cover may have developed. In a large

collision case, for example, the gap may be as

large as ten per cent – possibly a six-figure short-

fall.Typically, a P&I policy will supplement the

owner’s hull cover in the area of Excess Collision

Liabilities. In the event of a collision, for example,

P&I ECL cover should apply, but there may be a

gap between Hull and P&I covers if the ship is

under-insured. A P&I policy will state that the

vessel must be adequately insured under Hull &

Machinery, or additional covers, so as to reflect

current market value.

The risk of a shortfall, of course, is particularly

acute in a total loss situation, should there be a

marked difference between insured and market

values. Failure to check whether these values are

aligned could prove to be a costly oversight in a

major case. It makes sense to talk to brokers, or

hull underwriters, and obtain an up-to-date view

on existing levels of hull cover. ■

Syria offers customs

settlements at reduced rate

■ ■ It is understood that the Ministry of Finance

in Syria has decided to introduce a reduced rate

for amicable settlement of Customs contraven-

tions. The decision is said to reduce the rate from

25 per cent to ten per cent (of both the value of

the goods concerned and the Customs dues).

The decision is believed to apply to all pending

cases.This decision is of some significance, as ves-

sels calling at Syrian ports often encounter pro-

blems concerning an unusually strict interpreta-

tion of Customs regulations. The reduced rate

offers an opportunity to clear many outstanding

cases.Weight declarations for cargoes such as tim-

ber, as a matter of routine, are calculated on the

basis of average weights. In Syrian ports, howe-

ver, cargoes may be subjected to weight checks

and any deviation from declared weight may

result in a fine for violation of Customs regula-

tions. Fines may be levied even if the owner is

able to produce documentation stating that the

cargo receivers are satisfied.

Some cases have no logical association with

weight! One example involved a shipment of

secondhand diesel engines. One engine was

weighed at a Syrian port. The result differed from

the declared weight and Customs officials took

action.Liner services to Syria frequently run into

‘double trouble’ if cargo bookings are over-subs-

cribed. If any cargo on the manifest is not on

board, there is the risk of being fined for short

shipment. Explanations concerning rearranged

carriage plans are not accepted. When the

‘missing’ cargo does arrive, however, another fine

may result if it does not appear on the second

manifest. ■

Prevent drug smuggling!

■ ■ A ship insured with The Swedish Club was

recently boarded and searched by customs and

police in Rotterdam. 100 kilos of cocaine and 300

kilos of marijuana were found in a space between

the rudder and the rudder shaft. The ship had

loaded a cargo in Jamaica and the conclusion

drawn by the investigation was that divers had

placed the parcels there. Members of the crew

were taken ashore in Rotterdam for interrogation

but were later released, since it was obvious that

interests not related to the ship had placed the

drugs on board.

It is not uncommon that crew members are

persuaded by drug dealers to hide drugs on

board the ship. If customs authorities find drugs

on board, the ship can be exposed to heavy fines

and sanctions. Members are therefore recom-

mended to take steps to prevent drug smuggling

on board their ships. For ships trading in high-

risk areas such as Colombia and other South

American countries, it is recommended that Anti-

drug smuggling co-operation agreements are

signed.More information about these agreements and

other useful information on this subject can be

obtained through BIMCO at www.bimco.org in

the Members’ area. BIMCO can also be contac-

ted by e-mail [email protected] or telephone

+45 44 36 68 00. ■

Oil Pollution– CLC/Fund Conventions

■ ■ At its meeting in October 2000, the IMO

Legal Committee decided that the levels of com-

pensation in the CLC and Fund conventions

should be raised in accordance with the formula

stipulated in the conventions. The result is that

the levels will increase by approximately 50 per

cent and the maximum total amount payable

under the conventions will be USD 260 million.

The new levels will most likely enter into force in

November 2003.

A working group within the IOPC Fund is

currently reviewing the conventions in an effort to

improve the system. Several issues are being

discussed such as levels of compensation, ran-

king of claims, uniform application of the con-

ventions and environmental damage. ■

Be accurate when declaring

stores and bunkers in

Argentina!■ ■ In Argentina a number of incidents have

taken place due to inaccurate or non- declaration

of bunkers and lube oil to the customs authoriti-

es upon arrival.

When calling ports in Argentina the quantity of

bunkers on board has to be properly and accura-

tely declared in the vessel’s Store List, together

with all other items that are regularly declared.

Failure to declare bunkers or lub oil constitutes a

violation of the Argentinean Customs Code. The

sanctions will be either:

- a fine of one to five times the duty that would

have been applied if the oil were instead impor-

ted to Argentina, or,

- a fine of twice the market value of the bunker

or lub oil. In other cases of alleged smuggling the

merchandise would be seized and the fine equi-

valent to the market value, but due to the pro-

blems to seize bunkers, this formula is applied.

Our recommendation is that vessels calling

ports in Argentina ensure that the Store List

presented to the customs authorities properly

and accurately reflects all the stores, bunkers and

merchandise on the vessel and that a copy of the

list is kept on board. ■

NewsTHE SWEDISH CLUB LETTER 1/2001

6

THE SWEDISH CLUB LETTER 1–2001Technical / News from Hong Kong

■ ■ IT development is very fast. Most membersand other readers of this newsletter have proba-bly evaluated new IT hardware and softwareduring the past few years to find out whether in-vestments in new products would be worthwhileor not. There are often many questions andsome of them will not be answered until the in-vestments have already been made. Increased ef-ficiency at a reasonable cost is what we are look-ing for and even if not all develop-ment has met our expectations, ITand automated systems have to a largeextent changed our work environ-ments. It would probably feel difficultto be without many products today,both ashore and on board the ships.

The Club and its members have pri-marily two areas of common interest –insurance and, unfortunately some-times also, accidents. The author ofthis article attended a seminar in Fe-bruary 2001 aimed at shipping com-panies where a new software product,dealing with both insurance and accidents, waspresented. The Club cannot and should notevaluate the quality of the product, nor makeany comparisons with similar products, but webelieve that it could interest our members tohear a little about the development concerningproducts in this area.

The newly develo-ped software packageconsists of two modu-les – Star Insuranceand Star Event. The in-surance module, which handles most types ofmarine insurance polices, is designed to help in-surance managers keep track of insurance com-panies, policies, premium payments and claims.

The event module aims at facilitating the log-ging of events. Events are defined here as acci-dents, near-accidents and non-conformities.Other important objectives with the module areto provide information required for the hand-ling of claims and to help prevent the recur-

rence of events through a ‘lessons lear-ned’ feature.

Through the event module, if instal-led on board, details about events andtheir consequences can be reported bythe ships’ officers. The corrective ac-tion taken on board and proposals forimprovements can also be entered intothe system. The data is replicated toshore-based staff for necessary action.After investigation and analysis, safetypeople ashore can replicate recom-mendations and ‘lessons learned’ toeither all or a selection of the ships.

The module may also be used as a stand-aloneprogram installed on shore only for the recor-ding and follow-up of events.

The modules have been developed in co-ope-ration with Norwegian Gas Carriers and twomembers of the Club, Wallenius Lines and Ste-na Rederi. Ann-Marie Jansson, Hull Insurance

MORE INFORMATION about Star Insurance andStar Event is available from Star Information SystemAS in Norway.Website: www.sisys.com Tel: +47 22 476 910Fax: +47 22 476 919. E-mail: [email protected]

You may also contact Ann-Marie Jansson,Wallenius Lines Tel: +46 8 772 0500E-mail: [email protected]

We welcome readers who wish to share experienceswith us from similar products to contact MartinHernqvist at the Club’s head office in Göteborg.Contact details are found at the back of thisnewsletter.

Does IT work?

Manager at Wallenius Lines, says: “We expectseveral benefits from the system. It will facilitatethe handling of claims and all people involvedin accident events, such as the designated per-son, fleet manager and insurance manager, willobtain the same information at the same time.”

Ann-Marie Jansson continues: “It is vital thatour ships receive feedback from ashore. The ‘les-sons learned’ feature is an important factor forimproving safety and, furthermore, peoplewould be reluctant to report incidents if we donot ensure that we close the communicationloop and report back the results of our investiga-tions. The concept of using incidents to preventaccidents is a proactive measure that will be ofbenefit to the whole organisation.”

■

■ ■ The Club has finished the renewal season in Asia with-out any major losses and with a few additions. The H&Mmarket showed signs of hardening as losses, especially forLloyd’s, have been accumulating in the last few years. Someshipowners, not insured by the Club, saw significant in-creases. There did not seem to be much movement except forsome shipowners leaving insurers with financial difficulties orin run-off. The increase in GT in Asia was 370,000 mainlyfrom China.

This was the first year since 1994 that The Swedish Clubasked for a general increase on P&I. After almost six years ofreduced premiums, most members accepted the fact that thetide has turned and premiums need to increase slightly. Thestory has been the same for almost all P&I clubs. Premiumsare a bit too low and financial income has not been able to

make up for the difference. This year was not a good yearfor fixed premium P&I. With Jonathan Jones and a fewother facilities in run-off, many owners decided it was timeto move their fleets back into the International Group.With some clubs in the International Group having financi-al difficulties, there were also some movements of fleetsinto more secure clubs. As for The Swedish Club, GT in-creased by 275,000 with new tonnage coming from Japan,Korea, China, Hong Kong and Singapore. FD&D increasedby 200,000 GT. ■

Continued growth in Asia in all segments

Tord NilssonMANAGING DIRECTOR

The Swedish Club Hong Kong Ltd.

Newsfrom

Hong Kong

Newsfrom

Hong Kong

Members expect new software to improve claims handling and safety

Ann-MarieJansson,Hull InsuranceManager atWallenius Lines.

The computer screen showing the claim particular tab of the insurancemodule.

Martin HernqvistLOSS PREVENTION OFFICER


19


■ ■ New Swedish Conditions for Hull & Mach-inery Insurance were published and in use bythe second quarter of 2000. These Conditions,known as ‘AV 2000’, superseded Conditions da-ting back to 1987, however, with minor amend-ments implemented in 1994. The new Condi-tions take account of developments over thepast decade, including the advent of the ISMCode.

The choice of Conditions is entirely a matterfor the individual member. The Swedish Clubprovides cover under all main Hull Conditions,including AV (Swedish), ITC (English), AIHC(American), DTV (German) and NPL (Norwegi-an). AV 2000, in contrast to the English andAmerican Conditions, continues the Swedishtradition of providing ‘all risks’ cover.

Many features of the 1987 Conditions are re-tained in AV 2000, as are some significant diffe-

rences in approach. One example is the treat-ment of constructive total loss. Under SwedishConditions, a CTL is declared if estimated rep-air costs amount to 80 per cent of insured sum,as against 100 per cent in the case of e.g. Englishand American Conditions.

During the first year of use, AV 2000 proved apopular choice with Club members. This popu-larity extends beyond the Swedish shipowningcommunity. AV 2000, for example, has beenwell received by a number of the Club’s mem-bers in Greece and Asia.

AV 2000 was developed in a joint project in-volving the Swedish Shipowners’ Association,the Swedish Association of Marine Underwri-ters and The Swedish Club. It is an agreed docu-ment balancing the interest of the shipownersand underwriters. AV 2000 is furthermore a mo-dern regime. The three partners involved in itscreation were motivated by a strong desire toimprove the product whilst, at the same time,avoiding change for change’s sake.

The improvements include wider coverage.Bunkers and lube oils are now included, as are‘errors in design or construction’. Cover for

AV 2000: A popular choice amongst members‘construction fault’ now applies to the entirevessel, as opposed to being confined to mainengine and boilers provided the damage parthas been approved by class. In addition, cover isprovided to flaws in material, in respect of theentire vessel. These significant changes delivermore comprehensive coverage.

AV 2000 continues the Scandinavian tradi-tion of providing interest on proceeds a provisi-on not seen in other markets beyond Scandina-via. The AV 2000 Conditions, at the same time,represent a refined approach to key areas suchas seaworthiness and the ISM Code. Yet, essen-tial differences between the English and Scandi-navian approaches remain visible in AV 2000.The English tradition, for example, places muchemphasis on warranties. AV 2000, however,continues the Swedish tradition which focuseson safety regulations and the establishment ofcausal relationships between a breach and da-mage. ■

Lars A Malm, Mats Lindau, Fritiof Granberg and Ingrid Andersson.

Our in-house adjusting team, Ingrid Anders-son, Fritjof Granberg and Lars A Malm, inclu-des specialists in engine damage, collision casesand other forms of hull damage. In addition,our Quality Manager, Mats Lindau, assists theteam when required. His technical background,as a naval architect and former ClassificationSurveyor, adds to the team’s expertise. Teammembers also take steps to ensure that they havecurrent knowledge of all major Hull Conditionsin use by the Club, including the American,English, German, Norwegian, Swedish, Danishand Japanese Conditions.

The advantages of in-house adjusting are in-creasing, as the costs of commercial adjusting es-calate. Adjusting fees in the commercial sectorare generally considered expensive and somefirms now charge at levels typical of highly qua-lified London lawyers. This is not a one-off costfor the owner, as it is reflected in the claims re-cord. This may be a significant issue in the caseof a big fleet.

The benefits of in-house adjusting reallycome into play when member, claims handler,Club surveyor and in-house claims adjusterform a strong working partnership. The Clubsurveyor can assist in preparing a specificationfor repairs, assess bids and, following the pla-cing of the repair contract, keep a watchful eyeon the progress of the work.

Several payments on account may be requi-red during a major casualty. Once again, much

time can be saved by ensuring that the atten-ding Club surveyor’s approval of costs is obtai-ned before forwarding documentation to Göte-borg.

Our flexibility is most evident in cases wherethe major insurance types, i.e. Hull & Machine-ry, Protection & Indemnity or Loss of Hire areinvolved and placed with the Club, and most

prominently when we insure Hull & Machineryon a 100 per cent basis.

It should also be mentioned that we sit in clo-se proximity to the Loss Prevention & TechnicalDepartment and obtain, not only in urgent ca-ses, immediate technical advice whenever requi-red, which also helps to reduce costs.

■

Hull & Machinery

PH

OT O

: LENA

BR

YN

GELSSO

N ©

Lars RhodinDIRECTOR

Claims & Legal SupportDepartment

The Swedish Club, Göteborg

7


■ ■ We have been advised by TCI Abidjanthat, due to the political and economic situa-tion at present that prevails in Ivory Coast, the-re are more and more stowaways either of IvoryCoast nationality or foreigners, who have beenresidents in the country for some time, who aretrying to flee and are obtaining access to vesselsin the port of Abidjan.

We have had many stowaways recently whohave been discovered once the vessel had sailedfrom Abidjan and the masters have then set intothe port of San Pedro to have them disem-barked.

However, one of the main problems is, that

■ ■ Most tankers are equipped with P/V (pres-sure/vacuum) valves and, in many instances,pressure control systems. Yet all tankers remainat risk of damage resulting from over-pressurisa-tion, should equipment fail to function or a sig-nificant human error occur.

The Club has been involved in two seriousover-pressurisation cases during the past year.One involved an Ultra Large Crude Carrier.

An investigation found that over-pressurisa-tion had resulted from human error – a failureto open the tank to the mast riser. Pumping hadcontinued to the point at which the problembecame self-evident. The inert gas isolating val-ve to the damaged tank was in the closed posi-tion and no alternative ventilation was availablewhen pumping began in preparation for tankflushing. This vessel was not equipped with P/Vvalves to each cargo tank.

The error led to severe damage to a tank andlongitudinal bulkhead; repairs required 170 ton-nes of new steel. The cost was around US $ 1million.

During 2000, another large tanker sufferedsimilar structural damage as a result of over-pressurisation in almost identical circumstanc-es. A number of more minor cases were also re-ported during the year.

Beyond the significant cost of major repairs,over-pressurisation or under-pressurisation inci-dents have a potential to cause death or seriousinjury. It is important to be proactive in thisarea and take steps to ensure seafarers followcorrect procedures and avoid incidents whichcan have serious human, environmental and fi-nancial consequences.

Good maintenance is a central issue, yet thereis always the possibility of human error. A fleet-wide campaign, to raise awareness of the dan-gers, can be a worthwhile investment. One pri-ority is to ensure that seafarers have a compre-hensive understanding of pumping and pum-ping technology. ■

It pays to be proactive

Stowawaysalthough we know they em-barked in the port of Abid-jan, as they, in majority, arenot of Ivory Coast national-

ity and most of them do not have on them resi-dent cards, we are meeting with extreme diffi-culties with the Immigration Authorities andthe police to have them accepted on the IvoryCoast territory and owners are having to pay forrepatriation costs, including escorts etc., to theircountries of origin.

We therefore strongly recommend that anymember trading with the Ivory Coast should beparticularly vigilant and make absolutely cer-tain, prior to sailing from the port of Abidjanthat a thorough search is made and any stowa-way be disembarked, otherwise owners will beheld liable for the costs of repatriation. ■

Eltvedt & O’Sullivan asManagers for TCI Africa, ourcorrespondents in Abidjan, havebeen kind enough to provide uswith the following information.

in Abidjan

Technical/ Stowaways / News from Tokyo / Basic Facts

Newsfrom

Tokyo

■ ■ Most Japanesepeople feel 2001 willnot be a good year forJapan. The confusionof Japanese politics willnot be solved soon.The Japanese bankshave yet to settle theirbad debt. No immedia-te drastic measures canbe found. Japanese stock prices are stilllow and this reflects the situation.The unification of Japanese insurancecompanies is almost finished. Six or sevenInsurance Groups (both life and non-lifeinsurance companies) will act in Japan. In1999 about 15 non-life insurance compa-nies acted in Japan.2000 was a good year for Japanese ship-ping companies. But in view of the Japa-nese situation in 2001, they have to redu-ce their share that are dependent on theJapanese market but increase the share ofthe global market.From this year, the biggest hull underwri-ter, Tokio Marine & Fire Insurance Co.,Ltd. with the Standard Club have startedto underwrite P&I insurance for the bluewater tonnage. At the moment, they areselling this new product to the shippingcompanies who attach the hull insurancewith Tokio Marine & Fire InsuranceCompanies.Our All-in-One policy is recognised inJapan too. ■

All-in-onepolicy inJapan

Ryozou ImaiGENERAL MANAGER

The Swedish Club Japan

Number of vessels entered 1,274GT (million) 66.9Insured value (USD million) 20,143Gross premium (USD million) 57.0Average age 12.7

Hull & MachineryNumber of vessels entered 721GT (million) 21.3GT Covered 10.6

Protection & IndemnityNumber of vessels entered 802GT (million) 14.9

Freight, Demurrage & DefenceNumber of vessels entered 329GT (million) 7.96

BASIC FACTSPER MARCH 1ST 2001

Club contact: Loss Prevention & Technical Department, The Swedish Club, Göteborg.

