Agenda

SHIPPING LAW INTRODUCTION

• Shipping (Dry) Law vs. Maritime (Wet) Law vs. Admiralty (Procedural) Law
• Common Law and Civil Law jurisdictions in Asia
• Maritime Conventions and the Regulation of Shipping
• Salvage, General Average and Limitation of Liability
• Does ‘International Shipping law’ actually exist?

BASICS OF ENGLISH COMMERCIAL LAW

• English common law system, its application and commercial influence.
• Contract law principles and the scope of ‘freedom of contract’.
• Tort law, the ‘duty of care’ and ‘vicarious liability’.
• Restitution and the ‘reasonable foreseeability’ test.
• Contract term exclusions and ‘Force majeure’.
• CASE STUDY: Charterparty negotiations, binding offers and binding contracts..

INCOTERMS AND INTERNATIONAL SALE AND SHIPPING CONTRACTS

• Identification of the sale and shipment parties: the seller/ shipper, the buyer/consignee, the shipper/charterer and the shipowner/carrier
• INCOTERMS and allocation of risk under CIF, CFR or FOB terms
• Use of bank issued Letters of Credit and MCP terms
• Interconnection with shipment contracts inclusive of Voyage and Time Charterparties, COA’s and Bills of Lading.
• Marine insurance aspects inclusive of Cargo, P&I and H&M insurance.

LAW AND PRACTICE OF CHARTERPARTY CONTRACTS

• Voyage and Time Charter common obligations Owners’ absolute obligation to provide a seaworthy (fit for purpose) vessel
• Voyages must be completed with ‘utmost dispatch’
• No deviation from direct route except as may be justifiable or agreed by the Liberty clause
• Charterer must nominate a safe berth (Voyage C/P) or a safe port (Time C/P)
• Shipper/Charterer undertakes not to ship dangerous goods
• Agreement to any GA adjustment at an agreed place under the York Antwerp Rules
• Incorporation and agreement of the New Jason and Both to Blame Collision clauses.
• Consequences of breach of contract or anticipatory breach
• Effect of frustration of the contract
• Choice of Jurisdiction and Law clause

CASE STUDY: Hong Kong Fir v NKK – chartered vessel’s alleged unseaworthiness & charterer’s right to withdraw from time charter.

• Voyage Charters (including GENCON C/P terms review)
• Statement of cargo type, weight and load max/min tolerance
• Freight revenue (gross or net) and whether in advance or on delivery + Deadfreight terms
• Agreement of Laytime period and Demurrage and Dispatch rates
• Date of Expected Readiness to Load and Canceling Date.
• Tender of Notice of Readiness (NOR) and terms for acceptance
• Starting the Laytime clock and agreed interruptions (e.g. weather, strikes, holidays, etc.)
• Statement of Facts for load and discharge port
• Calculation of Laytime and Demurrage or Dispatch

CASE STUDY: The Johanna Oldendorff – whether vessel anchored off a port was an ‘arrived ship’ such that the NOR tendered started the Laytime clock.

• Time Charters (including NYPE C/P terms review)
• Vessel description, including Load Capacity, Speed and Fuel Consumption
• Charter period inclusive of Redelivery Underlap and Overlap provisions
• Payment of Hire in advance and right of withdrawal for non-payment
• Hire terms application of Currency, Escalator and Anti-Technicality Clauses
• Off-hire if full use of vessel is not available to Charterer and deduction from hire payment
• Employment clause entitling Charterer’s control within the agreed trading area
• Charterer’s entitlement to require the Master to sign B/L’s not be in conformance with C/P terms
• Charterer’s obligation to indemnify Shipowner against additional liabilities
• Charterer’s obligation to return vessel ‘in same good order…fair wear and tear excepted’
• On-hire and End-hire survey and bunker fuel measurement

CASE STUDY: Charterer’s ‘absolute’ obligation to provide bunkers as specified and Shipowner’s claim for engine damage due to provision of contaminated bunkers.

