Since May 2019, six oil tankers have been attacked in the Strait of Hormuz. However, despite these attacks, vessels are still taking orders to sail through the strait, albeit with higher war risk insurance rates and, most likely, heightened crew concerns. At what point under UK law can owners refuse such voyage orders on the basis that the strait is contractually unsafe?
A recent High Court decision provided guidance on the rules of interpretation when construing guarantees that display characteristics of both on-demand and true guarantees. The case concerned a charterer guarantee, which was described as a parent company guarantee and had characteristics of both an on-demand guarantee and a true guarantee.
The Supreme Court recently clarified that when determining whether a vessel is a constructive total loss under the Institute Time Clauses Hulls conditions, regard should be had to the costs incurred prior to the owner's notice of abandonment, but not to remuneration payable under a special compensation protection and indemnity clause. The decision is a landmark decision on marine insurance because of its financial and practical implications.
The High Court recently upheld two worldwide freezing orders in a multinational shipping fraud case were upheld, rejecting the defendant's allegations of breaches of full and frank disclosure. Among other things, the judgment is a useful confirmation and strengthening of the standing of intermediary charterers to sue for the full value of the hire in circumstances where the claimant's ultimate loss may be substantially lower.
A recent High Court decision will provide comfort for vessel owners and serve as a reminder to charterers of the importance of documentary obligations within a bareboat charter. The court held that where a vessel is on bareboat charter, the obligation on charterers to keep the vessel with unexpired class certificates at all times is an absolute obligation and a condition of the contract.
In charterparties where no expected time of arrival or readiness to load at the loading port is stated, the question will be whether an equivalent can be identified which can be used as the basis for an absolute obligation requiring the owners to proceed to the loading port by a particular time. The Court of Appeal recently held that the itinerary for an intermediate voyage was such an equivalent.
A 2017 Commercial Court judgment clarifies the concept of barratry and confirms that there is no qualification to fire when seeking to rely on the fire defence under the Hague or Hague-Visby Rules (assuming that the vessel is seaworthy and that the fire was not caused by the actual fault or privity of the owner). It also confirms that, absent fire, an owner cannot escape liability for deliberate wrongful acts of the crew under the Hague or Hague-Visby Rules even if there is no actual fault or privity on its part.
The High Court recently considered the wording "exposure to sanctions" and ruled that the underwriters of a marine insurance policy could not rely on that wording to avoid a claim on the basis of a "risk of exposure" to the US-Iran sanctions. Rather, for underwriters to do so, there would need to be an actual prohibition on paying the claim in question. This latest judgment deals with a number of key points for drafting effective sanctions exclusion clauses in commercial maritime agreements.
A recent Court of Appeal decision concerned a claim by charterers against disponent owners in respect of contaminated fish oil in bulk carried on board a tanker. The owners accepted liability for the damaged cargo, but argued that they were entitled to limit their liability under Article IV(5) of the Hague Rules. However, the court confirmed that Article IV(5) does not apply to bulk and liquid cargoes; therefore, a carrier cannot limit liability for such cargoes under the Hague Rules.
In a recent case concerning the enumeration of units for the limitation of containerised cargo, the Court of Appeal was asked to determine whether the Hague-Visby Rules are compulsorily applicable if a bill of lading is not issued, what constitutes a 'unit' under the rules and what enumeration of cargo is required under Article IV.5(c) of the rules. The claim arose following damage to a cargo of frozen bluefin tuna packed into three refrigerated containers, which had occurred during carriage from Cartagena to Japan.
The Aconcagua Bay was voyage chartered for the carriage of cargo from the US Gulf. While the vessel was loading, a bridge and lock were damaged and the vessel could not leave the berth for 14 days. The owners claimed damages for detention from the charterers for the period of delay. The main issue was whether a warranty in a voyage charter that the berth is 'always accessible' means that the vessel can always enter and leave the berth.
The Court of Appeal recently provided important clarification in relation to the apportionment of liability for cargo claims as between shipowners and charterers under the Inter-club Agreement. The issue before the Court of Appeal was whether the word 'act' in the phrase 'act or neglect' in Clause 8(d) of the Inter-club Agreement means a culpable act in the sense of fault or whether it means any act, culpable or not.
In Songa Winds, the London High Court found that letters of indemnity requesting delivery without the production of bills of lading to an intermediate trader of cargo are triggered even if delivery is to the trader's buyer. The use of letters of indemnity to allow the delivery of cargo to a named party without the production of a bill of lading is relatively common, but infrequently called upon.
The English High Court recently confirmed when it will order the sale of liened cargo which is the subject of arbitration proceedings. This decision may be of interest to shipowners that are faced with a situation in which cargo belonging to a charterer remains on board a vessel for a long period without the owners receiving hire, while still incurring operating costs.
A recent Court of Appeal decision overturned the High Court judgment against the time charterers of a ship, reinstating the arbitration award in their favour. The decision has added another reason for delaying a final assessment of the loss of profit on a repudiated long-term charter by waiting to see whether the owners will sell the vessel.
The Supreme Court recently handed down its judgment in New Flamenco (Globalia Business Travel SAU of Spain v Fulton Shipping Inc). In this long-awaited decision, the court considered whether a benefit obtained by the owners relating to the sale of the vessel following the charterers' repudiatory breach of a charter should be taken into account in assessing the damages that the owners were entitled to recover.
A recent Commercial Court decision held that a charterer is 100% responsible under the Inter-Club Agreement for damage to cargo arising from an order to the vessel to delay discharge until the receivers are able to pay for the cargo. Given that it is common for shipments to be delayed, more disputes relating to deliberately delaying discharge can be expected in the future.
The Supreme Court recently handed down a judgment addressing three issues of importance to shipowners, charterers and insurers alike, defining the parameters of the safe port undertakings, the rights of subrogation of insurers where vessels are operated under bareboat charter and the right of charterers to limit their liability under the Convention on the Limitation of Liability of Shipowners.
In a recent case, the Court of Appeal decided unequivocally that missing a single instalment of hire under a time charter is not a breach of condition. In other words, there is no right to terminate for one missed instalment and claim damages for loss of bargain – usually the difference between the charter and market rate for the remainder of the charter period. The court also set out useful guidance on what constitutes 'renunciation' (anticipatory repudiatory breach) of a time charter.
Two recent London decisions involving shipping companies have highlighted problems that can be encountered when starting an arbitration. The first decision concerned an issue with identifying whether a non-signing counterparty is bound by the agreement containing the arbitration clause. The second decision concerned the question of which parties are authorised to accept service of arbitration notices.