18


The Merits of In-House Adjusting

■ ■ On an appeal from an Arbitration Award,the High Court in London has recently decidedthat in the event that no valid notice of readin-ess is tendered then laytime will not commenceat all until a valid notice has been tendered.The commencement of discharge operationswill not make any difference. A valid noticemust be tendered.

The decision in the case of Glencore GrainLtd – v – Flacker Shipping Ltd (The HAPPYDAY) has surprised the industry and the outco-me has been described as commercially absurd.It should be noted that owners are intending toappeal the decision, but until such time as theappeal is heard the High Court decision is goodlaw.

Briefly the facts of the case are that the vesselwas chartered on an amended Synacomex formand was to load and proceed direct to one totwo safe berth(s) anchorage(s) out of a numberof named ports in charterer’s option. The vesselloaded 23,000 mts of wheat at Odessa and pro-ceeded to Cochin where she arrived off the portat 1630 hours on Friday September 25th 1998.She was unable to immediately enter the portbecause she had missed the tide. Nevertheless,the Master purported to serve Notice of Readin-ess at 1630 hours on September 25th. The vesselwas only able to resume her voyage and enterthe port the following day, Saturday, berthing at13.15 hours. In the circumstances where thecharter was a berth charter and there was nocongestion at the berth, the notice of readinessgiven from outside the berth was invalid whengiven. No further notice was ever given. Dis-charge commenced on September 26th but wasnot completed until December 25th.

The Arbitrators decided that no valid noticeof readiness was ever given by owners but thatlaytime had commenced at 0800 hours on Sep-tember 29th which is the earliest time laytimecould have commenced if valid notice had beengiven. The question for the High Court was:can laytime commence under a voyage charter-party requiring service of a valid notice of rea-diness when no valid notice of readiness is everserved? If so, when does it commence?

Mr Justice Langley held that Clause 30 of thecharterparty was clear in its terms. Laytime startsat 8 am on the next working day after a validnotice of readiness has been given in accordan-

ce with its terms. No such notice was ever gi-ven. The notice that was given was not ‘accep-ted’ by the charterers in any sense on which reli-ance can be placed by the owners. The arbitra-tors found that it was only ‘received’. Therefore,the arguments of waiver and estoppel by char-terers were not available to owners. Ownerscould only rely on the fact that discharge opera-tions commenced on Saturday September 26th

and continued thereafter. Mr Justice Langleyheld that if the commencement and continua-tion of discharge operations are to have the ef-fect of validating an invalid notice of readinessor are to form some kind of notional notice ofreadiness then this would be inconsistent withthe Court of Appeal’s decision in the MEXICO1 in which Lord Justice Mustill rejected the con-cept of inchoate notice. There, Lord JusticeMustill held that the notice of readiness wouldnot take effect later when the statements in the

THE HAPPY DAY CASE

“The outcome has been described as commercially absurd.”notice of readiness became true, unless it couldbe proved that charterers had waived their rightto receive a valid notice of readiness. In addi-tion, Mr Justice Langley in the HAPPY DAYheld that such a finding would be to effectivelyre-write the parties’ contract: in effect to deletetheir clear requirement for a particular notice.

Owners’ claim for demurrage therefore failedand the charterers’ claim for despatch suc-ceeded.

This is a hard decision for owners. Despitethe lengthy discharge operations, no demurragewas found to be payable. Owners could haveavoided this by giving fresh valid notice of rea-diness upon arrival at the berth or at the com-mencement of discharge operations. It remainsto be seen what the Court of Appeal will decideif leave to appeal Mr Justice Langley’s decisionis granted.

■

■ ■ In-house claims adjusting has some impor-tant benefits, with faster results at lower cost. In-house adjusting is a valuable mutual service andthe Club’s adjusting team has the experience,detailed knowledge and records required toprovide an effective service to members.

In-house adjusting contributes to added valueas the commercial option will almost certainlyinvolve additional costs, due to the participa-tion of external adjusters and their technicalconsultants. These extras should be taken intoaccount when examining the financial aspects.

The Club’s in-house adjusting team in Göte-borg, where the adjustments are done, has theimportant advantage of working in close co-operation with the Club’s claims handlers. Allcases can be handled in-house, beyond the largegeneral averages that are tackled by specialistswith i.a. the extensive infrastructure required tocollect security.

Over the past decade, com-puter systems have transfor-med our in-house adjustingcapabilities. The aim is toprovide the member with afair, speedy and correct sett-lement. Efficiency targets areset within the Club’s QualityManagement System. Oneobjective is to settle 80 percent of hull cases within 30days of receipt of the claim.

Such targets place a premium on effectivecommunication with members, especially ontime-sensitive issues. One priority is to collateall the information required to take the deci-sions surrounding settlement. Members cancontribute to rapid claims settlement by presen-ting invoices which have already been approvedby a Club surveyor as fair and reasonable.

The 30-day target acts as a discipline and ourin-house adjusting team members do their bestto meet the challenge through good organisa-tion and prompt problem-solving. Experiencehas shown that having the adjustment drawn upby an external adjuster will almost certainly takelonger than 30 days. Placing 100 per cent withthe Club gives the owner the ultimate benefit ofin-house adjustment and avoiding the inevitabletime consuming collection from following un-derwriters.

Charlotte LaceyMANAGER FD&D LONDON

The Swedish Club U.K.

The Claims Adjuster: ‘Essential Qualities’◆ A Claims Adjuster must be courteous, diplomatic, shrewd,

persuasive... and even-tempered.

◆ A Claims Adjuster, while the embodiment of virtue, must havean excellent working knowledge of sin and evil in their manyforms.

◆ A Claims Adjuster must understand insurance, shipping,chemistry, physics, book-keeping, banking, law, horse-tradingand human nature.

◆ A Claims Adjuster must know the current price of everything –from a shoestring to a skyscraper.

Freight Demurrage & Defence / Hull & Machinery

8


■ ■ International Association of Marine Aidsto Navigation and Lighthouse Authorities(IALA) presented the first proposal of AIS toIMO. IALA is mainly dealing with shore basedaids to navigation including Vessel Traffic Servi-ces (VTS). The problem to identify ships on theradar displays in the VTS centres was, however,one of the reasons for the VTS committee ofIALA to initiate the development of a DigitalSelective Calling (DSC) transponder system(AIS). Their operational requirement for theAIS was mainly focusing on the needs of theVTS stations to identify radar targets approach-ing the coast. Requirements from seagoing ma-riners and others with interest in AIS were notlooked at.

Who is demanding AIS and whocould derive advantage from AIS?

The demand from politicians and maritime aut-horities to monitor movements of ships in their

territorial waters, in order to prevent accidentsand maritime disasters is rapidly increasing.Coastal states are responsible for traffic sepa-ration schemes, routing areas andfishing areas in their territorialwaters.

These states demand com-pulsory compliance by the usersof these waters and have a need tocontrol ‘areas to be avoided’.

The fact that users are monitored and identi-fied from shore will most probably result in agreater compliance with traffic separation sche-mes, routing measures and fishing regulations.

It has been argued that accidents in coastalareas could be avoided if ships were identified.This is maybe true in some cases, but a shorebased station, identifying a ship, is limited toadvise actions only by using the VHF radiocommunication facilities. Furthermore, misun-derstandings of the advice can appear due to,

for instance, language problems.The Exxon Valdez, the Aegean Sea and the

Braer were all identified, long before theyran aground. Consequently,radio contact is not alwaysthe solution.

The only person to stopthe engine or change the

course to avoid a grounding orcollision is the Officer Of the Watch

(OOW). The OOW is also deciding on actionsto follow in order to comply with the CollisionRegulations (COLREG). Ships equipped withAIS enables the OOWs to be the first ones tobenefit from the AIS system by getting an im-proved situation awareness capability.

Ambiguous calls, with a stressed voice, in thenight, such as: “Ship on my starboard side, shipon my starboard side, this is M/S XXX, I am tur-ning to port”, have made many OOWs wishingfor an AIS to identify M/S XXX and to get the

This article is published with

permisson from the Swedish

Maritime Administration (SMA).

Text: Captain/Pilot Benny Pettersson,

SMA Sweden, assisted by Senior

Development Engineer Rolf

Bäckström, Finland.

Automatic Identification System (AIS) is a new technical systemthat makes it possible to monitor ships from other ships, and fromshore based stations. AIS will become a requirement. See theInternational standardisation section. AIS equipped ships willcontinuously transmit a short message containing information ofposition, course over ground (COG), speed over ground (SOG), gyrocourse (heading), etc. Ships equipped with AIS meeting anywhere onearth will be able to identify and track each other without beingdependent of shore stations.Shore stations will also get the same information from ‘AIS-ships’ withinthe VHF area of the station when monitoring the coastal areas and theports. The AIS is using a broadcast and an interrogating self organisedtechnology, the so called AIS STDMA/ITDMA, that operates ship-to-shipand ship-to-shore including limited communication capabilities. AISdoes not require a radar.This article will stress the advantages of the AIS, show how to use it andwhy the techniques can operate and handle the information from allships even in the most dense shipping waters of the world.

Technical

THIS IS

17


P O I N T ST ON O T E

Freight Demurrage & Defence

■ ■ There are four principal industry pro formashipbuilding contracts: These are; the SAJ formpublished by the Shipbuilders Association of Ja-pan, the AWES form adopted by the Associa-tion of West European ship-builders, the Nor-wegian shipbuilding contract produced by theAssociation of Norwegian Marine Yards and theMARAD form produced by the Maritime Subsi-dy Board of the United States Department ofCommerce. Typically every shipyard has itsown standard form contract and on its face willstate upon which pro forma it has been based.This can be confusing in that it might suggest tothe shipowner that he is being asked to contractupon some industry standard form whereasmore accurately the shipyard may be expectedto have made extensive amendments to the proforma contract so as to produce a standard cont-ract weighted heavily in its own favour.

Any negotiations then based upon the ship-yard’s own contract necessarily commence froma position very favourable to the shipyard. It isalso correct to observe that shipyard personnelare usually far more experienced than theshipowner’s personnel at negotiating the termsof the shipbuilding contract. A practice, whichpartially attempts to redress this imbalance ofnegotiating position, has been for the shipow-ner to attempt to impose its own standard formupon the shipyard. The success of the shipow-ner in achieving this is invariably dependantupon market conditions at the time of the nego-tiations. Because the precise wording of theshipyard contracts tends to be highly individu-al, it is preferable to focus upon some of the fea-tures of these contracts rather than their precisewording.

One key factor is the passing of title underthe contract. Under contracts based upon theSAJ pro forma it may be anticipated that titlewill not pass under the contract until construc-tion has been completed and the vessel has beenformally delivered. This has two implicationsfor the purchaser. Firstly, it means that in theevent of the shipyard experiencing financial dif-ficulties during construction the purchaserwould be unable to take possession of the in-complete vessel or materials appropriated to itas the purchaser has no title to them. In a liqui-dation they may be sold for the benefit of all theshipyard creditors and the purchaser is in a weaknegotiating position as regards completion ofthe vessels. Secondly, because the purchaser hasno title he may find it more difficult and expen-sive to finance the construction, since he cannot

offer the incomplete vessel as security to a len-der. This situation is to be contrasted with thatmore typically found under a contract basedupon the AWES form where, typically, title willpass during the course of construction. Thepurchaser is thereby placed in a stronger posi-tion if the shipyard were to become insolventand has the added advantage that the incomple-te vessel may be offered as security to a lender.

Force Majeure provisions in shipyard cont-racts are also worthy of close attention. In itspurest form force majeure is usually understoodto be some ‘Act of God’ or other entirely fortui-tous event. But shipyards tend to develop thedefinition so as to embrace practically any typeof event that might result in a delay in deliveryof the vessel. After a long list of events the ship-yard may even have inserted words expressly ex-tending the definition to include events resul-ting from the negligence of the shipyard itself.An extension which should wherever possiblebe resisted by the purchaser.

A shipbuilding contract is, at least as far asEnglish law is concerned, viewed as a contractfor the sale of goods and is subject to Englishsale of goods legislation which potentially imp-lies warranties as to merchantability, quality, fit-ness for purpose and description. It is againstthis background that questions of liquidateddamages often have to be considered. Liquida-ted damages for delay in delivery often carrywith them the downside that in case the vessel isdelivered early the shipyard may be entitled toclaim a bonus. Where the purchaser wishes toretain a right to rescind the contract and rejectthe vessel if delivery is delayed then an express

Shipbuilding contractscut off period needs to be specified inthe contract. Since such periods wouldusually be computed excluding permis-sible delays, the wording and scope of

the force majeure provision may also be vital inthis context. Liquidated damages should also beagreed for failure of the vessel to meet its designspeed. The compulation should always be basedupon the performance of the vessel during itsspeed trial. The customary allowance on speedis only .3 knot in this context and the purchasershould endeavour to insert a right to reject thevessel altogether if the deficiency exceeds .5knot. But in the case of a speed deficiency thatdoes not result in rejection, the period for whichdamages may be recovered may range fromanything from a few months to the anticipated30 year lifetime of the vessel, the actual period isa reflection of the negotiating skill of the per-sonnel who agree the contract terms. Very sim-ilar considerations apply when damages are cal-culable by reference to excessive fuel consump-tion. However, in the case of a deficiency indeadweight, damages are often calculated as astraight percentage discount on the price. Apurchaser should do his utmost to ensure thatany characteristics of the vessel that may be sub-ject to liquidated damages should be guaranteedfigures and not expressed to be ‘about’. Finallyon the question of damages, it should be re-marked that shipyards do often attempt to in-troduce an overall cap on the damages payable.Such a cap should always be resisted by apurchaser.

Another area of potential pitfall is in thechoice of supplier. To avoid problems thepurchaser should ensure that preferred suppliersare specified in detail in the contract and thatthe contract gives them the status of sub cont-ractor to the shipyard so as to prevent any diffi-cult in relation to the scope of the warranties gi-ven by the shipyard as head contractor.

The above are just some of many points thatarise in most negotiations. A purchaser con-templating negotiations with a shipyard needsto ensure that his team conducting the negotia-tions is skilled in these areas as well as the purelytechnical and commercial fields as they mayhave just as much if not more influence on theeventual cost of the newbuilding and the suc-cessful outcome of the project. ■

Julian Morgan, Morgans solicitors, 108 Fenchurch St, London EC3M 5TJ,Tel +44 20 7481 1003; Fax +44 20 7481 1004;

E-mail [email protected]; Website www.morgans-law.com

Julian MorganMORGANS SOLICITORS, London

9


information aboutwhen and how muchM/S XXX is turningand to whom she is di-recting her call. All theOOWs, within radiorange, will be put undersevere stress due to this inaccurate and incom-plete information. The stress will last until atleast the ARPA radar equipped ships, after twoto three minutes, will detect that one of the tar-gets on the display is turning and might be M/SXXX.

It has been argued that OOWs, on board AISequipped ships, sometimes will actively agreeon actions in conflict with COLREG, due totheir knowledge about the name of the othership.

This might happen, but one must not forgetthat mariners make such calls anyway todaywithout knowing whom they are addressing. To

prohibit the OOW to use AIS would be like toprohibit the use of radar.

Pilots, barge captains, ferries etc.In very busy areas, such as harbours, rivers andarchipelagos, the need for a high update ratemode AIS is evident. The limitations of theARPA radar to track ships due to target swap-ping from a ship to land, beacons, bridges andother ships makes the ARPA capabilities very li-mited in narrow and congested waters.

Today there is a strong feeling among marin-ers navigating in harbours, rivers and archipela-gos, that AIS will improve the safety and to a

great extent solve the limita-tions of the radar due to thefollowing AIS capabilities:◆ ‘Look behind’ a bend in a channel or behind an island in the archipelago to detect the presence of other ships

and identify.◆ Predict the exact position of a meeting with

another ship in a river or in an archipelago forinstance to avoid narrow areas.

◆ Identify the ship’s port of destination.◆ Identify the size and the draft of ships in vici-

nity.◆ Detect a change in a ship’s heading almost in

real time.◆ Identify a ferry leaving the shore bank in a

river.◆ Identify fixed obstacles, like oil rigs, ship

wrecks, dangerous to shipping.◆ Identify slowly moving targets, like log rafts,

AIS Radar

AIS

16


The Lords Overturn

lower Courts’ decisions

on Time Charterers’ Orders

in Voyage Routeing


Court on the basis that the charterers’ instruc-tions were not orders or directions as to theemployment of the vessel pursuant to Clause 8but were orders or directions as to the naviga-tion of the vessel. Charterers’ appeal to theCourt of Appeal was dismissed, then charterersappealed to the House of Lords.

The Lords accepted Charterers’ argumentsthat whether routeing matters are matters of na-vigation will be a question of fact and degree,and that charterers are not precluded, when gi-ving employment orders, from prescribing aspart of those orders, matters of routeing relatingto the commercial use of the vessel. In their ar-gument, charterers claimed that ‘navigation’ re-

red. It is possible for a master to make a deci-sion which could be covered by the exceptionbefore the vessel set sail, for example whetheror not tug assistance would be required forunberthing manoeuvres.

The master must act reasonably – he has (andthis is not new) the right to exercise his discre-tion and refuse orders on safety or other naviga-tional grounds but he must be prepared to justi-fy his decision. In the present case, over a periodof three months, 360 vessels had followed thesame northerly route. This was evidence thatthe northerly route was the usual route to fol-low. There was no evidence that any other routewas the usual route. The master has always beencontractually obliged to proceed with the ‘ut-most despatch’; to take a longer route withoutjustification is a breach of that contractual obli-gation. The master remains responsible for thesafety of the vessel, her crew and her cargo. Ifan order is given compliance with which expo-ses the vessel to a risk which the owners havenot agreed to bear, the master is entitled to refu-

se to obey it. In the HILL HARMONYcase, this exception did not provide a de-fence. Firstly, the breach of contract wasthe breach of both aspects of the owners’

obligations under Clause 8 of the time charter –to prosecute the voyage with the ‘utmostdespatch’ and to comply with the orders and di-rections of the charterers as regards the employ-ment of the vessel. Secondly, any error whichthe master made in that connection was not anerror in the navigation or management of thevessel; it did not concern any matter of seaman-ship. Thirdly, the owners failed to discharge theburden of proof which lay upon them to bringthemselves within the exception.

