Maritime & Commercial on i-lawAugust 2017 highlights – the best of i-law.com

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ContentsWritten by experts in shipping, trade, contracts and commercial law, Maritime & Commercial on i-law.com contains an unrivalled collection of news, commentary and international and English law case reports, in a vast archive dating back to 1919.

This booklet of extracts combines recent articles from Lloyd’s Law Reports and Lloyd’s Maritime and Commercial Law Quarterly, as well as our news and analysis sources on i-law.com, to provide a round-up of our must-see content from August 2017.

3 Glencore International AG v MSC Mediterranean Shipping Co SACarriage of goods by sea – Bill of lading providing for bill to be surrendered in exchange for the goods or a “Delivery Order” – Carrier providing shipper’s agents with “Release Note” containing PIN code – Whether “Release Note” was a “Delivery Order” – Goods misappropriated – Whether carrier in breach of contract.Lloyd’s Law Reports Plus, [2017] Lloyd’s Rep Plus 65

Ongoing appeals and upcoming judgments With courts breaking for vacation after the Trinity term, here is an update on some of the appeals to be heard in 2017 and 2018.Shipping & Trade Law, (2017) 17 STL 6 3

4 Brexit, international jurisdiction and the space between adjudication and execution: a corridor of uncertainty?The future role in English private international law for the European rules of jurisdiction and recognition/enforcement of judgments in civil and commercial matters is currently up for debate. This article assesses the operation of those European rules in the post-adjudication phase of commercial disputes.Lloyd’s Maritime and Commercial Law Quarterly, [2017] LMCLQ 448

Forum – back on the shopping list for collisions Those of a certain age will remember the heady days of seeking to establish jurisdiction to take advantage of a favourable limitation convention. In one case those steps even went to the extent of pinning a writ (as they then were) to the mast of a sunken vessel to effect service.Maritime Risk International, (2017) 31 MRI 6 16

5 Eleni Maritime Ltd v Heung-A Shipping Co Ltd and OthersLimitation of liability – Court granting limitation decree and specifying time limit for filing of claims – Plaintiff constituting limitation fund – Claimants seeking to make claims after expiry of court-imposed time limit but within statutory two-year time limit for enforcing claim or lien against vessel – Whether claims time-barred – Whether claimants entitled to extension of time.Lloyd’s Law Reports Plus, [2017] Lloyd’s Rep Plus 68

London Arbitration 21/17 Charterparty – Redelivery – Damages – Vessel redelivered early – Whether charterers renounced charterparty – Measure of damages for early redelivery.Lloyd’s Maritime Law Newsletter, (2017) 984 LMLN 4

The usual course of events was that shortly before a vessel arrived at Antwerp, MSC would send Glencore’s agents at the port and the notify party, C Steinweg NV (Steinweg), an “Arrival Notice” which gave her ETA, and included a note that “containers will only be released against pincode”. After the bill was presented and freight and charges were paid, MSC would send Steinweg an electronic document headed

“Release Note”, which gave a PIN code for release of the goods. In the present case, MSC’s local agents emailed to Steinweg a Release Note for the three containers, giving for each of them an ERS PIN code.

This is an extract of the original Report headnote. To access the full headnote and Report, please visit Lloyd’s Law Reports Plus on www.i-law.com.

Glencore International AG v MSC Mediterranean Shipping Co SA

[2017] EWCA Civ 365, Lewison and Henderson LJJ and Sir Christopher Clarke

Carriage of goods by sea – Bill of lading providing for bill to be surrendered in exchange for the goods or a “Delivery Order” – Carrier providing shipper’s agents with “Release Note” containing PIN code – Whether “Release Note” was a “Delivery Order” – Goods misappropriated – Whether carrier in breach of contract.

Between January 2011 and June 2012 the claimant (Glencore) made 69 shipments of drums of cobalt briquettes which were carried by the defendant (MSC) to Antwerp. The present case concerns the 70th shipment, which was of a cargo of three such containers. After the cargo was discharged at Antwerp two of the three containers were misappropriated. All 69 shipments were made under bills of lading the terms of which were similar.

Glencore claimed damages against MSC for breach of contract, bailment and conversion. The relevant bill of lading was a negotiable bill marked “To order” and which provided:

“If this is a negotiable (To order/of) Bill of Lading, one original Bill of Lading, duly endorsed must be surrendered by the Merchant to the Carrier (together with outstanding freight) in exchange for the Goods or a Delivery Order”.