VOLUME CONTRACTS OF AFFREIGHTMENT (COA’S)

• Concept of ‘Industrial Chartering’ as a freight hedging tool
• Review of BIMCO’s VOLCOA standard form contract Carriage of a large cargo quantity under linked Voyage C/P’s
• Obligations and rights of the parties

CHARTER NEGOTIATION & ‘FIXING’

• Chartering process, market pricing and bargaining power.
• Intermediary role of the Chartering Broker, authority as ‘agent’ and their commission.
• Terminology including ‘Indication’, ‘Offers’, ‘Main Terms’, ‘Subjects’ and ‘Clean Fix’
• Use of BIMCO Standard C/P forms e.g. NYPE and GENCON
• Issues relating to ‘Rider Clauses’ and ‘Fixture Notes’

LAW AND PRACTICE OF BILLS OF LADING

Three primary B/L functions Receipt for the cargo

• Evidence of carriage contract
• Document of title
  • Three principal parties to B/L contract and impact of COGSA 1992
  • Main B/L types and their use: ‘
• To Order’ B/L
• ‘ Straight’ B/L
• ‘Seaway’ B/L
  • BIMCO standard form B/L’s, content review & comparison:
• CONGEN B/L 2016 (Dry Bulk)
• CONLINE B/L 2016 (Container)
• GENWAY B/L 2016 (Way bill)

BILL OF LADING PROBLEMS

• Shipper’s Letter of Indemnity (LOI) for issuing ‘Clean on Board’ B/L’s
• Shipper’s LOI for issuing Ante (Pre) and Post dated B/L’s
• Consignee’s LOI for collection without presentation of B/L
• Authority of ship’s agent to sign B/L’s on behalf of Master
• Identification of the contractual carrier and party liable for cargo claims.

CASE STUDY: The Nogar Marin – Master’s Charterparty obligation to sign clean on board B/L’s ‘as presented’ when steel cargo was rusty and damaged?

CARRIAGE OF GOODS BY SEA CONVENTIONS

• International cargo liability conventions:
  • Hague Rules 1924
  • Hague Visby Rules 1968
  • Hamburg Rules 1978
  • ‘Hybrid’ national law rules
  • Rotterdam Rules 2008

• What Rules apply and when?
• Function of the B/L Clause Paramount
• Obligations and entitlements of the parties to the B/L
• Carriers’ exemptions from liability subject proof of due diligence to make vessel seaworthy
• Carriers’ HV Rules limitation of liability
• Cargo claims Time Bar and ‘stopping the clock’

MULTIMODAL AND THROUGH TRANSPORT CARRIAGE

• Containerization and advent of ‘door to door’ delivery
• Definitions and comparison of Unimodal, Multimodal and Through Transport
• Liner Trade – Multimodal B/L’s and the legal obligations of the ‘door to door’ single contracting carrier
  • Example: MULTIDOC 2016

• Through B/L’s and the legal obligations of the ‘door to door’ contracting and subcontracting carriers
  • Example: CONLINEBILL 2016
• Application of the Hague, Hague Visby and Hamburg Rules, together with the CMR, to exempt or limit carrier’s liability.
• Use of the Himalaya and/or Circular Indemnity Clauses to extend protection of the Rules to subcontractors

CASE STUDY: Container cargo damage scenario, onus of proof and application of B/L terms.

CARO, P&I AND HULL INSURANCE

• Application of the Marine Insurance Act 1906 and Insurance Act 2015
• Underlying insurance principles and definitions
  • Cargo insurance policies: Cover provided by ICC Policies forms A, B and C
  • Minimum cover required under INCOTERMS CIF sale and shipment
  • Cargo underwriter’s subrogated recovery against a carrier and their P&I Club

• Shipowners’, Charterers’ and Traders’ P&I liability (P&I) insurance P&I Club Rules and the shipowners’ and charterers liabilities covered, inclusive of cargo damage and other losses.
  • P&I exclusions from cover and warranties
  • P&I recoveries against 3rd parties and contractors.
  • P&I cover for unpaid cargo GA contributions

• Shipowners’ Hull and Machinery (H&M) insurance
  • Cover provided by the ITCH 1983 Clauses, inclusive of Salvage, GA and Sue and Labour expenses.
  • H&M exclusions from cover and warranties
  • H&M recoveries against 3rd parties including cargo shipper interests and charterers.

CASE STUDY: MV Rena – container ship grounding resulting in pollution, cargo damage, salvage, GA and wreck removal.

JURISDICTION, LAW & DISPUTE RESOLUTION

• Choice of Jurisdiction and Law (J&L) clauses and incorporation into C/P and B/L contracts
• Issues of forum non conveniens to avoid agreed J&L clauses
• Resolution methodology review and comparison inclusive of: Negotiation
  • Mediation
  • Arbitration
  • Litigation

DISCUSSION: Factors impacting on choice of dispute resolution method and outcomes.