The industry reactions to the Lords’ decisionhave been diverse, with some saying that the de-cision simply clarifies the law in accordancewith commercial reality whilst others have com-mented that owners should insist upon an addi-tional routeing clause in the charterparty allo-wing charterers to provide advice or recommen-dations to the master on the choice of route, butexcluding matters of routeing from the scope ofthe employment clause. It is important to re-member, however, that in the HILL HARMO-NY, on the evidence, it was found that themaster’s decision to take the longer route didnot fall within the exception that to complywith charterers’ orders would expose the vesselto a risk which the owners had not agreed tobear.

■

■ ■ Subject to overriding factors of safety andthe express terms of the relevant charterparty,time charterers are entitled to give routeing ord-ers to the shipowners and their master.

The vessel HILL HARMONY was time char-tered on an amended 1946 NYPE form andcontained the usual negligent navigation excep-tion but no special routeing clauses. The ques-tion was whether the master of the ship couldrefuse to follow time charterers’ instructions asto which route to take when crossing the Paci-fic.

There were two trans-Pacific voyages fromVancouver to ports in Japan. Time chartererswanted the vessel to follow the shorter norther-ly ‘Great Circle Route’, as recommended byOcean Routes, but the master opted for themore southerly ‘Rhumb Line Route’. Timecharterers claimed that owners were in breachof time charter by disregarding their voyagerouting instructions, which had resulted in anincrease of time taken for the voyage, by aboutten days, with an over consumption of bunkersby about 200 tonnes. Time charterers claimedthat the Master had failed to prosecute the voy-ages with the utmost despatch and/or had failedto follow the orders and directions of the char-terers as regards the employment of the vesselpursuant to Clause 8 of the charterparty.

Owners contended that the orders and choiceof route did not fall within the ambit ofemployment of the vessel but went to naviga-tion and all matters of navigation were withinthe sole province of the master and in the eventthere was any fault in respect of navigation, ow-ners’ liability was excluded under Article IVRule 2(a) of the Hague and Hague-Visby Rules.

The dispute was referred to arbitration wherea majority held that owners were in breach ofClause 8 of the time charter and that ownerscould not rely upon the Article IV Rule 2(a).The arbitrators found that the reason why themaster refused to follow Ocean Route’s recom-mendation was that the vessel had suffered typ-hoon damage on a previous voyage when usingthe northerly route, but that the master had fai-led to act reasonably in all the circumstances inrejecting the charterers’ instructions on bothvoyages.

Owners successfully appealed to the High



THE HILL HARMONY CASE

lated to decisions as to the routeing of a vesselwhile in motion.

The Lords held that:◆ The obligation to prosecute voyages with ‘ut-

most despatch’ would ordinarily require themaster to take the route which is shortest andtherefore quickest.

◆ Subject to safety considerations and the spe-cific terms of the charter, time charterers maynot only order a vessel to sail from A to B,but may also direct the route to be followedbetween the two.

◆ In the absence of navigational reasons fornot taking the shortest and quickest route,the master had been contractually obliged totake it.

◆ The negligent navigation exception couldnot apply to protect the owners in respect ofa choice not to perform these contractualobligations; and further could not cover thechoice of route because this did not concernany matter of ‘seamanship’.

◆ Whether the negligent navigation exceptioncould apply did not depend on where andwhen the relevant acts or omissions occur-

10


aids, may today be assisted with his navigation ifhe is able to get navigational assistance fromshore.

Shore based pilotage with radar is normally li-mited to small and moderately sized shipswhich generally are more manoeuvrable than,for example, large tankers. The limitations of ra-dars make shore based pilotage suitable only inareas where the navigable water is sufficient toseparate the traffic, and where the ship could besupervised only by giving bearings to, for ex-ample, waypoints.

If only the DGPS position from a ship, butno heading, is transmitted via the AIS, the VTSoperator will get an exact position of the ship’santenna at the moment, as well as the speed andcourse over ground for the same antenna. Theship’s heading and the position of other parts ofthe same ship, at the same moment, is howeverunknown. This uncertainty of the real situationcould lead to mistakes of importance. For in-stance, a 350 meter long tanker with the anten-na situated on top of the wheelhouse at thestern, starts to turn to starboard. The ship’scourse will then change to starboard, but initial-

ly the stern with its anten-na will swingslightly to port, as

the ship is turningaround its so called

pivot point. There isobviously, besides to de-

termine and transmit theexact position of the antenna,

a need to include the headingin the transmission. The ARPA

radar tracks the part of the ship,which gives the best radar return,

normally on a loaded tanker the super-structure at the stern. A big tanker, tur-

ning with the superstructure at the sterntracked by radar, could have turned 30-50

degrees before this is detected by the ARPAradar on another ship or at the VTS, and

now up to four to five minutes have passedsince the turn started.To be able to improve the tracking and the

detection of a course change of a ship from oth-er ships or from the VTS, the ship’s heading andDGPS antenna position have also to be trans-mitted at a high update rate. The best way oftransmitting this kind of information would beif vessels were equipped with an AIS working in‘Beacon Mode’ and a high update rate.

RadarIt has been argued that with an AIS display pre-senting AIS ships, the OOW will forget to ‘finetune’ his radar to detect small crafts. It is impor-tant to emphasise that the radar is, and will re-main, one of the most important instrumentson the bridge, also in the future. It is importantthat the OOW is taught the differences betweenradar and AIS and the importance of tuning theradar to detect small crafts without AIS onboard.

Technical

sounding arrays etc., which are unable to takerapid evasive actions.

VTSRadar is today the main sensor of the VTS todetect a ship. The VTS radar has almost thesame errors in range and bearing resolution asall other radars, although it has a known posi-tion and is North oriented without the errors ofa compass involved. The limitations of theARPA radar to track ships due to target swap toland, beacons, bridges and other ships, makethe tracking facility in the ARPA rather limited.

VTSs are today limited to track ships, for in-stance, in a bay or when approaching a harbourfrom sea. There is a requirement for improvingVTS to be able to:◆ Cover areas where radar coverage is almost

impossible to achieve, like rivers and archipe-lagos.

◆ Identify radar blips on the VTS radar automa-tically.

◆ Interrogate ships for information regardingtype of cargo.

◆ Track with a high update rate, the ferry goingbetween two ports in the bay or a river conti-nuously, without needing to do it every timethe radar tracking has swapped to another tar-get or, when the ferry has been moored to apier or passed too close to a beacon or a pas-sing ship.

◆ Know which port a ship is bound for.◆ Know the size and the draft of ships in the

vicinity.◆ Detect a change in a ship’s heading almost in

real time.◆ Identify slowly moving targets, like log rafts,

sounding arrays etc., which are unable to takerapid evasive actions.The only AIS solution that could solve all the

requirements of the VTS, is a high update ratemode AIS with interrogating capabilities.

The establishment of a global AIS in general,or a landbased AIS reception network in parti-cular, may actually mitigate the need for VTS inmany areas. The cost of installing and maintain-ing an AIS network is minute compared to aVTS radar network.

Marine Search and Rescue (SAR)SAR operations would be much more efficientif all the Rescue Units (RU) were fitted with AISto quickly identify the ship closest to a distresssituation.

During a search operation all the craftscould be tracked and plotted enabling theMarine Rescue Co-ordination Centres(MRCC) to monitor the progress, to directthe available resources efficiently and to as-certain a search coverage without gaps.Furthermore, all surrounding ships and RUsas well as the MRCC could identify an AISequipped ship in distress. The actual emer-gency status of the ship could also be deter-mined automatically.

Man Over Board (MOB) alarm will most pro-bably be one of the features allowing all otherships in vicinity to have the same MOB posi-tion displayed, when one of the ships have acti-vated the MOB alarm.

Fishing boats and pleasure craftsMost of the small ships will not be equippedwith AIS which makes the radar the most im-portant sensor to detect their existence.

If mandatory AIS carriage requirement couldbe applied to fishing vessels, it would enable na-tional fishing agencies to enforce fishing restric-tions more efficiently.

Shore based pilotage – headingThe captain on a ship with no radar or a radardisturbed by sea/rain clutter and with a veryweak radar return from shore and navigational

Flint VTS Malmö.

15


■ ■ Complainant Jaime Beltran was employed as radio officer on board thevessel MV “Eurasian Charm” by Magsaysay Lines, Inc. for its foreign principalTransportes Navieros, Inc., (“respondents” for brevity) pursuant to a contract ofemployment dated December 17th, 1996. On June 24th, 1997, while the saidvessel was at Shikama Anchorage in Japan, complainant felt numb and weak.He could not also move his right arm and leg. He was confined at the hospitalin Japan for one (1) month due to cerebral hemorrhage. On July 24th, 1997,complainant was repatriated to Manila for further medical treatment. Medicalreports disclosed that he was suffering from hypertensive cardiovascular diseasewith LVH; intracerebral hemorrhage (L) thalamus. This resulted in his perma-nent paralysis.

On March 10th 1998, complainant filed a complaint for disability benefits,reimbursement of medical expenses and attorney’s fees. Respondents opposed,arguing that complainant was already afflicted with the diagnosed illness evenbefore he boarded the said vessel.

The Labor Arbiter denied the respondents position that the complainant’sillness was pre-existing. Accordingly, he awarded a disability compensation ofGrade I (or permanent and total disability) in the sum of US$60,000. The LaborArbiter also awarded to complainant moral and exemplary damages on the gro-und of bad faith on the part of respondents; and attorney’s fees as complainantwas compelled to incur litigation expenses to protect his rights and interests.

The NLRC’s ruling:In sustaining the Labor Arbiter, the NLRC ruled that while it is true that the

complainant’s pre-employment medical examination (or PEME) revealed thatthe latter had slight cardiomegaly (or ‘enlargement of the heart’) and a bloodpressure of 140/90, nevertheless, by employing complainant and issuing a cleanbill of health to the latter, ‘respondents took the risk that during the effectivityof complainant’s contract his condition can progress to a heart disease.’ TheNLRC likewise affirmed the Labor Arbiter’s award of moral and exemplarydamages and attorney’s fees.

VIOLETA BELTRAN for and in behalf of JAIME BELTRAN, complainant,vs. MAGSAYASAY LINES, INC. and/or TRANSPORTES NAVIEROS, INC.,respondents, NLRC NCR OFW Case No. (M) 98-03-0290/CA No. 021440-99, September 20th, 2000.

■

The below article is the second in a series of articles written by Mr Ruben T. DelRosario, Managing Partner of Del Rosario & Del Rosario Law Office, the Club’scorrespondents in the Philippines. The articles published are intended to summari-se points of interest in the material discussed therein. They are not intended to beexhaustive or to be legal advice with respect to the matters discussed. The decisionrendered by the NLRC and referred to in this particular article sets out that hiring ofa seafarer with a pre-existing medical condition makes aggravation of that medicalcondition compensable.We are grateful to Mr Del Rosario for allowing us to publish this article in The Swe-dish Club Letter.

Personal Injury / News from London

Pre-existing illness■ ■ On December 15th 2000 we tookpossession of our new office in 100Fenchurch Street. After three years inFountain House it was time to move on,mainly due to the fact that the number ofstaff in the London office is growing.Two new claims handlers have beenadded, namely Ken Littlejohn on FD&Dand Steve Wareham on P&I. Steve hasworked for many years as our P&I cor-respondent in the UK with Pandi Claimsand he is now on secondment to theClub.

Reinsurance rates saw a sharp rise at lastrenewal and this is expected to filterthrough to direct rates towards the end of2001. The marine capacity at Lloyd’s isshrinking and now stands at about 13 percent of total capacity. This figure hasfallen steadily since the 1970s, when itwas around 40 per cent. With increasedrates and lower marine capacity atLloyd’s, it is expected that brokers in theLondon market will, to a greater extentthan before, be placing business in mar-kets outside of Lloyd’s.

A disappointing decision was recentlyrendered by the High Court in Londonon an arbitration application regardingNotice of Readiness. A valid Notice ofReadiness could only be given once thevessel was securely moored at the berth.The Court held that laytime could notcommence without a valid Notice ofReadiness being tendered. Dischargeoperations spanned a period of threemonths and owners were unable to claimdemurrage. The decision is being appea-led. For further details of this decision,please contact our FD&D specialists inthe London office. ■

Newsfrom

London

Fredrik KruseGENERAL MANAGER


New officein 100Fenchurch

Mr Ruben T. Del RosarioMANAGING PARTNER

Del Rosario & Del Rosario, Manila

11


Anti CollisionThe radar has been the primary mean to preventcollisions at sea in restricted visibility. The ne-cessity to use a plotted ship’s course and speedthrough water, to be able to get its actualheading as accurate as possible, is obvious. Stillthe difference in course and speed through wa-ter, between a tanker and a car carrier in a strongwind, is considerable.

With an AIS, the identification, heading andthe change in heading could be determinedwith a high update rate and some of the inhe-rent limitations of radars could be solved. TheAIS also shows the navigational status of an-other ship with AIS, i.e. that two ships equippedwith AIS, that meet in restricted visibility, haveall the information that the navigation lightscould show, including name and port of desti-nation.

The heading is taken from the compass and isnot affected, neither when the AIS is using ahigh accuracy nor a low accuracy positioningsensor. The faster the nominal update rate is,the faster the mariner on another ship, or an ob-server in a VTS, will detect a course change.This means that a ship with high speed needs a

higher nominal update rate than a ship withslow speed.

Type of ship Reportinginterval

Ship at anchor or moored 3 minShip 0-14 knots 12 secShip 0-14 knots and changing course 4 secShip 14-23 knots 6 secShip 14-23 knots and changing course 2 secShip >23 knots 3 secShip >23 knots and changing course 2 sec

Path predictionThe large potential of transmitting the rate ofturn of the ship, together with all the other mo-vement parameters, is still not fully recognised.This enables both the VTS and approachingships to make a rather accurate prediction of thepath a ship is taking some 30–90 seconds ahead.This gives more time and better information forall the other players in the traffic environmentto plan their moves.

Tests are also in progress to make use of aGPS attitude sensor, or a ‘GPS-compass’ if youlike, to determine the attitude of the ship in sixdegrees of freedom.

Route planningShipping routes within a VTS area are normallywell defined, including alternative routes bet-ween two points, to the point that they could beindexed. One could anticipate a requirement toplan the route of a ship in advance, either by theOOW or supplied by the VTS. In either case theplan, consisting of the appropriate index num-bers, could be interchanged utilising AIS. Thiswould enable interested parties to compare theplanned route of the ship with the actual pathtaken.

Short message communicationThe limitation of any radio system with all userson the same channel is the capacity. This is trueboth for voice and data communication. TheAIS would make it possible to utilise a shortmessage scheme, i.e. to produce an indexed listof predetermined traffic messages. There couldbe addressed (point-to-point) messages like 1)“You are now within VTS area boundaries”, 2)“Switch immediately to VHF channel NN” andso on. In the latter case, the NN is an attributeto be supplied by the user. The actual transmit-ted message is constituted of the index number

14


■ ■ Pre-engagement medical examinations andthe impact examinations have on the liability towhich an employer is exposed are well known toall shipowners and managers who have expe-rienced the frustration and risk involved in ha-ving a crewmember serving on board in an un-acceptable medical condition, physically ormentally, which should have rendered him/herunfit for sea service. The safety aspect of havingunfit seafarers on board cannot be emphasisedenough. Apart from the seafarer’s own well-be-ing and safety, it is easy to appreciate the riskimposed on colleagues, the operation of the ves-sel and the environ-ment. The quality ofpre-engagement med-ical examinations, aswell as the quality ofthe clinics and exami-ning physicians in-volved, is essential.

The SwedishClub’s experience isthat the number of claims caused by illnesseswhich could, and should have been detected inthoroughly conducted pre-engagement medicalexaminations have increased substantially bothin number and value. We know from statisticsthat the cost of claims for crew medicare is in-creasing worldwide and we strongly believe thatthe quality of pre-engagement medical examina-tions is an important factor in the high numbersof repatriations and medical charges.

Ensuring qualityWith the aim of ensuring quality and assistingour members, the Club has commenced a pro-ject in the Philippines in which a supervised pre-engagement medical examination, PEME, pack-age will be available to its members at a compe-titive price. The intention of the Club is to initi-ally enter into an agreement with a few clinicsthat have the facilities and are able to follow theguidelines and medical form established by theClub for a comprehensive and satisfactoryPEME. The relevant agreement will include anample reporting system enabling the Club toclosely follow the results and development ofthe project to ensure quality and success.

The purpose of selecting a few clinics is to beable to compare the services provided as well asthe reporting of results and the interpretation ofthe medical rating system in place. As the Phi-lippines supplies approximately 20 per cent ofthe seafarers engaged worldwide, Manila was

“The number of claims caused by illnesseswhich could, and should have beendetected in thoroughly conductedpre-engagement medical examinationshave increased substantially both innumber and value”

geographically the most natural choice for thefirst phase of this project.

In order to fully utilise the knowledge andcapacity within the Club’s network, our projectis being conducted in co-operation and with thesupport of our correspondents Messrs. Del Ro-sario & Del Rosario and Mr Nigel Griffiths ofThe Marine Advisory Medical and RepatriationService in his capacity as one of the medical ad-visors to the Club.

Visit to ManilaIn November 2000, the undersigned visited anumber of medical clinics in Manila togetherwith Mr Ruben Del Rosario and Mr Nigel Grif-fiths. This visit served the purpose of gaining afirst hand impression of a carefully selectednumber of clinics. The questions raised with thevarious clinics included but were not limited toapplicable QA systems in place, qualification ofstaff, retention of records, reporting systems,clients on whose behalf PEME was conducted,interpretation of the medical rating systems foroverseas contract workers and seafarers, and fi-nally procedures for dealing with candidateswho fail the PEME. Facilities as well as equip-ment were inspected from the Club’s perspecti-ve and also a strict medical perspective.

Prior to the visit, each clinic had been provi-ded with a draft of the PEME Guidelines produ-ced by the Club for consideration and com-ments. These Guidelines are presently being

revised following constructive input from vari-ous medical experts. Once finalised, they willform part of The Swedish Club’s loss preven-tion publications. Following the article in ourlatest Club Letter, No. 3 – 2000, referring to thecaptioned project, we have been approached bya number of members though we must advisethat until revised and finalised, the Guidelinesare merely an internal working product.

A vital tool in successfulrisk management

In order for The Swedish Club PEME project toproceed in the best interest of our members, astudy will be conducted during the course ofthis spring establishing the requests, wishes andbenefits of our members. To best serve your in-terests, we would thus be grateful if you wouldkindly respond to the issues raised in the studyas accurately as possible. Based on experienceand statistical information we are convincedthat the aims and objectives of the PEME pro-ject, that is, to avoid unnecessary costs and repa-triations as a result of only employing medicallyfit crew on board, will prove to be cost-effectivefor members, hence a vital tool in successful riskmanagement.