When the cargo arrived at Antwerp it was handled under an electronic release system (ERS) used for containerised cargo. Under the ERS carriers did not issue paper delivery orders or release notes against bills of lading, but instead provided computer-generated electronic numbers (PIN codes) which holders of bills presented to the terminal and so took delivery of their goods.

Lloyd’s Law Reports Plus, [2017] Lloyd’s Rep Plus 65

Lloyd’s Law Reports Plus

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Ongoing appeals and upcoming judgments With courts breaking for vacation after the Trinity term, here is an update on some of the appeals to be heard in 2017 and 2018.

First, Kairos Shipping Ltd and Another v Enka & Co LLC and Others, the marine insurance case concerning the scuttling of a vessel, is awaiting a decision from the Court of Appeal on an application for permission to appeal. It is hoped that permission is granted – while the first instance decision was heavily dominated by the evaluation of large amounts of evidence of fraud, issues of burden and standard of proof, the test as to which was adopted pro forma by the judge could fall to be considered by the appeals court.

Permission to appeal has also been sought in Gard Shipping AS v Clearlake Shipping Pte Ltd (The Zaliv Baikal) [2017] 2 Lloyd’s Rep 38. In this case, notice of readiness to discharge had been given by the vessel at Rotterdam. Charterers gave no discharge instructions for a very long period, causing a substantial delay in berthing and discharging the cargo. Essentially, the charterers were using the vessel as floating storage rather than discharge. Owners considered that in the circumstances they ought to be entitled to the escalated demurrage rates foreseen by the charterparty where the vessel had been ordered to stop and wait – except that there had not been any such order from charterers, only silence. Where the contract provided for several different demurrage schemes, the judge took the view that the trigger for each must be identified and compared to the actual orders given. The ordinary loadport/disport demurrage regime applied.

This is an extract of an article first published in Shipping & Trade Law, (2017) 17 STL 6 3. For the full article, visit www.shippingandtradelaw.com and www.i-law.com.

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Brexit, international jurisdiction and the space between adjudication and execution: a corridor of uncertainty?The future role in English private international law for the European rules of jurisdiction and recognition/enforcement of judgments in civil and commercial matters is currently up for debate. This article assesses the operation of those European rules in the post-adjudication phase of commercial disputes. In particular, it examines how the Brussels I Regulation (Regulation (EU) 1215/2012) might affect: the grant by the English court of orders in aid of enforcement of its own judgments; and the recognition in other Member States of orders made by the English court in aid of enforcement of arbitral awards. Identifying these issues is a step towards improvement of English private international law, writes James Woolrich.

One of the current hot topics for discussion, among lawyers and Parliamentary Committees at least, is this: what will replace the European rules concerning jurisdiction and recognition and enforcement of judgments in civil and commercial matters (referred to herein as “the European Rules”) following the exit of the United Kingdom from the European Union and the consequent repeal of the European Communities Act 1972?

It is an important question because, at present, those European Rules form an integral part of English private international law. Answers are beginning to emerge. There are essentially two options: either the UK could ratify, reanimate or revise one of the existing European treaties/statutes (Option 1); or it could fall back—more or less comfortably, depending on one’s point of view—on its common law (and civil procedure) rules, currently applicable in areas where the European Rules are not (Option 2). However, since each option raises difficult (and currently unresolved) legal and practical issues, there is no consensus on which one should be taken.

An assessment of the European Rules is therefore timely. This article

seeks to make a small contribution to what is a substantial task by focusing on how the Brussels I Regulation (“the Regulation”) operates in the post-adjudication (ie, post-judgment) phase of commercial disputes. It discusses two central examples: how the Regulation affects, first, the grant by the English court of orders in aid of enforcement of its own judgments and, secondly, the recognition in

other Member States of orders granted by the English court in aid of enforcement of arbitral awards. Thus, the article considers how rules of international jurisdiction interact with national law powers.

This is an extract of the original article. To access the full analysis, please visit Lloyd’s Maritime and Commercial Law Quarterly at www.i-law.com.

Lloyd’s Maritime and Commercial Law Quarterly, [2017] LMCLQ 448

Lloyd’s Maritime and Commercial Law Quarterly

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Forum – back on the shopping list for collisionsThose of a certain age will remember the heady days of seeking to establish jurisdiction to take advantage of a favourable limitation convention. In one case those steps even went to the extent of pinning a writ (as they then were) to the mast of a sunken vessel to effect service (The Ming Galaxy).

Advantage was sought where there were possible competing jurisdictions and those jurisdictions applied different limitation regimes. At the time the main competition was between the 1957 Convention and the 1976 Convention. The 1957 limit was considerably lower than the equivalent 1976 limit and was thus attractive in certain situations.

