The Collision Regulations are the 'rules of the road' for mariners navigating vessels worldwide. However, it has been nearly 50 years since a case involving their interpretation has reached the jurisdiction's highest court. This changed recently when the Supreme Court handed down a judgment which considered the matter. The judgment provides clear and understandable guidance to mariners which will be of use to them when waiting outside the entrance to narrow channels in locations globally.
The COVID-19 pandemic has had a profound impact on the shipping industry and led to many disputes. However, owing to the prevalence of arbitration in resolving shipping disputes, and the time taken for cases to progress through the courts, there have been few reported cases detailing the pandemic's impact on the industry. The Admiralty Court recently handed down one of the first judgments dealing with this matter.
The limitation fund established following the grounding of the Full City near Langesund in 2009 was recently distributed. The limitation fund proceedings, which ran parallel to the proceedings concerning the limitation fund established following the Server casualty in 2007, have helped to clarify several procedural aspects of limitation funds. This article examines the key takeaways from the limitation fund proceedings now that they have come to an end.
The regulatory framework that exists within the shipping and offshore industries is long established. The general principle is that maritime assets above a certain size must be registered in a national ship registry, and vessel registration plays an important role in the financing of maritime and offshore assets. While the existing framework effectively extends to the offshore floating wind sector in Norway, the same cannot be said for deep-water fish farms.
In a recent administrative appeal decision, the Norwegian Coastal Administration (NCA) Head Office reversed the wreck removal order issued by the NCA Emergency Response Centre in respect of a cargo ship which sank in northern Norway in 2017. The decision confirms that the pollution authorities will consider the proportionality of the measures ordered when exercising their administrative discretion.
The Commercial Court recently provided guidance on the interpretation of consent provisions in a transport and processing agreement where such consent was not to be "unreasonably withheld". The issue of withholding consent arises regularly under long and short-term shipping charterparties. A key takeaway from this judgment is that to establish whether consent may be withheld, the parties' bargain as a whole must be considered and not the consent provision in isolation.
The 75th session of the International Maritime Organisation Marine Environment Protection Committee recently approved a ban on the use and carriage of so-called 'heavy fuel oil' in the Arctic. The proposed amendments are expected to be formally adopted in June 2021. However, more stringent standards have already been proposed by the Norwegian government for the area surrounding Svalbard.
The Supreme Court recently examined the requirement that an arbitrator must disclose related or linked appointments, which is a long-running debate, particularly in specialist fields (eg, maritime disputes), where there has traditionally been a limited pool of arbitrators. This decision is likely to fundamentally change the way in which shipowners, charterers and traders proceed with arbitrators in the future.
As noted in the white paper on Norway's Arctic policy, maritime activities in the High North are expected to increase due to improved accessibility resulting from melting sea ice, the high potential for increased commercial exploitation of marine and offshore resources and the successful marketing of the Arctic as a tourist destination. With increased activities comes an increased risk of accidents, and these additional risks must be taken into account by those operating in the area.
Arbitration is the most commonly used dispute resolution mechanism in shipping and offshore contracts. However, parties often tend to spend little or no effort reflecting on the type of arbitration solution chosen (ie, ad hoc versus institutional arbitration). This article highlights the benefits of agreeing to arbitration under the rules of the Nordic Offshore and Maritime Arbitration Association versus ad hoc arbitration.
A recent Supreme Court decision examined the mandatory scope of the Insurance Contract Act and the application of the general Time Bar Act in direct actions against protection and indemnity insurers under Norwegian law. The dispute arose out of an incident that took place in China in 2007, during which capesize vessel Mineral Libin made contact with another vessel and a buoy when berthing.
Under the Maritime Code, a shipyard which constructs or repairs a ship may retain physical possession of that ship until it has been paid by the relevant shipowner. The right of retention for non-payment is one of the key weapons in the arsenal of shipyards and enables them to exert a significant amount of pressure on both shipowners and other creditors to require prompt payment as and when it is due.
Shipowners routinely give buyers in demolition sales complete freedom to deal with ships as they please following a sale, but do so at their peril. Shipowners are generators of waste under the Basel Convention and other laws and remain liable as such following a sale. Further, shipowners and those assisting them in such transactions may also incur liabilities in tort to third parties in connection with shipyard worker injuries and environmental damage occurring after a sale, as noted in a recent High Court judgment.
The Court of Appeal recently endorsed a first-instance Admiralty Court decision that a failure to properly prepare a passage plan or properly mark up navigational charts to reflect navigational dangers may amount to a failure to exercise due diligence to make the vessel seaworthy, leading to an actionable fault defence for cargo interests who had refused to contribute to the general average.
The Norwegian regulations on ship registration have been criticised for being complicated and outdated, thereby making the Norwegian ship registers unattractive compared with more flexible alternatives offered by the so-called 'flags of convenience'. In response to such criticism, Parliament recently passed a bill effecting certain amendments to the relevant legislation aimed at opening up and facilitating the parallel registration of ships (bareboat registration) both in and out of the Norwegian ship registers.
The Admiralty Court recently handed down a judgment which looked in detail at the scope and meaning of the Convention on Limitation of Liability for Maritime Claims – in particular, the meaning of the phrase "the operator of the ship" in Article 1(2). In determining the meaning of 'operator', it was also necessary for the court to examine the meaning of 'manager'. This is the first time that the English courts have been called on to consider this issue.
A recent High Court decision provides an in-depth analysis of how, if at all, the prevention principle applies to shipbuilding contracts and the importance of good contract management to notify and seek extensions for events of delay. The dispute arose in the context of 11 arbitrations between a seller and a buyer concerning a series of 14 bulk carriers which were to be designed and constructed by the seller in China.
The fast spread of COVID-19 worldwide and the actions taken by regulatory bodies have created challenges for the shipping industry in particular given its international character. Much information is available, but it is fragmented. This article set outs several issues of importance and gives basic information to help parties handle the situation at hand in the best possible manner.
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?
Project financing has historically been a popular investment scheme and source of capital in Norway for shipping projects. However, the Norwegian regulatory authorities recently published guidelines regarding the application of the alternative investment fund (AIF) regime to project finance entities. Issuers, advisers, arrangers and investors in shipping projects must be aware of the pitfalls of being captured by the wide definition of an 'AIF' and the steps that they can take in order to adapt to the regulations.