We welcome input from our members andask you kindly to contact Birgitta Hed shouldyou have any questions or comments regardingthis project.

■

Personal Injury

LESS CLAIMSwith comprehensive Pre-Engagement Medical Examinations

Birgitta HedCLAIMS EXECUTIVE

Claims & Legal Support DepartmentThe Swedish Club, Göteborg

12


only, together with the eventual attribute. If acommon list of messages could be agreed upon,it should be multilingual, thereby avoiding mis-understandings because of language difficulties.

Silent VTSIn some areas of the world, e.g. rivers and lowtraffic areas where the traffic density do not jus-tify VTS, an idea called ‘Silent VTS’ has evol-ved. Instead of installing conventional VTSs onshore, the AIS equipped ships will act as theirown VTSs and use the AIS to get their situationawareness.

Display presentationThe AIS provides several possibilities for dis-playing the AIS information. The minimum re-quired display is a three line alphanumeric dis-play that presents bearing, distance, name andall other information in a spread sheet format,enabling the OOW to make manual inputs andto identify a ship by comparing bearing andrange from the radar PPI. Most probably the mi-nimum display will be very rarely used. ManyECDIS manufacturers are today implementingthe AIS symbols in their equipments. Manufac-turers, as ADVETO, STN ATLAS, TRANSASMARINE, ANS, ICAN are already handling theAIS in their softwares.

It is sometimes not possible to present theAIS information on an old radar screen butwhen AIS will be mandatory on new buildings,

radar manufacturers will be able to include thisfacility. AIS targets, superimposed on the radardisplay, will inform the operator whether thetargets are AIS equipped or not.

IEC already has a draft proposal for AIS sym-bology to display on ECDIS and/or ENC sys-tems.

To reduce clutter on the radar or the ECDISdisplay due to too many AISs appearing at thesame time, the AIS symbols could be ‘Active’ or‘Sleeping’.

‘Active’ means that a green triangle is show-ing the targets heading and (if high accurate po-sitions used) the COG/SOG vector.

‘Sleeping’ means that the mariner has chosento suppress vectors and heading line and only asmall green triangle pointing in the direction ofthe heading is shown. A sleeping target could al-ways be activated if the mariner selects it.

High update rateA modern ARPA radar is able to select and track20 targets with an update rate of three seconds.The symbol on the PPI will follow the target, ex-cept when a target swap is appearing. Due to thelimitations of the ARPA, a course alteration ofanother ship will normally not be detected untilone or two minutes after the course change. Fora large tanker it will take up to five minutes.Furthermore, another one or two minutes areneeded for the ARPA to present a reliable targetvector with course and speed through the water.

It is obvious that a high update rate is neededfor AIS targets, superimposed on a radar display.If the update rate is too slow there will be situa-tions, when using smaller ranges, where the AISsymbol will not catch up with the radar target.

International standardisation for AISWITHIN IMO: Carriage requirements in SOLAS Carriage requirements in SOLAS Carriage requirements in SOLAS Carriage requirements in SOLAS Carriage requirements in SOLASas adopted at MSC 73 in December 2000.

Automatic identification systems (AIS)Automatic identification systems (AIS)Automatic identification systems (AIS)Automatic identification systems (AIS)Automatic identification systems (AIS)All ships of 300 gross tonnage and upwards en-gaged on international voyages and cargo shipsof 500 gross tonnage and upwards not engagedon international voyages and passenger ships, ir-respective of size, shall be fitted with AIS, as fol-lows:1. ships constructed on or after July 1st 2002;2. ships engaged on international voyages cons-tructed before July 1st 2002;

◆ in the case of passenger ships not later thanJuly 1st 2003;

◆ in the case of tankers, not later than thefirst Safety Equipment Survey on or afterJuly 1st 2003;

◆ in the case of ships, other than passengerships and tankers, of 50,000 gross tonnageand upwards, not later than July 1st 2004;

◆ in the case of ships, other than passengerships and tankers, of 10,000 gross tonnageand upwards but less than 50,000 gross ton-nage, not later than July 1st 2005;

Ships with a selforganisingbroadcast AIS onboard will see eachother as soon asthey are in radiorange.

Technical

13


◆ in the case of ships, other than passengerships and tankers, of 3,000 gross tonnageand upwards but less than 10,000 gross ton-nage, not later than July 1st 2006;

◆ in the case of ships, other than passengerships and tankers, of 300 gross tonnage andupwards but less than 3,000 gross tonnage,not later than July 1st 2007; and

3. ships not engaged on international voyagesconstructed before July 1st 2002, not laterthan July 1st 2008.

4. The Administration may exempt ships fromthe application of the requirements whensuch ships will be taken permanently out ofservice within two years after the implementa-tion date.

5. AIS shall:

◆ provide automatically to appropriatelyequipped shore stations, other ships andaircraft information, including the ship’sidentity, type, position, course, speed, navi-gational status and other safety-related in-formation;

◆ receive automatically such informationfrom similarly fitted ships;

◆ monitor and track ships; and◆ exchange data with shore-based facilities.

6. The requirements of paragraph 5 above shallnot be applied to cases where internationalagreements, rules or standards provide for theprotection of navigational information.

7. AIS shall be operated taking into account theguidelines adopted by the Organisation.

National AIS-effortsA number of countries are actively developingand promoting AIS into daily operational use.

Sweden: The AIS technology has been testedand evaluated in a great number of ship installa-tions and shore stations, by the Swedish Mariti-me Administration (SMA), the Navy and theStyrsö-company. The concept has been foundto be very reliable and has great possibilities in anumber of applications. In co-operation bet-ween SMA, Coast Guard, Defence Forces andCivil Aviation Autority a shore based AIS netcovering the entire Swedish coastline out to 30M, including the greater lakes, has been establis-hed. The AIS information will be presented toall four administrations where needed. Existingdata networks are used and extended where ne-cessary. A presentation on ECDIS-displays is av-ailable in the VTS centers in Göteborg and Mal-mö and in Traffic centers in Trollhättan, Stock-holm, Norrköping, Gävle, Södertälje and Mar-strand.

SMA will install AIS equipment on board allpilot boats, bouytenders and icebreakers. At the

‘Being in touch doesn’t mean being incommand.’ Make the OOW, pilot andthe captain the ones who benefits themost from an AIS system and it willincrease the safety of shipping andnavigation significantly in the future.

moment, 85 units are in operation.Ships and aircrafts from the Swedish Coast

Guard and the Navy and all helicopters andships participating in SAR operations will beAIS equipped within a couple of years.

Finland: The local geographic conditions in Fin-land are ideal for a large scale utilisation of AIS.The Finnish government has to build a 17-sta-tion fixed AIS-network to cover all Finnish wa-ters. This network will be connected to the com-mon Marine Traffic Data Network of Finland.

The VTS-centres in Åbo and Helsinki haveimplemented AIS-presentations.

Norway: An AIS-network is connected to theOslofjord VTS.

Sweden, Norway and Finland in co-operation: Swe-den, Norway and Finland have started an AIS-information exchange project.

Lithuania: A coastline covering AIS-network in-cluding presentation facilities, is established.

Estonia, Latvia: Plans have been worked out toestablish coastline covering AIS networks with-in short.

Germany: The ferries in traffic between Swedenand Germany have been testing AIS for twoyears. A permanent AIS will then be installed.

USA: United States Coast Guard (USCG) hasbeen conducting AIS test demonstrations in

New Orleans.

ConclusionThe AIS will within short make the navigationsafer by enhancing the possibility of detectingthe wherabouts of other ships, even if they arebehind a bend in a channel or river or behindan island in an archipelago. The AIS will alsosolve the inherent problem with all radars, bydetecting fishing boats and smaller ships, fittedwith AIS, in sea-clutter and in heavy rain.

Innovative technologies like ECDIS and ship-to-ship and ship-to-shore AIS, have a big poten-tial in improving safety in the maritime field inthe future. It will also make it possible to identi-fy, track and supervise ships from shore with amuch higher and more sustainable accuracythan with a shore based radar.

For further information please contact:

Benny Pettersson,Swedish Maritime Administration,Box 27808, SE-115 93 Stockholm, Sweden.Fax: +46 8 666 66 90.E-mail: [email protected].

Rolf Zetterberg,Swedish Maritime Administration,SE-601 78 Norrköping, Sweden.Fax: +46 11 126 791.E-mail: [email protected].

Technical

11


Anti CollisionThe radar has been the primary mean to preventcollisions at sea in restricted visibility. The ne-cessity to use a plotted ship’s course and speedthrough water, to be able to get its actualheading as accurate as possible, is obvious. Stillthe difference in course and speed through wa-ter, between a tanker and a car carrier in a strongwind, is considerable.

With an AIS, the identification, heading andthe change in heading could be determinedwith a high update rate and some of the inhe-rent limitations of radars could be solved. TheAIS also shows the navigational status of an-other ship with AIS, i.e. that two ships equippedwith AIS, that meet in restricted visibility, haveall the information that the navigation lightscould show, including name and port of desti-nation.

The heading is taken from the compass and isnot affected, neither when the AIS is using ahigh accuracy nor a low accuracy positioningsensor. The faster the nominal update rate is,the faster the mariner on another ship, or an ob-server in a VTS, will detect a course change.This means that a ship with high speed needs a

higher nominal update rate than a ship withslow speed.

Type of ship Reportinginterval

Ship at anchor or moored 3 minShip 0-14 knots 12 secShip 0-14 knots and changing course 4 secShip 14-23 knots 6 secShip 14-23 knots and changing course 2 secShip >23 knots 3 secShip >23 knots and changing course 2 sec

Path predictionThe large potential of transmitting the rate ofturn of the ship, together with all the other mo-vement parameters, is still not fully recognised.This enables both the VTS and approachingships to make a rather accurate prediction of thepath a ship is taking some 30–90 seconds ahead.This gives more time and better information forall the other players in the traffic environmentto plan their moves.

Tests are also in progress to make use of aGPS attitude sensor, or a ‘GPS-compass’ if youlike, to determine the attitude of the ship in sixdegrees of freedom.

Route planningShipping routes within a VTS area are normallywell defined, including alternative routes bet-ween two points, to the point that they could beindexed. One could anticipate a requirement toplan the route of a ship in advance, either by theOOW or supplied by the VTS. In either case theplan, consisting of the appropriate index num-bers, could be interchanged utilising AIS. Thiswould enable interested parties to compare theplanned route of the ship with the actual pathtaken.

Short message communicationThe limitation of any radio system with all userson the same channel is the capacity. This is trueboth for voice and data communication. TheAIS would make it possible to utilise a shortmessage scheme, i.e. to produce an indexed listof predetermined traffic messages. There couldbe addressed (point-to-point) messages like 1)“You are now within VTS area boundaries”, 2)“Switch immediately to VHF channel NN” andso on. In the latter case, the NN is an attributeto be supplied by the user. The actual transmit-ted message is constituted of the index number

14


■ ■ Pre-engagement medical examinations andthe impact examinations have on the liability towhich an employer is exposed are well known toall shipowners and managers who have expe-rienced the frustration and risk involved in ha-ving a crewmember serving on board in an un-acceptable medical condition, physically ormentally, which should have rendered him/herunfit for sea service. The safety aspect of havingunfit seafarers on board cannot be emphasisedenough. Apart from the seafarer’s own well-be-ing and safety, it is easy to appreciate the riskimposed on colleagues, the operation of the ves-sel and the environ-ment. The quality ofpre-engagement med-ical examinations, aswell as the quality ofthe clinics and exami-ning physicians in-volved, is essential.

The SwedishClub’s experience isthat the number of claims caused by illnesseswhich could, and should have been detected inthoroughly conducted pre-engagement medicalexaminations have increased substantially bothin number and value. We know from statisticsthat the cost of claims for crew medicare is in-creasing worldwide and we strongly believe thatthe quality of pre-engagement medical examina-tions is an important factor in the high numbersof repatriations and medical charges.

Ensuring qualityWith the aim of ensuring quality and assistingour members, the Club has commenced a pro-ject in the Philippines in which a supervised pre-engagement medical examination, PEME, pack-age will be available to its members at a compe-titive price. The intention of the Club is to initi-ally enter into an agreement with a few clinicsthat have the facilities and are able to follow theguidelines and medical form established by theClub for a comprehensive and satisfactoryPEME. The relevant agreement will include anample reporting system enabling the Club toclosely follow the results and development ofthe project to ensure quality and success.

The purpose of selecting a few clinics is to beable to compare the services provided as well asthe reporting of results and the interpretation ofthe medical rating system in place. As the Phi-lippines supplies approximately 20 per cent ofthe seafarers engaged worldwide, Manila was

“The number of claims caused by illnesseswhich could, and should have beendetected in thoroughly conductedpre-engagement medical examinationshave increased substantially both innumber and value”

geographically the most natural choice for thefirst phase of this project.

In order to fully utilise the knowledge andcapacity within the Club’s network, our projectis being conducted in co-operation and with thesupport of our correspondents Messrs. Del Ro-sario & Del Rosario and Mr Nigel Griffiths ofThe Marine Advisory Medical and RepatriationService in his capacity as one of the medical ad-visors to the Club.

Visit to ManilaIn November 2000, the undersigned visited anumber of medical clinics in Manila togetherwith Mr Ruben Del Rosario and Mr Nigel Grif-fiths. This visit served the purpose of gaining afirst hand impression of a carefully selectednumber of clinics. The questions raised with thevarious clinics included but were not limited toapplicable QA systems in place, qualification ofstaff, retention of records, reporting systems,clients on whose behalf PEME was conducted,interpretation of the medical rating systems foroverseas contract workers and seafarers, and fi-nally procedures for dealing with candidateswho fail the PEME. Facilities as well as equip-ment were inspected from the Club’s perspecti-ve and also a strict medical perspective.

Prior to the visit, each clinic had been provi-ded with a draft of the PEME Guidelines produ-ced by the Club for consideration and com-ments. These Guidelines are presently being

revised following constructive input from vari-ous medical experts. Once finalised, they willform part of The Swedish Club’s loss preven-tion publications. Following the article in ourlatest Club Letter, No. 3 – 2000, referring to thecaptioned project, we have been approached bya number of members though we must advisethat until revised and finalised, the Guidelinesare merely an internal working product.

A vital tool in successfulrisk management

In order for The Swedish Club PEME project toproceed in the best interest of our members, astudy will be conducted during the course ofthis spring establishing the requests, wishes andbenefits of our members. To best serve your in-terests, we would thus be grateful if you wouldkindly respond to the issues raised in the studyas accurately as possible. Based on experienceand statistical information we are convincedthat the aims and objectives of the PEME pro-ject, that is, to avoid unnecessary costs and repa-triations as a result of only employing medicallyfit crew on board, will prove to be cost-effectivefor members, hence a vital tool in successful riskmanagement.

We welcome input from our members andask you kindly to contact Birgitta Hed shouldyou have any questions or comments regardingthis project.

■

Personal Injury

LESS CLAIMSwith comprehensive Pre-Engagement Medical Examinations

Birgitta HedCLAIMS EXECUTIVE

Claims & Legal Support DepartmentThe Swedish Club, Göteborg

10


aids, may today be assisted with his navigation ifhe is able to get navigational assistance fromshore.

Shore based pilotage with radar is normally li-mited to small and moderately sized shipswhich generally are more manoeuvrable than,for example, large tankers. The limitations of ra-dars make shore based pilotage suitable only inareas where the navigable water is sufficient toseparate the traffic, and where the ship could besupervised only by giving bearings to, for ex-ample, waypoints.

If only the DGPS position from a ship, butno heading, is transmitted via the AIS, the VTSoperator will get an exact position of the ship’santenna at the moment, as well as the speed andcourse over ground for the same antenna. Theship’s heading and the position of other parts ofthe same ship, at the same moment, is howeverunknown. This uncertainty of the real situationcould lead to mistakes of importance. For in-stance, a 350 meter long tanker with the anten-na situated on top of the wheelhouse at thestern, starts to turn to starboard. The ship’scourse will then change to starboard, but initial-

ly the stern with its anten-na will swingslightly to port, as

the ship is turningaround its so called

pivot point. There isobviously, besides to de-

termine and transmit theexact position of the antenna,

a need to include the headingin the transmission. The ARPA

radar tracks the part of the ship,which gives the best radar return,

normally on a loaded tanker the super-structure at the stern. A big tanker, tur-

ning with the superstructure at the sterntracked by radar, could have turned 30-50

degrees before this is detected by the ARPAradar on another ship or at the VTS, and

now up to four to five minutes have passedsince the turn started.To be able to improve the tracking and the

detection of a course change of a ship from oth-er ships or from the VTS, the ship’s heading andDGPS antenna position have also to be trans-mitted at a high update rate. The best way oftransmitting this kind of information would beif vessels were equipped with an AIS working in‘Beacon Mode’ and a high update rate.

RadarIt has been argued that with an AIS display pre-senting AIS ships, the OOW will forget to ‘finetune’ his radar to detect small crafts. It is impor-tant to emphasise that the radar is, and will re-main, one of the most important instrumentson the bridge, also in the future. It is importantthat the OOW is taught the differences betweenradar and AIS and the importance of tuning theradar to detect small crafts without AIS onboard.

Technical

sounding arrays etc., which are unable to takerapid evasive actions.

VTSRadar is today the main sensor of the VTS todetect a ship. The VTS radar has almost thesame errors in range and bearing resolution asall other radars, although it has a known posi-tion and is North oriented without the errors ofa compass involved. The limitations of theARPA radar to track ships due to target swap toland, beacons, bridges and other ships, makethe tracking facility in the ARPA rather limited.

VTSs are today limited to track ships, for in-stance, in a bay or when approaching a harbourfrom sea. There is a requirement for improvingVTS to be able to:◆ Cover areas where radar coverage is almost

impossible to achieve, like rivers and archipe-lagos.

◆ Identify radar blips on the VTS radar automa-tically.

◆ Interrogate ships for information regardingtype of cargo.

◆ Track with a high update rate, the ferry goingbetween two ports in the bay or a river conti-nuously, without needing to do it every timethe radar tracking has swapped to another tar-get or, when the ferry has been moored to apier or passed too close to a beacon or a pas-sing ship.