Initially many claims were below the 1976 Convention limit but the 1957 limit, which led to the chase to secure a favourable jurisdiction to hear the case. When inflation kicked in globally and, as vessels grew larger, so too did the liabilities of vessel owners. Gradually the 1976 limits became out of sync with the world economy and so the 1996 Protocol was introduced and adopted. This had the dual effect of increasing the limit but also allowing further increases without the requirement at the IMO of an entirely new convention. State parties could now choose between the 1957 Convention, the 1976 Convention or the 1996 Protocol.

This is an extract of an article first published in Maritime Risk International, (2017) 31 MRI 6 16. For the full article, visit www.maritime-risk-intl.com and www.i-law.com.

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Eleni Maritime Ltd v Heung-A Shipping Co Ltd and Others

On 7 November 2013 a collision occurred between the vessel Eleni owned by Eleni Maritime Ltd and the vessel Heung-A Dragon owned by Heung-A Shipping Co Ltd off Phu My in Vietnam. In respect of the sinking of Heung-A Dragon Eleni Maritime admitted liability. Attribution of blame for the collision was agreed at 70:30. Eleni Maritime then initiated a limitation action against Heung-A Shipping and three other potential claimants (the first to fourth defendants) under Order 75 of the Rules of the High Court seeking to limit its liability.

On 14 May 2014 Ng J granted a limitation decree (the decree), which provided, inter alia, that claims against Eleni Maritime should be filed within a period of six months and 14 days from the date of the decree, and that Eleni Maritime should publish a notice specifying the particulars of the decree in Lloyd’s List, South China Morning Post and the Hong Kong Standard. The date for filing of claims under the decree was subsequently extended to 28 January 2015. On 21 May 2014 Eleni Maritime constituted the limitation fund (the fund) by making payment into court.

Section 7(1) of Merchant Shipping (Collision Damage Liability and Salvage) Ordinance, Cap 508 (the

Ordinance) provided: “Subject to subsection (3), no action shall be maintainable to enforce any claim or lien against a vessel or its owners in respect of any damage or loss ... unless proceedings in the action are commenced within 2 years from the date when the damage, loss or injury was caused.”

In mid-2015 solicitors for the second to fourth defendants received instructions from some 22 additional

claimants in respect of further claims against Eleni Maritime. The additional claimants and their insurers were based outside Hong Kong. One insurer was in the People’s Republic of China (PRC) and two others were in Vietnam.

This is an extract of the original Report headnote. To access the full headnote and Report, please visit Lloyd’s Law Reports Plus on www.i-law.com.

London Arbitration 21/17Charterparty – Redelivery – Damages – Vessel redelivered early – Whether charterers renounced charterparty – Measure of damages for early redelivery.

On 8 August 2015 the subject vessel was chartered on an amended Shelltime 4 charter for a period of 12 months with an option for a further 12 months plus or minus 30 days. The hire was US$70,000 per day. The charterers said that the going rate of hire for voyages from the Arabian Gulf to China at the time of the charter was between US$45,000 and US$50,000 per day and that the agreed rate was significantly above the going rate. They were prepared to pay the higher rate because, at the time, there was limited vessel availability and they relied on western sanctions against Iran continuing, keeping freight rates high.

After the charter had been agreed it was announced that sanctions on Iran were to be lifted. Thereupon, freight rates started to collapse. The vessel was delivered into the charterers’ service on 26 October 2015, about eight days after the announcement that sanctions were to be lifted. The charterers accepted delivery of the vessel, hoping to secure flexibility from the owners over sums due under the charter. In the event, the charterers were only able to complete one Arabian Gulf/China voyage. They were unable to find profitable employment for the vessel.

This is an extract of an article first published in Lloyd’s Maritime Law Newsletter, (2017) 984 LMLN 4. For the full article, and for more London Arbitrations exclusive to LMLN, visit www.lmln.com and www.i-law.com.

[2017] HKCFI 795, Hong Kong Court of First Instance, Deputy High Court Judge Anthony To

Limitation of liability – Court granting limitation decree and specifying time limit for filing of claims – Plaintiff constituting limitation fund – Claimants seeking to make claims after expiry of court-imposed time limit but within statutory two-year time limit for enforcing claim or lien against vessel – Whether claims time-barred – Whether claimants entitled to extension of time – Merchant Shipping (Collision Damage Liability and Salvage) Ordinance, Cap 508 – Rules of High Court, Order 75.

Lloyd’s Law Reports Plus, [2017] Lloyd’s Rep Plus 68

Lloyd’s Law Reports Plus

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