◆ Know which port a ship is bound for.◆ Know the size and the draft of ships in the

vicinity.◆ Detect a change in a ship’s heading almost in

real time.◆ Identify slowly moving targets, like log rafts,

sounding arrays etc., which are unable to takerapid evasive actions.The only AIS solution that could solve all the

requirements of the VTS, is a high update ratemode AIS with interrogating capabilities.

The establishment of a global AIS in general,or a landbased AIS reception network in parti-cular, may actually mitigate the need for VTS inmany areas. The cost of installing and maintain-ing an AIS network is minute compared to aVTS radar network.

Marine Search and Rescue (SAR)SAR operations would be much more efficientif all the Rescue Units (RU) were fitted with AISto quickly identify the ship closest to a distresssituation.

During a search operation all the craftscould be tracked and plotted enabling theMarine Rescue Co-ordination Centres(MRCC) to monitor the progress, to directthe available resources efficiently and to as-certain a search coverage without gaps.Furthermore, all surrounding ships and RUsas well as the MRCC could identify an AISequipped ship in distress. The actual emer-gency status of the ship could also be deter-mined automatically.

Man Over Board (MOB) alarm will most pro-bably be one of the features allowing all otherships in vicinity to have the same MOB posi-tion displayed, when one of the ships have acti-vated the MOB alarm.

Fishing boats and pleasure craftsMost of the small ships will not be equippedwith AIS which makes the radar the most im-portant sensor to detect their existence.

If mandatory AIS carriage requirement couldbe applied to fishing vessels, it would enable na-tional fishing agencies to enforce fishing restric-tions more efficiently.

Shore based pilotage – headingThe captain on a ship with no radar or a radardisturbed by sea/rain clutter and with a veryweak radar return from shore and navigational

Flint VTS Malmö.

15


■ ■ Complainant Jaime Beltran was employed as radio officer on board thevessel MV “Eurasian Charm” by Magsaysay Lines, Inc. for its foreign principalTransportes Navieros, Inc., (“respondents” for brevity) pursuant to a contract ofemployment dated December 17th, 1996. On June 24th, 1997, while the saidvessel was at Shikama Anchorage in Japan, complainant felt numb and weak.He could not also move his right arm and leg. He was confined at the hospitalin Japan for one (1) month due to cerebral hemorrhage. On July 24th, 1997,complainant was repatriated to Manila for further medical treatment. Medicalreports disclosed that he was suffering from hypertensive cardiovascular diseasewith LVH; intracerebral hemorrhage (L) thalamus. This resulted in his perma-nent paralysis.

On March 10th 1998, complainant filed a complaint for disability benefits,reimbursement of medical expenses and attorney’s fees. Respondents opposed,arguing that complainant was already afflicted with the diagnosed illness evenbefore he boarded the said vessel.

The Labor Arbiter denied the respondents position that the complainant’sillness was pre-existing. Accordingly, he awarded a disability compensation ofGrade I (or permanent and total disability) in the sum of US$60,000. The LaborArbiter also awarded to complainant moral and exemplary damages on the gro-und of bad faith on the part of respondents; and attorney’s fees as complainantwas compelled to incur litigation expenses to protect his rights and interests.

The NLRC’s ruling:In sustaining the Labor Arbiter, the NLRC ruled that while it is true that the

complainant’s pre-employment medical examination (or PEME) revealed thatthe latter had slight cardiomegaly (or ‘enlargement of the heart’) and a bloodpressure of 140/90, nevertheless, by employing complainant and issuing a cleanbill of health to the latter, ‘respondents took the risk that during the effectivityof complainant’s contract his condition can progress to a heart disease.’ TheNLRC likewise affirmed the Labor Arbiter’s award of moral and exemplarydamages and attorney’s fees.

VIOLETA BELTRAN for and in behalf of JAIME BELTRAN, complainant,vs. MAGSAYASAY LINES, INC. and/or TRANSPORTES NAVIEROS, INC.,respondents, NLRC NCR OFW Case No. (M) 98-03-0290/CA No. 021440-99, September 20th, 2000.

■

The below article is the second in a series of articles written by Mr Ruben T. DelRosario, Managing Partner of Del Rosario & Del Rosario Law Office, the Club’scorrespondents in the Philippines. The articles published are intended to summari-se points of interest in the material discussed therein. They are not intended to beexhaustive or to be legal advice with respect to the matters discussed. The decisionrendered by the NLRC and referred to in this particular article sets out that hiring ofa seafarer with a pre-existing medical condition makes aggravation of that medicalcondition compensable.We are grateful to Mr Del Rosario for allowing us to publish this article in The Swe-dish Club Letter.

Personal Injury / News from London

Pre-existing illness■ ■ On December 15th 2000 we tookpossession of our new office in 100Fenchurch Street. After three years inFountain House it was time to move on,mainly due to the fact that the number ofstaff in the London office is growing.Two new claims handlers have beenadded, namely Ken Littlejohn on FD&Dand Steve Wareham on P&I. Steve hasworked for many years as our P&I cor-respondent in the UK with Pandi Claimsand he is now on secondment to theClub.

Reinsurance rates saw a sharp rise at lastrenewal and this is expected to filterthrough to direct rates towards the end of2001. The marine capacity at Lloyd’s isshrinking and now stands at about 13 percent of total capacity. This figure hasfallen steadily since the 1970s, when itwas around 40 per cent. With increasedrates and lower marine capacity atLloyd’s, it is expected that brokers in theLondon market will, to a greater extentthan before, be placing business in mar-kets outside of Lloyd’s.

A disappointing decision was recentlyrendered by the High Court in Londonon an arbitration application regardingNotice of Readiness. A valid Notice ofReadiness could only be given once thevessel was securely moored at the berth.The Court held that laytime could notcommence without a valid Notice ofReadiness being tendered. Dischargeoperations spanned a period of threemonths and owners were unable to claimdemurrage. The decision is being appea-led. For further details of this decision,please contact our FD&D specialists inthe London office. ■

Newsfrom

London

Fredrik KruseGENERAL MANAGER


New officein 100Fenchurch

Mr Ruben T. Del RosarioMANAGING PARTNER

Del Rosario & Del Rosario, Manila

9


information aboutwhen and how muchM/S XXX is turningand to whom she is di-recting her call. All theOOWs, within radiorange, will be put undersevere stress due to this inaccurate and incom-plete information. The stress will last until atleast the ARPA radar equipped ships, after twoto three minutes, will detect that one of the tar-gets on the display is turning and might be M/SXXX.

It has been argued that OOWs, on board AISequipped ships, sometimes will actively agreeon actions in conflict with COLREG, due totheir knowledge about the name of the othership.

This might happen, but one must not forgetthat mariners make such calls anyway todaywithout knowing whom they are addressing. To

prohibit the OOW to use AIS would be like toprohibit the use of radar.

Pilots, barge captains, ferries etc.In very busy areas, such as harbours, rivers andarchipelagos, the need for a high update ratemode AIS is evident. The limitations of theARPA radar to track ships due to target swap-ping from a ship to land, beacons, bridges andother ships makes the ARPA capabilities very li-mited in narrow and congested waters.

Today there is a strong feeling among marin-ers navigating in harbours, rivers and archipela-gos, that AIS will improve the safety and to a

great extent solve the limita-tions of the radar due to thefollowing AIS capabilities:◆ ‘Look behind’ a bend in a channel or behind an island in the archipelago to detect the presence of other ships

and identify.◆ Predict the exact position of a meeting with

another ship in a river or in an archipelago forinstance to avoid narrow areas.

◆ Identify the ship’s port of destination.◆ Identify the size and the draft of ships in vici-

nity.◆ Detect a change in a ship’s heading almost in

real time.◆ Identify a ferry leaving the shore bank in a

river.◆ Identify fixed obstacles, like oil rigs, ship

wrecks, dangerous to shipping.◆ Identify slowly moving targets, like log rafts,

AIS Radar

AIS

16


The Lords Overturn

lower Courts’ decisions

on Time Charterers’ Orders

in Voyage Routeing


Court on the basis that the charterers’ instruc-tions were not orders or directions as to theemployment of the vessel pursuant to Clause 8but were orders or directions as to the naviga-tion of the vessel. Charterers’ appeal to theCourt of Appeal was dismissed, then charterersappealed to the House of Lords.

The Lords accepted Charterers’ argumentsthat whether routeing matters are matters of na-vigation will be a question of fact and degree,and that charterers are not precluded, when gi-ving employment orders, from prescribing aspart of those orders, matters of routeing relatingto the commercial use of the vessel. In their ar-gument, charterers claimed that ‘navigation’ re-

red. It is possible for a master to make a deci-sion which could be covered by the exceptionbefore the vessel set sail, for example whetheror not tug assistance would be required forunberthing manoeuvres.

The master must act reasonably – he has (andthis is not new) the right to exercise his discre-tion and refuse orders on safety or other naviga-tional grounds but he must be prepared to justi-fy his decision. In the present case, over a periodof three months, 360 vessels had followed thesame northerly route. This was evidence thatthe northerly route was the usual route to fol-low. There was no evidence that any other routewas the usual route. The master has always beencontractually obliged to proceed with the ‘ut-most despatch’; to take a longer route withoutjustification is a breach of that contractual obli-gation. The master remains responsible for thesafety of the vessel, her crew and her cargo. Ifan order is given compliance with which expo-ses the vessel to a risk which the owners havenot agreed to bear, the master is entitled to refu-

se to obey it. In the HILL HARMONYcase, this exception did not provide a de-fence. Firstly, the breach of contract wasthe breach of both aspects of the owners’

obligations under Clause 8 of the time charter –to prosecute the voyage with the ‘utmostdespatch’ and to comply with the orders and di-rections of the charterers as regards the employ-ment of the vessel. Secondly, any error whichthe master made in that connection was not anerror in the navigation or management of thevessel; it did not concern any matter of seaman-ship. Thirdly, the owners failed to discharge theburden of proof which lay upon them to bringthemselves within the exception.

The industry reactions to the Lords’ decisionhave been diverse, with some saying that the de-cision simply clarifies the law in accordancewith commercial reality whilst others have com-mented that owners should insist upon an addi-tional routeing clause in the charterparty allo-wing charterers to provide advice or recommen-dations to the master on the choice of route, butexcluding matters of routeing from the scope ofthe employment clause. It is important to re-member, however, that in the HILL HARMO-NY, on the evidence, it was found that themaster’s decision to take the longer route didnot fall within the exception that to complywith charterers’ orders would expose the vesselto a risk which the owners had not agreed tobear.

■

■ ■ Subject to overriding factors of safety andthe express terms of the relevant charterparty,time charterers are entitled to give routeing ord-ers to the shipowners and their master.

The vessel HILL HARMONY was time char-tered on an amended 1946 NYPE form andcontained the usual negligent navigation excep-tion but no special routeing clauses. The ques-tion was whether the master of the ship couldrefuse to follow time charterers’ instructions asto which route to take when crossing the Paci-fic.

There were two trans-Pacific voyages fromVancouver to ports in Japan. Time chartererswanted the vessel to follow the shorter norther-ly ‘Great Circle Route’, as recommended byOcean Routes, but the master opted for themore southerly ‘Rhumb Line Route’. Timecharterers claimed that owners were in breachof time charter by disregarding their voyagerouting instructions, which had resulted in anincrease of time taken for the voyage, by aboutten days, with an over consumption of bunkersby about 200 tonnes. Time charterers claimedthat the Master had failed to prosecute the voy-ages with the utmost despatch and/or had failedto follow the orders and directions of the char-terers as regards the employment of the vesselpursuant to Clause 8 of the charterparty.

Owners contended that the orders and choiceof route did not fall within the ambit ofemployment of the vessel but went to naviga-tion and all matters of navigation were withinthe sole province of the master and in the eventthere was any fault in respect of navigation, ow-ners’ liability was excluded under Article IVRule 2(a) of the Hague and Hague-Visby Rules.

The dispute was referred to arbitration wherea majority held that owners were in breach ofClause 8 of the time charter and that ownerscould not rely upon the Article IV Rule 2(a).The arbitrators found that the reason why themaster refused to follow Ocean Route’s recom-mendation was that the vessel had suffered typ-hoon damage on a previous voyage when usingthe northerly route, but that the master had fai-led to act reasonably in all the circumstances inrejecting the charterers’ instructions on bothvoyages.

Owners successfully appealed to the High



THE HILL HARMONY CASE

lated to decisions as to the routeing of a vesselwhile in motion.

The Lords held that:◆ The obligation to prosecute voyages with ‘ut-

most despatch’ would ordinarily require themaster to take the route which is shortest andtherefore quickest.

◆ Subject to safety considerations and the spe-cific terms of the charter, time charterers maynot only order a vessel to sail from A to B,but may also direct the route to be followedbetween the two.

◆ In the absence of navigational reasons fornot taking the shortest and quickest route,the master had been contractually obliged totake it.

◆ The negligent navigation exception couldnot apply to protect the owners in respect ofa choice not to perform these contractualobligations; and further could not cover thechoice of route because this did not concernany matter of ‘seamanship’.

◆ Whether the negligent navigation exceptioncould apply did not depend on where andwhen the relevant acts or omissions occur-

8


■ ■ International Association of Marine Aidsto Navigation and Lighthouse Authorities(IALA) presented the first proposal of AIS toIMO. IALA is mainly dealing with shore basedaids to navigation including Vessel Traffic Servi-ces (VTS). The problem to identify ships on theradar displays in the VTS centres was, however,one of the reasons for the VTS committee ofIALA to initiate the development of a DigitalSelective Calling (DSC) transponder system(AIS). Their operational requirement for theAIS was mainly focusing on the needs of theVTS stations to identify radar targets approach-ing the coast. Requirements from seagoing ma-riners and others with interest in AIS were notlooked at.

Who is demanding AIS and whocould derive advantage from AIS?

The demand from politicians and maritime aut-horities to monitor movements of ships in their

territorial waters, in order to prevent accidentsand maritime disasters is rapidly increasing.Coastal states are responsible for traffic sepa-ration schemes, routing areas andfishing areas in their territorialwaters.

These states demand com-pulsory compliance by the usersof these waters and have a need tocontrol ‘areas to be avoided’.

The fact that users are monitored and identi-fied from shore will most probably result in agreater compliance with traffic separation sche-mes, routing measures and fishing regulations.

It has been argued that accidents in coastalareas could be avoided if ships were identified.This is maybe true in some cases, but a shorebased station, identifying a ship, is limited toadvise actions only by using the VHF radiocommunication facilities. Furthermore, misun-derstandings of the advice can appear due to,

for instance, language problems.The Exxon Valdez, the Aegean Sea and the

Braer were all identified, long before theyran aground. Consequently,radio contact is not alwaysthe solution.

The only person to stopthe engine or change the

course to avoid a grounding orcollision is the Officer Of the Watch

(OOW). The OOW is also deciding on actionsto follow in order to comply with the CollisionRegulations (COLREG). Ships equipped withAIS enables the OOWs to be the first ones tobenefit from the AIS system by getting an im-proved situation awareness capability.

Ambiguous calls, with a stressed voice, in thenight, such as: “Ship on my starboard side, shipon my starboard side, this is M/S XXX, I am tur-ning to port”, have made many OOWs wishingfor an AIS to identify M/S XXX and to get the

This article is published with

permisson from the Swedish

Maritime Administration (SMA).

Text: Captain/Pilot Benny Pettersson,

SMA Sweden, assisted by Senior

Development Engineer Rolf

Bäckström, Finland.

Automatic Identification System (AIS) is a new technical systemthat makes it possible to monitor ships from other ships, and fromshore based stations. AIS will become a requirement. See theInternational standardisation section. AIS equipped ships willcontinuously transmit a short message containing information ofposition, course over ground (COG), speed over ground (SOG), gyrocourse (heading), etc. Ships equipped with AIS meeting anywhere onearth will be able to identify and track each other without beingdependent of shore stations.Shore stations will also get the same information from ‘AIS-ships’ withinthe VHF area of the station when monitoring the coastal areas and theports. The AIS is using a broadcast and an interrogating self organisedtechnology, the so called AIS STDMA/ITDMA, that operates ship-to-shipand ship-to-shore including limited communication capabilities. AISdoes not require a radar.This article will stress the advantages of the AIS, show how to use it andwhy the techniques can operate and handle the information from allships even in the most dense shipping waters of the world.

Technical

THIS IS

17


P O I N T ST ON O T E


■ ■ There are four principal industry pro formashipbuilding contracts: These are; the SAJ formpublished by the Shipbuilders Association of Ja-pan, the AWES form adopted by the Associa-tion of West European ship-builders, the Nor-wegian shipbuilding contract produced by theAssociation of Norwegian Marine Yards and theMARAD form produced by the Maritime Subsi-dy Board of the United States Department ofCommerce. Typically every shipyard has itsown standard form contract and on its face willstate upon which pro forma it has been based.This can be confusing in that it might suggest tothe shipowner that he is being asked to contractupon some industry standard form whereasmore accurately the shipyard may be expectedto have made extensive amendments to the proforma contract so as to produce a standard cont-ract weighted heavily in its own favour.

Any negotiations then based upon the ship-yard’s own contract necessarily commence froma position very favourable to the shipyard. It isalso correct to observe that shipyard personnelare usually far more experienced than theshipowner’s personnel at negotiating the termsof the shipbuilding contract. A practice, whichpartially attempts to redress this imbalance ofnegotiating position, has been for the shipow-ner to attempt to impose its own standard formupon the shipyard. The success of the shipow-ner in achieving this is invariably dependantupon market conditions at the time of the nego-tiations. Because the precise wording of theshipyard contracts tends to be highly individu-al, it is preferable to focus upon some of the fea-tures of these contracts rather than their precisewording.

One key factor is the passing of title underthe contract. Under contracts based upon theSAJ pro forma it may be anticipated that titlewill not pass under the contract until construc-tion has been completed and the vessel has beenformally delivered. This has two implicationsfor the purchaser. Firstly, it means that in theevent of the shipyard experiencing financial dif-ficulties during construction the purchaserwould be unable to take possession of the in-complete vessel or materials appropriated to itas the purchaser has no title to them. In a liqui-dation they may be sold for the benefit of all theshipyard creditors and the purchaser is in a weaknegotiating position as regards completion ofthe vessels. Secondly, because the purchaser hasno title he may find it more difficult and expen-sive to finance the construction, since he cannot

offer the incomplete vessel as security to a len-der. This situation is to be contrasted with thatmore typically found under a contract basedupon the AWES form where, typically, title willpass during the course of construction. Thepurchaser is thereby placed in a stronger posi-tion if the shipyard were to become insolventand has the added advantage that the incomple-te vessel may be offered as security to a lender.

Force Majeure provisions in shipyard cont-racts are also worthy of close attention. In itspurest form force majeure is usually understoodto be some ‘Act of God’ or other entirely fortui-tous event. But shipyards tend to develop thedefinition so as to embrace practically any typeof event that might result in a delay in deliveryof the vessel. After a long list of events the ship-yard may even have inserted words expressly ex-tending the definition to include events resul-ting from the negligence of the shipyard itself.An extension which should wherever possiblebe resisted by the purchaser.

A shipbuilding contract is, at least as far asEnglish law is concerned, viewed as a contractfor the sale of goods and is subject to Englishsale of goods legislation which potentially imp-lies warranties as to merchantability, quality, fit-ness for purpose and description. It is againstthis background that questions of liquidateddamages often have to be considered. Liquida-ted damages for delay in delivery often carrywith them the downside that in case the vessel isdelivered early the shipyard may be entitled toclaim a bonus. Where the purchaser wishes toretain a right to rescind the contract and rejectthe vessel if delivery is delayed then an express

Shipbuilding contractscut off period needs to be specified inthe contract. Since such periods wouldusually be computed excluding permis-sible delays, the wording and scope of

the force majeure provision may also be vital inthis context. Liquidated damages should also beagreed for failure of the vessel to meet its designspeed. The compulation should always be basedupon the performance of the vessel during itsspeed trial. The customary allowance on speedis only .3 knot in this context and the purchasershould endeavour to insert a right to reject thevessel altogether if the deficiency exceeds .5knot. But in the case of a speed deficiency thatdoes not result in rejection, the period for whichdamages may be recovered may range fromanything from a few months to the anticipated30 year lifetime of the vessel, the actual period isa reflection of the negotiating skill of the per-sonnel who agree the contract terms. Very sim-ilar considerations apply when damages are cal-culable by reference to excessive fuel consump-tion. However, in the case of a deficiency indeadweight, damages are often calculated as astraight percentage discount on the price. Apurchaser should do his utmost to ensure thatany characteristics of the vessel that may be sub-ject to liquidated damages should be guaranteedfigures and not expressed to be ‘about’. Finallyon the question of damages, it should be re-marked that shipyards do often attempt to in-troduce an overall cap on the damages payable.Such a cap should always be resisted by apurchaser.

Another area of potential pitfall is in thechoice of supplier. To avoid problems thepurchaser should ensure that preferred suppliersare specified in detail in the contract and thatthe contract gives them the status of sub cont-ractor to the shipyard so as to prevent any diffi-cult in relation to the scope of the warranties gi-ven by the shipyard as head contractor.

The above are just some of many points thatarise in most negotiations. A purchaser con-templating negotiations with a shipyard needsto ensure that his team conducting the negotia-tions is skilled in these areas as well as the purelytechnical and commercial fields as they mayhave just as much if not more influence on theeventual cost of the newbuilding and the suc-cessful outcome of the project. ■

Julian Morgan, Morgans solicitors, 108 Fenchurch St, London EC3M 5TJ,Tel +44 20 7481 1003; Fax +44 20 7481 1004;

E-mail [email protected]; Website www.morgans-law.com

Julian MorganMORGANS SOLICITORS, London

7


■ ■ We have been advised by TCI Abidjanthat, due to the political and economic situa-tion at present that prevails in Ivory Coast, the-re are more and more stowaways either of IvoryCoast nationality or foreigners, who have beenresidents in the country for some time, who aretrying to flee and are obtaining access to vesselsin the port of Abidjan.

We have had many stowaways recently whohave been discovered once the vessel had sailedfrom Abidjan and the masters have then set intothe port of San Pedro to have them disem-barked.

However, one of the main problems is, that

■ ■ Most tankers are equipped with P/V (pres-sure/vacuum) valves and, in many instances,pressure control systems. Yet all tankers remainat risk of damage resulting from over-pressurisa-tion, should equipment fail to function or a sig-nificant human error occur.

The Club has been involved in two seriousover-pressurisation cases during the past year.One involved an Ultra Large Crude Carrier.

An investigation found that over-pressurisa-tion had resulted from human error – a failureto open the tank to the mast riser. Pumping hadcontinued to the point at which the problembecame self-evident. The inert gas isolating val-ve to the damaged tank was in the closed posi-tion and no alternative ventilation was availablewhen pumping began in preparation for tankflushing. This vessel was not equipped with P/Vvalves to each cargo tank.

The error led to severe damage to a tank andlongitudinal bulkhead; repairs required 170 ton-nes of new steel. The cost was around US $ 1million.

During 2000, another large tanker sufferedsimilar structural damage as a result of over-pressurisation in almost identical circumstanc-es. A number of more minor cases were also re-ported during the year.

Beyond the significant cost of major repairs,over-pressurisation or under-pressurisation inci-dents have a potential to cause death or seriousinjury. It is important to be proactive in thisarea and take steps to ensure seafarers followcorrect procedures and avoid incidents whichcan have serious human, environmental and fi-nancial consequences.

Good maintenance is a central issue, yet thereis always the possibility of human error. A fleet-wide campaign, to raise awareness of the dan-gers, can be a worthwhile investment. One pri-ority is to ensure that seafarers have a compre-hensive understanding of pumping and pum-ping technology. ■

It pays to be proactive

Stowawaysalthough we know they em-barked in the port of Abid-jan, as they, in majority, arenot of Ivory Coast national-

ity and most of them do not have on them resi-dent cards, we are meeting with extreme diffi-culties with the Immigration Authorities andthe police to have them accepted on the IvoryCoast territory and owners are having to pay forrepatriation costs, including escorts etc., to theircountries of origin.

We therefore strongly recommend that anymember trading with the Ivory Coast should beparticularly vigilant and make absolutely cer-tain, prior to sailing from the port of Abidjanthat a thorough search is made and any stowa-way be disembarked, otherwise owners will beheld liable for the costs of repatriation. ■

Eltvedt & O’Sullivan asManagers for TCI Africa, ourcorrespondents in Abidjan, havebeen kind enough to provide uswith the following information.

in Abidjan

Technical/ Stowaways / News from Tokyo / Basic Facts

Newsfrom

Tokyo

■ ■ Most Japanesepeople feel 2001 willnot be a good year forJapan. The confusionof Japanese politics willnot be solved soon.The Japanese bankshave yet to settle theirbad debt. No immedia-te drastic measures canbe found. Japanese stock prices are stilllow and this reflects the situation.The unification of Japanese insurancecompanies is almost finished. Six or sevenInsurance Groups (both life and non-lifeinsurance companies) will act in Japan. In1999 about 15 non-life insurance compa-nies acted in Japan.2000 was a good year for Japanese ship-ping companies. But in view of the Japa-nese situation in 2001, they have to redu-ce their share that are dependent on theJapanese market but increase the share ofthe global market.From this year, the biggest hull underwri-ter, Tokio Marine & Fire Insurance Co.,Ltd. with the Standard Club have startedto underwrite P&I insurance for the bluewater tonnage. At the moment, they areselling this new product to the shippingcompanies who attach the hull insurancewith Tokio Marine & Fire InsuranceCompanies.Our All-in-One policy is recognised inJapan too. ■

All-in-onepolicy inJapan

Ryozou ImaiGENERAL MANAGER

The Swedish Club Japan

Number of vessels entered 1,274GT (million) 66.9Insured value (USD million) 20,143Gross premium (USD million) 57.0Average age 12.7

Hull & MachineryNumber of vessels entered 721GT (million) 21.3GT Covered 10.6

Protection & IndemnityNumber of vessels entered 802GT (million) 14.9

Freight, Demurrage & DefenceNumber of vessels entered 329GT (million) 7.96

BASIC FACTSPER MARCH 1ST 2001

Club contact: Loss Prevention & Technical Department, The Swedish Club, Göteborg.

18


The Merits of In-House Adjusting

■ ■ On an appeal from an Arbitration Award,the High Court in London has recently decidedthat in the event that no valid notice of readin-ess is tendered then laytime will not commenceat all until a valid notice has been tendered.The commencement of discharge operationswill not make any difference. A valid noticemust be tendered.

The decision in the case of Glencore GrainLtd – v – Flacker Shipping Ltd (The HAPPYDAY) has surprised the industry and the outco-me has been described as commercially absurd.It should be noted that owners are intending toappeal the decision, but until such time as theappeal is heard the High Court decision is goodlaw.

Briefly the facts of the case are that the vesselwas chartered on an amended Synacomex formand was to load and proceed direct to one totwo safe berth(s) anchorage(s) out of a numberof named ports in charterer’s option. The vesselloaded 23,000 mts of wheat at Odessa and pro-ceeded to Cochin where she arrived off the portat 1630 hours on Friday September 25th 1998.She was unable to immediately enter the portbecause she had missed the tide. Nevertheless,the Master purported to serve Notice of Readin-ess at 1630 hours on September 25th. The vesselwas only able to resume her voyage and enterthe port the following day, Saturday, berthing at13.15 hours. In the circumstances where thecharter was a berth charter and there was nocongestion at the berth, the notice of readinessgiven from outside the berth was invalid whengiven. No further notice was ever given. Dis-charge commenced on September 26th but wasnot completed until December 25th.

The Arbitrators decided that no valid noticeof readiness was ever given by owners but thatlaytime had commenced at 0800 hours on Sep-tember 29th which is the earliest time laytimecould have commenced if valid notice had beengiven. The question for the High Court was:can laytime commence under a voyage charter-party requiring service of a valid notice of rea-diness when no valid notice of readiness is everserved? If so, when does it commence?

Mr Justice Langley held that Clause 30 of thecharterparty was clear in its terms. Laytime startsat 8 am on the next working day after a validnotice of readiness has been given in accordan-

ce with its terms. No such notice was ever gi-ven. The notice that was given was not ‘accep-ted’ by the charterers in any sense on which reli-ance can be placed by the owners. The arbitra-tors found that it was only ‘received’. Therefore,the arguments of waiver and estoppel by char-terers were not available to owners. Ownerscould only rely on the fact that discharge opera-tions commenced on Saturday September 26th

and continued thereafter. Mr Justice Langleyheld that if the commencement and continua-tion of discharge operations are to have the ef-fect of validating an invalid notice of readinessor are to form some kind of notional notice ofreadiness then this would be inconsistent withthe Court of Appeal’s decision in the MEXICO1 in which Lord Justice Mustill rejected the con-cept of inchoate notice. There, Lord JusticeMustill held that the notice of readiness wouldnot take effect later when the statements in the

THE HAPPY DAY CASE

“The outcome has been described as commercially absurd.”notice of readiness became true, unless it couldbe proved that charterers had waived their rightto receive a valid notice of readiness. In addi-tion, Mr Justice Langley in the HAPPY DAYheld that such a finding would be to effectivelyre-write the parties’ contract: in effect to deletetheir clear requirement for a particular notice.

Owners’ claim for demurrage therefore failedand the charterers’ claim for despatch suc-ceeded.

This is a hard decision for owners. Despitethe lengthy discharge operations, no demurragewas found to be payable. Owners could haveavoided this by giving fresh valid notice of rea-diness upon arrival at the berth or at the com-mencement of discharge operations. It remainsto be seen what the Court of Appeal will decideif leave to appeal Mr Justice Langley’s decisionis granted.

■

■ ■ In-house claims adjusting has some impor-tant benefits, with faster results at lower cost. In-house adjusting is a valuable mutual service andthe Club’s adjusting team has the experience,detailed knowledge and records required toprovide an effective service to members.

In-house adjusting contributes to added valueas the commercial option will almost certainlyinvolve additional costs, due to the participa-tion of external adjusters and their technicalconsultants. These extras should be taken intoaccount when examining the financial aspects.

The Club’s in-house adjusting team in Göte-borg, where the adjustments are done, has theimportant advantage of working in close co-operation with the Club’s claims handlers. Allcases can be handled in-house, beyond the largegeneral averages that are tackled by specialistswith i.a. the extensive infrastructure required tocollect security.

Over the past decade, com-puter systems have transfor-med our in-house adjustingcapabilities. The aim is toprovide the member with afair, speedy and correct sett-lement. Efficiency targets areset within the Club’s QualityManagement System. Oneobjective is to settle 80 percent of hull cases within 30days of receipt of the claim.

Such targets place a premium on effectivecommunication with members, especially ontime-sensitive issues. One priority is to collateall the information required to take the deci-sions surrounding settlement. Members cancontribute to rapid claims settlement by presen-ting invoices which have already been approvedby a Club surveyor as fair and reasonable.

The 30-day target acts as a discipline and ourin-house adjusting team members do their bestto meet the challenge through good organisa-tion and prompt problem-solving. Experiencehas shown that having the adjustment drawn upby an external adjuster will almost certainly takelonger than 30 days. Placing 100 per cent withthe Club gives the owner the ultimate benefit ofin-house adjustment and avoiding the inevitabletime consuming collection from following un-derwriters.



The Claims Adjuster: ‘Essential Qualities’◆ A Claims Adjuster must be courteous, diplomatic, shrewd,

persuasive... and even-tempered.

◆ A Claims Adjuster, while the embodiment of virtue, must havean excellent working knowledge of sin and evil in their manyforms.

◆ A Claims Adjuster must understand insurance, shipping,chemistry, physics, book-keeping, banking, law, horse-tradingand human nature.

◆ A Claims Adjuster must know the current price of everything –from a shoestring to a skyscraper.

Freight Demurrage & Defence / Hull & Machinery

6

THE SWEDISH CLUB LETTER 1–2001Technical / News from Hong Kong

■ ■ IT development is very fast. Most membersand other readers of this newsletter have proba-bly evaluated new IT hardware and softwareduring the past few years to find out whether in-vestments in new products would be worthwhileor not. There are often many questions andsome of them will not be answered until the in-vestments have already been made. Increased ef-ficiency at a reasonable cost is what we are look-ing for and even if not all develop-ment has met our expectations, ITand automated systems have to a largeextent changed our work environ-ments. It would probably feel difficultto be without many products today,both ashore and on board the ships.

The Club and its members have pri-marily two areas of common interest –insurance and, unfortunately some-times also, accidents. The author ofthis article attended a seminar in Fe-bruary 2001 aimed at shipping com-panies where a new software product,dealing with both insurance and accidents, waspresented. The Club cannot and should notevaluate the quality of the product, nor makeany comparisons with similar products, but webelieve that it could interest our members tohear a little about the development concerningproducts in this area.

The newly develo-ped software packageconsists of two modu-les – Star Insuranceand Star Event. The in-surance module, which handles most types ofmarine insurance polices, is designed to help in-surance managers keep track of insurance com-panies, policies, premium payments and claims.

The event module aims at facilitating the log-ging of events. Events are defined here as acci-dents, near-accidents and non-conformities.Other important objectives with the module areto provide information required for the hand-ling of claims and to help prevent the recur-

rence of events through a ‘lessons lear-ned’ feature.

Through the event module, if instal-led on board, details about events andtheir consequences can be reported bythe ships’ officers. The corrective ac-tion taken on board and proposals forimprovements can also be entered intothe system. The data is replicated toshore-based staff for necessary action.After investigation and analysis, safetypeople ashore can replicate recom-mendations and ‘lessons learned’ toeither all or a selection of the ships.

The module may also be used as a stand-aloneprogram installed on shore only for the recor-ding and follow-up of events.

The modules have been developed in co-ope-ration with Norwegian Gas Carriers and twomembers of the Club, Wallenius Lines and Ste-na Rederi. Ann-Marie Jansson, Hull Insurance

MORE INFORMATION about Star Insurance andStar Event is available from Star Information SystemAS in Norway.Website: www.sisys.com Tel: +47 22 476 910Fax: +47 22 476 919. E-mail: [email protected]

You may also contact Ann-Marie Jansson,Wallenius Lines Tel: +46 8 772 0500E-mail: [email protected]

We welcome readers who wish to share experienceswith us from similar products to contact MartinHernqvist at the Club’s head office in Göteborg.Contact details are found at the back of thisnewsletter.

Does IT work?

Manager at Wallenius Lines, says: “We expectseveral benefits from the system. It will facilitatethe handling of claims and all people involvedin accident events, such as the designated per-son, fleet manager and insurance manager, willobtain the same information at the same time.”

Ann-Marie Jansson continues: “It is vital thatour ships receive feedback from ashore. The ‘les-sons learned’ feature is an important factor forimproving safety and, furthermore, peoplewould be reluctant to report incidents if we donot ensure that we close the communicationloop and report back the results of our investiga-tions. The concept of using incidents to preventaccidents is a proactive measure that will be ofbenefit to the whole organisation.”

■

■ ■ The Club has finished the renewal season in Asia with-out any major losses and with a few additions. The H&Mmarket showed signs of hardening as losses, especially forLloyd’s, have been accumulating in the last few years. Someshipowners, not insured by the Club, saw significant in-creases. There did not seem to be much movement except forsome shipowners leaving insurers with financial difficulties orin run-off. The increase in GT in Asia was 370,000 mainlyfrom China.

This was the first year since 1994 that The Swedish Clubasked for a general increase on P&I. After almost six years ofreduced premiums, most members accepted the fact that thetide has turned and premiums need to increase slightly. Thestory has been the same for almost all P&I clubs. Premiumsare a bit too low and financial income has not been able to

make up for the difference. This year was not a good yearfor fixed premium P&I. With Jonathan Jones and a fewother facilities in run-off, many owners decided it was timeto move their fleets back into the International Group.With some clubs in the International Group having financi-al difficulties, there were also some movements of fleetsinto more secure clubs. As for The Swedish Club, GT in-creased by 275,000 with new tonnage coming from Japan,Korea, China, Hong Kong and Singapore. FD&D increasedby 200,000 GT. ■

Continued growth in Asia in all segments

Tord NilssonMANAGING DIRECTOR

The Swedish Club Hong Kong Ltd.

Newsfrom

Hong Kong

Newsfrom

Hong Kong

Members expect new software to improve claims handling and safety

Ann-MarieJansson,Hull InsuranceManager atWallenius Lines.

The computer screen showing the claim particular tab of the insurancemodule.

Martin HernqvistLOSS PREVENTION OFFICER


19


■ ■ New Swedish Conditions for Hull & Mach-inery Insurance were published and in use bythe second quarter of 2000. These Conditions,known as ‘AV 2000’, superseded Conditions da-ting back to 1987, however, with minor amend-ments implemented in 1994. The new Condi-tions take account of developments over thepast decade, including the advent of the ISMCode.

The choice of Conditions is entirely a matterfor the individual member. The Swedish Clubprovides cover under all main Hull Conditions,including AV (Swedish), ITC (English), AIHC(American), DTV (German) and NPL (Norwegi-an). AV 2000, in contrast to the English andAmerican Conditions, continues the Swedishtradition of providing ‘all risks’ cover.

Many features of the 1987 Conditions are re-tained in AV 2000, as are some significant diffe-

rences in approach. One example is the treat-ment of constructive total loss. Under SwedishConditions, a CTL is declared if estimated rep-air costs amount to 80 per cent of insured sum,as against 100 per cent in the case of e.g. Englishand American Conditions.

During the first year of use, AV 2000 proved apopular choice with Club members. This popu-larity extends beyond the Swedish shipowningcommunity. AV 2000, for example, has beenwell received by a number of the Club’s mem-bers in Greece and Asia.

AV 2000 was developed in a joint project in-volving the Swedish Shipowners’ Association,the Swedish Association of Marine Underwri-ters and The Swedish Club. It is an agreed docu-ment balancing the interest of the shipownersand underwriters. AV 2000 is furthermore a mo-dern regime. The three partners involved in itscreation were motivated by a strong desire toimprove the product whilst, at the same time,avoiding change for change’s sake.

The improvements include wider coverage.Bunkers and lube oils are now included, as are‘errors in design or construction’. Cover for

AV 2000: A popular choice amongst members‘construction fault’ now applies to the entirevessel, as opposed to being confined to mainengine and boilers provided the damage parthas been approved by class. In addition, cover isprovided to flaws in material, in respect of theentire vessel. These significant changes delivermore comprehensive coverage.

AV 2000 continues the Scandinavian tradi-tion of providing interest on proceeds a provisi-on not seen in other markets beyond Scandina-via. The AV 2000 Conditions, at the same time,represent a refined approach to key areas suchas seaworthiness and the ISM Code. Yet, essen-tial differences between the English and Scandi-navian approaches remain visible in AV 2000.The English tradition, for example, places muchemphasis on warranties. AV 2000, however,continues the Swedish tradition which focuseson safety regulations and the establishment ofcausal relationships between a breach and da-mage. ■

Lars A Malm, Mats Lindau, Fritiof Granberg and Ingrid Andersson.

Our in-house adjusting team, Ingrid Anders-son, Fritjof Granberg and Lars A Malm, inclu-des specialists in engine damage, collision casesand other forms of hull damage. In addition,our Quality Manager, Mats Lindau, assists theteam when required. His technical background,as a naval architect and former ClassificationSurveyor, adds to the team’s expertise. Teammembers also take steps to ensure that they havecurrent knowledge of all major Hull Conditionsin use by the Club, including the American,English, German, Norwegian, Swedish, Danishand Japanese Conditions.

The advantages of in-house adjusting are in-creasing, as the costs of commercial adjusting es-calate. Adjusting fees in the commercial sectorare generally considered expensive and somefirms now charge at levels typical of highly qua-lified London lawyers. This is not a one-off costfor the owner, as it is reflected in the claims re-cord. This may be a significant issue in the caseof a big fleet.

The benefits of in-house adjusting reallycome into play when member, claims handler,Club surveyor and in-house claims adjusterform a strong working partnership. The Clubsurveyor can assist in preparing a specificationfor repairs, assess bids and, following the pla-cing of the repair contract, keep a watchful eyeon the progress of the work.

Several payments on account may be requi-red during a major casualty. Once again, much

time can be saved by ensuring that the atten-ding Club surveyor’s approval of costs is obtai-ned before forwarding documentation to Göte-borg.

Our flexibility is most evident in cases wherethe major insurance types, i.e. Hull & Machine-ry, Protection & Indemnity or Loss of Hire areinvolved and placed with the Club, and most

prominently when we insure Hull & Machineryon a 100 per cent basis.

It should also be mentioned that we sit in clo-se proximity to the Loss Prevention & TechnicalDepartment and obtain, not only in urgent ca-ses, immediate technical advice whenever requi-red, which also helps to reduce costs.

■

Hull & Machinery

PH

OTO

: LENA

BR

YN

GELSSO

N ©

Lars RhodinDIRECTOR

Claims & Legal SupportDepartment

The Swedish Club, Göteborg

5


■ ■ Voyage Data Recorders (VDRs) – or ‘BlackBoxes’ – are about to assume a much higherprofile in the maritime industry, following theInternational Maritime Organization’s decisionto introduce mandatory requirements for theircarriage on ships.

Serious consideration of a marine black boxdates back to the early 1970s, but two cata-strophic ferry accidents – the Herald of Free En-terprise and the Estonia – were the major cata-lysts for action at the IMO.

The new IMO rules (see Table) require VDRson newbuild passenger vessels and other newships of 3,000 gt and over after mid-2002. Theprimary aim, as in the context of civil aviation,is to assist casualty investigators seeking to esta-blish the cause of an accident.

Administrations are free to exempt vessels(other than ro-ro passenger ships), constructedbefore July 1st 2002, from the new VDR carriagerequirements if it can be demonstrated that in-troducing a VDR with the ship’s existing equip-ment is ‘unreasonable and impracticable’.

There was considerable debate, naturally,about the position of existing ships in respect ofmandatory carriage. The IMO decided to carryout a feasibility study, to test the case. The studywill examine, inter alia, practicability, technicalissues surrounding retrofitting, the possibility ofsimplified standards for retrofits and cost impli-cations. The plan is to finalise this study by Ja-nuary 2004. If the study demonstrates a compel-ling need for mandatory carriage of VDRs forexisting ships, SOLAS Chapter V will be amen-ded and associated performance standards draf-ted.

Meanwhile, an IMO Resolution urges go-vernments to ‘encourage’ the fitting of VDRs toexisting vessels. In addition, an EU Council Di-rective from 1999 requires carriage of a VDRby all ro-ro ferries and high speed passengercraft operating to or from a port of a MemberState on a regular service (international and do-mestic), regardless of flag, by February 1st 2003.

The systems produced by the various manu-facturers are similar to the aircraft black box.The ship’s movements can be replayed, togetherwith information on the behaviour of personnelon the bridge and audio/radar inputs. Many ow-ners, especially in the cruise and ferry industries,have contributed to systemsdesign, in the sense that theyare aware of the potential ofthis equipment as a tool for arange of shipboard trainingtasks. For this reason, the de-mands on recorded data tendto exceed the IMO require-

ments, with areas included such as audio fromthe engine control room, extra radar andCCTV. The VDR, however, is an entirely passi-ve system; it does not ‘interrogate’ other sys-tems for data retrieval.

The primary role remains, however, the pro-vision of reliable evidence. In many cases, VDRevidence has been used to successfully defendthe actions of the crew and the position of theowning company. Certainly, post-event analysishas helped management teams better focus theirtraining programmes and, in some instances,improve safety management procedures.

The VDR mandatory requirements wereamongst a package of amendments to the Safetyof Life at Sea (SOLAS) Convention 1974, adop-ted at the 73rd session of the IMO’s MaritimeSafety Committee in November/December2000. The requirements are set out in Regula-tion 20 of a revised SOLAS Chapter V (Safety ofNavigation). The adoption of the carriage re-quirements puts in place the final element ofthree key regulatory components. The first,IMO’s A.861 (20) Performance Standard forVDRs, was adopted in late 1997. The secondelement, the IEC 61996 Technical and Methodsof Testing Protocol, was agreed in August 2000.All three components are now incorporatedinto SOLAS Chapter V.

VDRs currently available are designed tomeet IMO performance standard A.861 (20)and the IEC 61996 Technical Standard. This re-cords all required navigation and status data onthe bridge, including voice and radio communi-cation and radar images. This information ismerged and time-synchronised, allowing theowner’s organisation and/or authorities to carryout an investigation after an incident on boardthe ship or in its close vicinity. Generally, suchsystems retain 12 hours of information at all ti-mes.

Currently, ships are recommended (but notrequired) to carry VDRs. Mandatory carriage ofthe devices is a major step towards making ‘un-explained’ casualties a thing of the past. The1997 performance standards require VDRs tocontinuously maintain sequential records ofpre-selected data items concerning the statusand output of the ship’s equipment and thecommand and control of the ship. The VDR

memory must be housed in a protective capsulethat is brightly coloured and equipped with adevice to aid location.

Cases in which VDR evidence has influencedthe outcome include:

◆ Vessel berthing at yard for drydocking strikesthe jetty (US $150,000 steel damage): this ves-sel was under yard pilotage. When the yardbecame aware that the pilot’s actions hadbeen recorded, they paid for the repairs with-out further question.

◆ Vessel leaving a European port is involved ina minor collision with a coaster: the VDRplayback of the bridge team’s actions demon-strated that procedures required modifica-tion.

◆ Vessel entering a port collides with a yacht:VDR evidence absolved the master of all bla-me.

◆ Vessel entering port collides with an under-water object: the playback showed that thevessel was in the correct position, in the dred-ged channel, so absolving the master fromblame/criticism.

◆ Fire in the engine room: VDR playback resol-ved conflicting evidence over the sequence ofevents, confirming that the crew’s responsehad been professional and effective.

◆ Funnel fire: the VDR evidence helped to ex-pose a potential fault in the fire detection sys-tem – explaining a ‘slow’ response from thebridge team. In addition, a review of messagesfrom the vessel helped to explain why therewas an apparent over-reaction to the incidentfrom the Coastguard.

The introduction of VDRs may have someprofound legal and insurance implications. The-se issues are now under consideration by admi-ralty lawyers and the P&I clubs. There is, ofcourse, the question of whether owners shouldinsure against the cost of locating and recove-ring black boxes. More importantly, perhaps,there are unresolved questions surrounding le-gal professional privilege and the rights of par-ties concerning access to recorded data. ■

Mandatory carriage of the Black Box

Regulation 20: VDR statutory carriage requirements: SOLAS◆ Passenger ships constructed on or after July 1st 2002.

◆ Ro-ro passenger ships constructed before July 1st 2002, not later than the first survey on or after July 1st 2002.

◆ Passenger ships other than ro-ro passenger ships constructed before July 1st 2002, not later than January 1st 2004.

◆ Ships, other than passenger ships, of 3,000 gt and upwards, constructed on or after July 1st 2002.

Club contact: Örjan Karlsson, CLAIMS EXECUTIVE,Claims & Legal Support Department,

The Swedish Club, Göteborg.

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- NEWS - NEWS - NEWS - NEWS - NEWS - NEWS - NEWS - NEWS - NEWS - NEWS - NEWS - NEWS - NEWS - NEWS - NEWS

New ballast water

requirements in Australia

■ ■ From June 1st 2001 additional mandatory

ballast water requirements will be in force in

Australia. The purpose of these requirements is

to prevent exotic diseases being implanted in

Australian waters. The new rules will enable ships

to manage ballast water while en route to Austra-

lia either by way of exchanging ballast water at

sea (or on-board treatment systems) or by using

a ballast water ‘Decision Support System’ develo-

ped by AQIS (Australian Quarantine and Inspec-

tion Service). This system will assist the master

to determine if the water in the ballast tanks is of

a risky nature and provide treatment alternatives.

More information is available at AQIS’ website:

www.aqis.gov.au/docs/ballast/bwbroch.pdf ■

More turbulence on the

commercial market

■ ■ With reinsurance costs on the increase,

many players in the market are being forced to

retain more risk and/or accept more expensive

terms. This is having a dramatic impact on the

cost of cover in the commercial market. As losses

build and the market hardens, concentration is

set to continue. More mergers may be expected!

In addition, more players are likely to desert the

marine market, in some cases leaving their

clients exposed to re-rating, rather than renewal.

■

Under-insured tankers

and gaps in cover

■ ■ High freight rates in the tanker sector have

been accompanied by a sharp rise in hull

values. In many cases, market values now far

exceed insured values and that can lead to a

potentially serious gap in insurance cover.

The Club is concerned that a relatively large

number of tankers may be under-insured in the

new market environment. In a poor freight mar-

ket, the pressure is on to control costs and,

inevitably, this is reflected in the insured value.

Owners have every incentive to ensure that insu-

red value stays in line with falling market prices.

When there is an upturn, however, there is no

corresponding pressure to ensure that market

value and insured value stay in step.

The relationship between market value and

cover is always an issue of importance to owners

and underwriters, but we moved into an entirely

new situation in 2000, given the steep rise in

tanker freight rates. It is important that tanker

owners recognise that a potentially serious gap in

insurance cover may have developed. In a large

collision case, for example, the gap may be as

large as ten per cent – possibly a six-figure short-

fall.Typically, a P&I policy will supplement the

owner’s hull cover in the area of Excess Collision

Liabilities. In the event of a collision, for example,

P&I ECL cover should apply, but there may be a

gap between Hull and P&I covers if the ship is

under-insured. A P&I policy will state that the

vessel must be adequately insured under Hull &

Machinery, or additional covers, so as to reflect

current market value.

The risk of a shortfall, of course, is particularly

acute in a total loss situation, should there be a

marked difference between insured and market

values. Failure to check whether these values are

aligned could prove to be a costly oversight in a

major case. It makes sense to talk to brokers, or

hull underwriters, and obtain an up-to-date view

on existing levels of hull cover. ■

Syria offers customs

settlements at reduced rate

■ ■ It is understood that the Ministry of Finance

in Syria has decided to introduce a reduced rate

for amicable settlement of Customs contraven-

tions. The decision is said to reduce the rate from

25 per cent to ten per cent (of both the value of

the goods concerned and the Customs dues).

The decision is believed to apply to all pending

cases.This decision is of some significance, as ves-

sels calling at Syrian ports often encounter pro-

blems concerning an unusually strict interpreta-

tion of Customs regulations. The reduced rate

offers an opportunity to clear many outstanding

cases.Weight declarations for cargoes such as tim-

ber, as a matter of routine, are calculated on the

basis of average weights. In Syrian ports, howe-

ver, cargoes may be subjected to weight checks

and any deviation from declared weight may

result in a fine for violation of Customs regula-

tions. Fines may be levied even if the owner is

able to produce documentation stating that the

cargo receivers are satisfied.

Some cases have no logical association with

weight! One example involved a shipment of

secondhand diesel engines. One engine was

weighed at a Syrian port. The result differed from

the declared weight and Customs officials took

action.Liner services to Syria frequently run into

‘double trouble’ if cargo bookings are over-subs-

cribed. If any cargo on the manifest is not on

board, there is the risk of being fined for short

shipment. Explanations concerning rearranged

carriage plans are not accepted. When the

‘missing’ cargo does arrive, however, another fine

may result if it does not appear on the second

manifest. ■

Prevent drug smuggling!

■ ■ A ship insured with The Swedish Club was

recently boarded and searched by customs and

police in Rotterdam. 100 kilos of cocaine and 300

kilos of marijuana were found in a space between

the rudder and the rudder shaft. The ship had

loaded a cargo in Jamaica and the conclusion

drawn by the investigation was that divers had

placed the parcels there. Members of the crew

were taken ashore in Rotterdam for interrogation

but were later released, since it was obvious that

interests not related to the ship had placed the

drugs on board.

It is not uncommon that crew members are

persuaded by drug dealers to hide drugs on

board the ship. If customs authorities find drugs

on board, the ship can be exposed to heavy fines

and sanctions. Members are therefore recom-

mended to take steps to prevent drug smuggling

on board their ships. For ships trading in high-

risk areas such as Colombia and other South

American countries, it is recommended that Anti-

drug smuggling co-operation agreements are

signed.More information about these agreements and

other useful information on this subject can be

obtained through BIMCO at www.bimco.org in

the Members’ area. BIMCO can also be contac-

ted by e-mail [email protected] or telephone

+45 44 36 68 00. ■

Oil Pollution– CLC/Fund Conventions

■ ■ At its meeting in October 2000, the IMO

Legal Committee decided that the levels of com-

pensation in the CLC and Fund conventions

should be raised in accordance with the formula

stipulated in the conventions. The result is that

the levels will increase by approximately 50 per

cent and the maximum total amount payable

under the conventions will be USD 260 million.

The new levels will most likely enter into force in

November 2003.

A working group within the IOPC Fund is

currently reviewing the conventions in an effort to

improve the system. Several issues are being

discussed such as levels of compensation, ran-

king of claims, uniform application of the con-

ventions and environmental damage. ■

Be accurate when declaring

stores and bunkers in

Argentina!■ ■ In Argentina a number of incidents have

taken place due to inaccurate or non- declaration

of bunkers and lube oil to the customs authoriti-

es upon arrival.

When calling ports in Argentina the quantity of

bunkers on board has to be properly and accura-

tely declared in the vessel’s Store List, together

with all other items that are regularly declared.

Failure to declare bunkers or lub oil constitutes a

violation of the Argentinean Customs Code. The

sanctions will be either:

- a fine of one to five times the duty that would

have been applied if the oil were instead impor-

ted to Argentina, or,

- a fine of twice the market value of the bunker

or lub oil. In other cases of alleged smuggling the

merchandise would be seized and the fine equi-

valent to the market value, but due to the pro-

blems to seize bunkers, this formula is applied.

Our recommendation is that vessels calling

ports in Argentina ensure that the Store List

presented to the customs authorities properly

and accurately reflects all the stores, bunkers and

merchandise on the vessel and that a copy of the

list is kept on board. ■

NewsTHE SWEDISH CLUB LETTER 1/2001

4

THE SWEDISH CLUB LETTER 1–2001Bridge Resource Management / News from Piraeus

■ ■ Automation Awareness is the subject of thelatest addition to the SAS-BRM Course. This14th course module addresses the various conse-quences of an increasingly automated environ-ment on board vessels. Automation Awarenessis both about identifying the advantages anddisadvantages of automated systems, and alsoabout stating different levels of automation andits characteristics. Automation Awareness prov-ides the students with important guidelines forlearning how to work in an automated environ-ment, avoiding possible dangers and acknow-ledging the advantages.

The increase of automation on board vessels,that is following an overall technical develop-ment of industries and societies all over theworld, naturally has both positive and less posi-tive consequences. The automated systemsthemselves usually constitute no danger. It is inthe interaction between the human elementand the automation that both advantages andpossible dangers lie. This often relates to hu-man attitudes towards automation and its roleon board vessels. The ideal is neither to be over-ly reliant on the automated system nor overlysuspicious. Education and training are goodways of finding a relevant balance between thetwo extremes. Through the Automation Aware-ness module, the SAS-BRM Course aims at gi-

Training Centres currently licensed byThe Swedish Club to conduct the SAS-BRM Course

◆ The Swedish Club Training Centre, Greece

◆ Wallem Maritime Training Centre, India

◆ Anglo-Eastern Maritime Training Centre, India

◆ PHILCAMSAT, The Philippines

In an automated environment the human element should never be completely out of the loop ofinformation.

ral differences between automation and humansas far as suitability is concerned. Humans are,for example, generally not suited to handlingthe same large amount of data with either thesame persistence or accuracy as automated sys-tems. Automated systems, on the other hand,unlike humans, are not suited to anticipatingevents or improvising appropriate actions andact only on the programmed input.

As the technical development of automatedsystems is an ongoing, continuous process, weshould avoid ever considering ourselves fullyeducated in this area. In order to continue tostrive towards making the automation as ideal acomplement to the human element as possible,we must take part in continuous learning aboutthe automated systems in our surroundings andalways be aware of how they affect the environ-ment in which we operate.

ving the students the ability to improve theiruse of automation and control automated sys-tems more effectively, by first helping them tostate both automation characteristics and dan-gers. This is useful knowledge, for example inregard to adjusting the workload. Automationaffects the workload on the ship differently ac-cording to the situation. In normal modes, wor-kload decreases as automation increases frommanual to a fully automated navigation and ste-

ering system, but in abnormal modeswith a high level of automation, worklo-ad can be very high as reconfigurationand changes of mode are carried out inan unplanned situation.

Today, automated systems can beconsidered to be ‘team members’ speci-ally adapted for certain tasks. It is there-fore important to be aware of some gene-

Automation Awareness – latest SAS-BRM news

Newsfrom

Piraeus

Looking ahead with confidence■ ■ A sign can be many things, and this sign is somethingspecial. Last week new road signs were put up showing theroute to the new airport Elefterios Venezelos. The latestnews is that the inauguration is going to be on March 28th

2001.Another good sign is that our new staff surveyor, Stelios Mag-kanaris, joined us in early January from a Greek shippingcompany where he worked as a superintendent engineer.Having two surveyors in our Piraeus office will give us muchmore flexibility when providing technical assistance to ourmembers in the region and other members’ vessels in theMediterranean Sea and the Middle East.A third good sign is that 2001 is the year when the Greekshipowners start taking delivery of their newbuildings. The

types of vessels are mainly bulk carriers ranging from handy-size to panamaxes, but there are also container vessels andtankers to be delivered.The fourth sign is that at the P&I renewal this year, ratherthan the fixed premium facilities, owners were seeking homesfor their P&I covers among the mutual group clubs, whichshows that the product and service we offer is superior.The Hull & Machinery insurance market is confirmed harde-ning, and we are looking ahead with confidence.

Clas RydénGENERAL MANAGER

The Swedish Club Greece

Anna-Karin LönnstadLOSS PREVENTION ASSISTANT


21


The Archive is a Window on the PastClub Information

■ ■ A display of historic documents from the Club’s Archive wasestablished at the Göteborg office late last year. The Archive is re-markable, in that it is almost complete and reaches back to the dateof foundation in 1872.

Eva Persson, the Club’s Archivist, is responsible for files and led-gers that, from end-to-end, would stretch for 1.4 km. While therewas plenty of choice for this first display from the Club’s early re-cords, Eva had no difficulty in selecting the case of the appropriatelynamed SAGA.

She explains: “In 1909, the SAGA was on a voyage from the northof Sweden to France when she collided with a Russian vessel. TheSAGA was built in 1883 and, at 2,850 tonnes, was a substantial vesselfor that time. The collision, however, resulted in severe damage. Thevessel sank but there was enough time for the Russian ship to rescuethe crew – although a stoker was trapped and went down with theship. An inquiry placed the blame squarely on the Russian vessel andthe claim for the loss of the SAGA amounted to SEK 108,000, a veryconsiderable sum in 1909!”

The Archive display includes a variety of documents relating tothe loss of the SAGA. The claimrecords the loss of the ‘besthats’ owned by the femalecook. Other papers, concer-ning the ship’s stores, revealthat the crew werewell fed and free ofthe curse of today’shighly processedfoods.

Close to theArchive display is afine ship model ofthe ORVAR ODD a wooden steamship built in the Göteborg areaand the first vessel to be entered with The Swedish Club in 1872.

Eva Persson became the Club’s Archivist during the 1980s. Therecords held in the Club’s office span a 10-year period. Records arethen transferred to the Archive, housed in a building in the Göte-borg area which serves as the Regional Archive for Western Sweden.

Eva says: “Although 130 years is not a long time in historicalterms, the Club’s early Archive can transport you to a completelydifferent world. For example, the Swedish language has undergonedramatic change over the past century and it is interesting to beconfronted with everyday language which was then much closer toits Germanic roots.

“There are also some interesting social insights. It is apparent that,even in the early decadesof the 20th Century, Stateresponsibility for the wel-fare of the disadvantagedwas rudimentary, to saythe least. In Sweden, manycompanies had a traditionof providing support forlocal communities. Theconcept of ‘corporateresponsibility’ is not new!The Swedish Club playedits part and the recordsnote the Christmas giftsand financial help offeredto those in need in theGöteborg area.” ■

Frans Malmros, Eva Persson and Bengt Pettersson admiring the ship model ofORVAR ODD.

■ THE SHIP MODEL of ORVAR ODD was made by Bengt PetterssonBengt PetterssonBengt PetterssonBengt PetterssonBengt Pettersson, whobuilt his first ship model when he was only 14 years old. Bengt once wantedto be sailor but since the Second World War was raging at the time, he startedto work as a station master for the railway instead. When he was about 50years old he decided it was time to start a new profession in the shippingworld. For 13 years he worked for Göteborg Maritime Museum, where hedevoted his time to repairing old ship models.

Eva Persson, The Swedish Club´s Archivist.

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The archive display.

Orvar Odd.

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3

THE SWEDISH CLUB LETTER 1–2001Leading Article

Frans MalmrosMANAGING DIRECTOR

Stability and ReliabilityReinsurance majors have spearheaded the transformation inthe marine insurance market seen in recent months. The

market has taken on a different character as rates continue

to harden. The reinsurers sought (and, in most cases, secu-red) substantial increases. The commercial players have

seen the door slam on cheap reinsurance. They are now for-

ced to shoulder a larger share of risk and accept higherreinsurance rates. This is fuelling the increase in direct insu-

rance costs.

Changes in the market have been building for 18 monthsor more, but the upward pressure on rates accelerated in the

final weeks of 2000. The players facing the greatest chal-

lenge are those who lack flexibility. They are locked intoloss-making, multi-year deals and have limited ability to

respond to changing market conditions.

Reinsurers now behave with caution, seeking confirma-tion that underwriters are prepared to press for appropriate

increases in rates. One interesting phenomenon is the sud-

den resurgence of interest in claims records. This is a positi-ve development for us and our membership occupying the

high quality tier of the market.

The poor performers, in contrast, will suffer most in a ri-sing market. Premium increases have been sought and, in

many cases, obtained. The general trend looks moderate by

comparison. Reinsurance placement increases on the Lon-don market were in the 10-15 per cent range and whole

account placements rose by 25-30 per cent. Further in-

creases are in the pipeline as the commercial sector strugg-les to regain profitable ground.

The past 12 months have seen continued concentration in

the commercial market and there have been some dramaticdepartures of high-profile individuals. Consolidation conti-

nues at Lloyd’s and only a handful of reinsurers remain

(there were around 50 just five years ago!). Lloyd’s syndica-tes now total 108, as against 123 in 2000. Some surviving

syndicates lack direct relevance as they have left the marine

sector to prospect in more profitable areas. Reduced capaci-ty will add to the upward pressure on rates.

During 2000, Lloyd’s continued its development as a

commodity market (the commodity being capital). Lloyd’s

capacity reached the record level at £11.06 billion – up by

£1 billion on last year thanks to the influx of capital fromlimited liability corporates. Corporate members increased

in number during 2000, from 853 to 894, while individuals

and private capital provision continued to decline.In an increasingly volatile insurance environment, we offer

stability within a mutual framework insulated from turbu-

lence in the wider market. It is clear that the general trendof increasing rates will continue throughout 2001. There

are important differences in the response of the Club and

the commercial providers. We refused to follow the hullmarket into the abyss. Looking ahead, we shall continue to

find our own path. We shall act in the best interests of

members and deliver competitive advantage in a rising mar-ket. We have made a good start by ensuring that our mem-

bers continue to benefit from the Club’s close relationships

with leading reinsurers.

22

THE SWEDISH CLUB LETTER 1–2001Club Information

The Swedish ClubAcademy■ ■ The Swedish Club Academy offers a fiveday Marine Insurance Course in May 2001.The course will take place in the Club’s headoffice in Göteborg and is open for members(free of charge) as well as non-members (USD500).

The course covers important aspects of ma-rine insurance, ranging from terms and con-ditions to the practical handling of claimsand loss prevention. The focus will be onHull & Machinery, Protection & Indemnityand Freight Demurrage & Defence insurance.The lecturers, all employees of the Club, willcontribute with their expertise and expe-rience.

This course provides an excellent oppor-tunity for people working for shipowners,ship managers, marine insurance brokers andClub correspondents to improve their know-ledge in marine insurance and learn moreabout The Swedish Club. ■

For more information about this course pleasevisit our website: www.swedishclub.com

Visit of the World Maritime University

Club Evenings in Stockholm and Göteborg

■ ■ During our recent Club Evenings in Göteborg and Stockholm, Commo-dore Thomas Fagö with the Swedish Coast Guard Response Department spokeabout the Coast Guards co-operation with agencies in other countries andtheir efforts to put a halt to pollution in the Baltic. ■

Guests at thegathering during theClub Evening inGöteborg.

Interested audience at the Club Evening in Stockholm.

■ ■ The Shipping Management students of the IMO World Maritime University inMalmö visited the Club in November last year for a half-day seminar. The group repre-sented not less than 14 different nations. We at the Club really enjoyed the opportunityto meet with all of them and to discuss questions concerning salvage, collision, cargoclaims, pollution and much more.

■

Commodore Thomas Fagö.

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Leading Article 3 Stability and Reliability

Bridge ResourceManagement 4 Automation Awareness – latest SAS-BRM news

News from Piraeus 4 Looking ahead with confidence

Technical 5 Mandatory carriage of the Black Box

6 Does IT work? Members expect new software to improve claims handling and safety

News from Hong Kong 6 Continued growth in Asia in all segments

Technical 7 Over-Pressurisation – It pays to be proactive

News from Tokyo 7 All-in-one policy in Japan

Stowaways 7 Stowaways in Abidjan

Technical 8-13 This is AIS

Personal Injury 14 Less Claims with comprehensive Pre-EngagementMedical Examinations

15 Pre-existing illness

News from London 19 New office in 100 Fenchurch

FD&D 16 The Hill Harmony Case17 Shipbuilding contracts – Points to note18 The Happy Day case

Hull & Machinery 18-19 The Merits of In-House Adjusting19 AV 2000: A popular choice amongst members

News 20 New ballast water requirements in Australia / More turbulence on thecommercial market / Under-insured tankers and gaps in cover / Syria offerscustoms settlements at reduced rate / Prevent drug smuggling! / Oil Pollution– CLC/Fund Conventions / Be accurate when declaring stores and bunkers inArgentina!

Club Information 21 The Archive is a Window on the Past

22 Seminars

23 Staff News / Club Diary / Public Holidays

Internet 23 What’s New?

No. 1 – 2001April - June

The Swedish Club Letter is published three times a year and distributed free of charge to vessels insured with us and to our members.The Swedish Club Letter is an editorially independent newsletter and opinions expressed by external contributors are not necessarilythose of The Swedish Club. Furthermore, the Club does not accept responsibility for errors or omissions or their consequences.

Readers’ comments and views are welcome by phone, fax or mail.

Editorial Advisory Board: Martin Hernqvist, Peter Johansson, Örjan Karlsson,Anders Leissner, Claes Lindh, Petra Setterberg, Helena Wallerius Dahlsten.

Production co-ordinator: Susanne Blomstrand.

PR-consultant: TRS Public Relations Ltd.

Layout: Eliasson Information, Göteborg.

Printed in Sweden by PR Offset, Mölndal.

The Swedish Club is a mutual marine insurance company – owned and controlled by its members. The Club writes Hull & Machinery, War risks,Protection & Indemnity, Loss of Hire, Freight Demurrage & Defence insurance and any additional insurance required by shipowners.

©The Swedish Club. Articles or extracts may be quoted provided that The Swedish Club is credited as the source.

The Swedish Club,

P.O. Box 171,

SE-401 22 Göteborg, Sweden.

Tel +46 31 638 400,

Fax +46 31 156 711.

E-mail: [email protected]

www.swedishclub.com

23


HOLIDAYS

when The Swedish Club offices are closedIn case of emergency please call the following numbers.

HEAD OFFICE April 13th Good FridaySWEDEN April 15th Easter DayEmergency tel April 16th Easter Monday+46 31 151 328 May 1st Labour Day

May 24th Ascension DayJune 3rd Whit SundayJune 4th Whit MondayJune 22nd Midsummer EveJune 23rd Midsummer Day

GREECE April 13th Orthodox EasterEmergency tel April 14th Orthodox Easter+30 944 530 856 April 15th Orthodox Easter

April 16th Orthodox EasterMay 1st Labour Day

HONG KONG April 5th Ching Ming FestivalEmergency tel April 13th Good Friday+852 2598 6464 April 14th The day after Good Friday

April 16th Easter HolidayApril 30th The Buddha’s BirthdayMay 1st Labour DayJune 25th Tuen Ng Festival

JAPAN April 29th Green Day24 hour tel April 30th Green Day+81 3 5442 5466 May 3rd Constitution Day

May 4th National HolidayMay 5th Children’s Day

UNITED KINGDOM April 13th Good FridayEmergency tel April 15th Easter Day+44 20 7397 4999 April 16th Easter Monday

Past and Future Events

June 7th 2001AGM in Göteborg

March 6th 2001Club Evening for membersand associates in Göteborg

March 8th 2001Club Evening for membersand associates in Stockholm

March 27th 2001Reception for membersand associates in Shanghai

March 28th 2001Board Meeting in Shanghai

March 29th 2001Reception for membersand associates in Hong Kong

May 8th 2001Club Evening for membersand associates in Hamburg

May 14th-18th 2001Marine Insurance Coursein Göteborg

June 6th 2001Board Meeting in Göteborg

Club Information

Stelios MagkanarisStelios MagkanarisStelios MagkanarisStelios MagkanarisStelios Magkanaris, joined ourteam inPiraeus asstaff survey-or on Janua-ry 8th 2001.He joinsfrom Costa-mare Ship-ping Compa-ny S.A and holds a B.Sc de-gree in Mechanical Enginee-ring from University of Sur-rey, a M.Sc degree in Marinetechnology from NewcastleUniversity and a Third Mari-ne Engineer’s Diploma.

Ken LittlejohnKen LittlejohnKen LittlejohnKen LittlejohnKen Littlejohn, joined ourLondon office on March 5th

2001 asClaimsExecutivedealingmainly withFD&Dmatters.Ken movesacross theThames after three years atthe Britannia Club, where heheld the position of ClaimsManager. A native of Scot-land, Ken holds a Bachelor ofLaws (LLB) degree from Aber-deen University, a Masters inInternational Trade Law(LLM) degree from NewcastleUniversity and has previouslyworked as an internationalfreight forwarder.

Jonas LyborgJonas LyborgJonas LyborgJonas LyborgJonas Lyborg, has resignedfrom the Club after ten yearsas a staff surveyor in the LossPrevention & Technical De-partment. Jonas is now pursu-ing his own business career inUSA and we wish him allsuccess.

Marcus SiljöMarcus SiljöMarcus SiljöMarcus SiljöMarcus Siljö, has resignedfrom the Club as an assistantunderwriter after three yearsof dedicated service in theUnderwriting & MarketingDepartment. We wish him allsuccess in his future career.

CLUB DIARY

STAFF NEWS

March saw the launch of Swedish Club OnLine (SCOL), a new online service formembers which provides direct access to claims data spanning a five-year period.

SCOL-registered members now have password-controlled access to claims recordsand summaries of current claims status. Information is also available to brokers, whocan obtain data on specific ships following authorisation by the member concerned.

This online service is the first step in the construction of an integrated businesssystem linking the Club with its members. The service already has extensive ‘drill-down’ capabilities, which allow the member to review claims trends by fleet, vesseltype and vessel on a year-by-year basis, then explore specific claims at a deeper level.

The next step will add a range of loss evaluation tools to SCOL. The ‘benchmar-king modules’, for example, are designed to allow the member to interrogate thedatabase for information on claims trends and outcomes for incidents ranging frompersonal injuries to main engine failures. Users can obtain a full picture of claimstrends and developments, both within the context of the individual fleet and acrossmuch larger ship populations. In this way, every member now has the opportunity togain direct access to the Club’s collective claims experience.

Register now as a SCOL user! For more information and to register please visitwww.swedishclub.com/scol or e-mail [email protected].

THE SWEDISH CLUB LETTERTHE SWEDISH CLUB LETTER

page 14-15

page 8-13

LESS CLAIMS with comprehensive Pre-Engagement Medical Examinations

THISIS

AIS

NO. 1 – 2001APRIL - JUNE

It all started withORVAR ODD

page 21

Meet our In-HouseADJUSTING TEAM

page 18-19

The Swedish Club Offices

HEAD OFFICE SWEDEN

Gullbergs Strandgata 6, P.O. Box 171SE-401 22 Göteborg, SwedenTel +46 31 638 400, Fax +46 31 156 711E-mail [email protected] tel +46 31 151 328

GREECE

5-7, Agiou NicolaouGR-185 37 Piraeus, GreeceTel +30 1 452 2397, Fax +30 1 452 5957E-mail [email protected] tel +30 944 530 856

HONG KONG

Suite 6306, Central Plaza18 Harbour Road, Wanchai, Hong KongTel +852 2598 6238, Fax +852 2845 9203E-mail [email protected] tel +852 2598 6464

JAPAN

Suzuyo Hamamatsucho Building 5F.2-1-16 Kaigan, Minato-Ku, Tokyo 105-0022, JapanTel +81 3 5442 5466 (24 hour tel), Fax +81 3 5442 5922E-mail [email protected]

UNITED KINGDOM

100 Fenchurch StreetLondon EC3M 5JD, United KingdomTel +44 20 7397 4950, Fax +44 20 7397 4951E-mail [email protected] tel +44 20 7397 4999

INTERNET www.swedishclub.com

LUB ETTER - Swedish ClubProtection & Indemnity, Loss of Hire, Freight Demurrage & Defence insurance...

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