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IN THIS ISSUE
1. Taking the weight
2. Seafarers’ happiness
3. Shipbuilding expertise
4. IMO Legal Committee
5. Win Win comment
6. Self-examination
7. Immunity no go
8. IACS results
9. GAFTA date of default
10. Ballast water recommendations
11. China energy
12. Conflict and emissions
13. Demystifying ESG
14. Pit stop
Notices & Miscellany
Readers’ responses to our articles are very welcome and, where suitable, will be reproduced. Write to: contactus@themaritimeadvocate.com
1. Taking the weight
P&I club Gard came up with some disturbing figures the other day, in a thought provoking note on mooring operations. Using statistics garnered from the International Group of P&I clubs, they report that between 2016 and 2021, there were 858 injuries and 31 fatalities which were attributable to mooring operations going badly wrong. The sheer numbers of human casualties ought to shock people into considering how this very routine business of tying a ship up, and letting her go again, remains so very hazardous.
You might suggest that it is all a matter of seamanship, and that the use of flexible lines with enormous weights is always going to be inherently dangerous, but surely in the 21st century we might be modernising the way we go about these tasks. We have all been brought up to the importance of not standing in a bight of rope, staying well clear of the drum and elementary seamanship. But we still largely use unguarded machinery revolving at speed, and ropes and wires are under immense strain and can devastate those vulnerable people on the ship or quayside if they break.
We have diligently painted supposedly safe areas on the deck, but most sensible seafarers are very sceptical about their effectiveness in the case of broken ropes and wires flying about. And because mooring decks are not “revenue earning” parts of the ship, they tend to be squeezed and are often very badly designed by naval architects and shipyards who have only a rudimentary idea of the forces involved, and have more important things to think about.
It is not just the problems of mooring and unmooring which Gard is concerned with as they analyse their claims. Ships get blown off their berths for a variety of reasons, possibly because the mooring arrangements are inadequate or particularly vulnerable to wind and weather. There is a very spectacular video of a cruise ship being blown off its berth in a New Zealand port some time ago, drifting across the harbour and crunching up against another vessel, to their mutual discomfort. There are ships, such as cruise vessels, vehicle carriers and big container ships, which offer so much windage, one wonders how on earth you can find enough bollards and moorings to keep them safe if it comes on to blow. There is interaction with other ships passing close and threatening mooring safety. And the climate change litany is being recited regularly by the resident fanatics to explain every incident when things do give way.
Then there are the moorings themselves, with ropes being made of astonishing strength and very different characteristics, but one might ask whether those using the moorings are fully conversant with exactly what the owners have bought. It is a very long time ago, but I remember a first experience with a synthetic mooring rope that the company thought it would try. It looked and felt just like our tried and trusted manila, but the only advice we were given is to “keep it out of the sun.” And then, in an alarming incident when a tug got into trouble in a lock, it ran around the bitts under pressure, shrank to half its diameter, the friction setting fire to the paintwork on the bitts. We should have run for our lives, had we known a bit more about its characteristics. There is much more complexity today, even though there are SOLAS regulations about the need for regular close inspection of worn or damaged mooring ropes and the careful documentation of their age and usage. Are we all sure how you “rigorously inspect” each sort of rope, and what we are looking for, even though it is all written up in a ship’s Safety Management System? Ropes and modern cordage are arguably the business of specialists, not simple seafarers.
But the issue of injuries and deaths remain the most pressing matter. As if to underline this, the excellent MAIB Safety Digest’s latest issue reports no fewer than three incidents involving mooring operations. In one a barge hand was badly injured when a tension winch handle whipped around, in one a seafarer was dragged into a mooring winch and was badly injured, while there was one case one when questionable design led to somebody falling overboard when passing a heaving line.
While clever design has produced some ingenious ideas for the mooring of regular traders like ferries, there seems to be no real alternatives to the mooring question for “ordinary ships.” Perhaps more remotely controlled equipment, better designed mooring equipment and even robotics might eventually make a difference. Here’s hoping.
Fast bowling
After retiring as senior partner at City lawyers Ince & Co, where he spent 40 years, followed by seven years as chairman of the London shipbrokers Galbraith’s, Richard Sayer has a little more time to watch cricket. But he is more than a spectator and has just published a biography of David Larter, one of England’s fastest fast bowlers and at 6ft.7inches in height, perhaps one of the more intimidating.
The connection is Framlingham College where both author and subject were educated before parting, the former into maritime law, and the latter into professional cricket. If you are into cricket, David Larter – Bowling fast: the highs and lows is a well-written explanation of the stresses and strains of performing at a very high level, and many insights into cricket during the 1960s, when he played with and against other legends of the game. There is a foreword by cricketing royalty in David Gower, whose era is rather more recent. More info at sayer@suffolkskies15.co.uk
Michael Grey is former editor of Lloyd’s List.
2. Seafarers happiness
The findings of the latest Seafarers Happiness Index report by the Mission to Seafarers show a positive start to 2024, with an overall increase in happiness from 6.36 in Q4 2023 to 6.94 out of 10 in Q1 2024. This was driven by a positive trend across all the aspects of seafarer happiness covered by the survey during this period.
The Seafarers Happiness Index (SHI) is undertaken by the Mission to Seafarers, delivered in association with Idwal and NorthStandard, and supported by Inmarsat. The survey offers vital insights into the sentiments and experiences of the men and women who serve at sea.
In contrast to the consistent decline observed in 2023, the Q1 2024 SHI report depicts a mixed but cautiously optimistic rise in satisfaction among seafarers, shedding light on the positive and negative aspects of seafaring life.
The positive shift in seafarer wellbeing reflects improvements in several areas. These include enhanced financial security through fair wages and timely payments, fostering job satisfaction and camaraderie through positive crew relationships, as well as improved connectivity facilitating better communication with loved ones.
Additionally, seafarers reported the benefits of supportive company policies and leadership initiatives promoting crew wellbeing through access to recreational facilities, shore leave, high-quality culturally tailored food, and the prioritisation of health and safety concerns. Comprehensive training programmes have further bolstered seafarer competence and professional development.
Conversely, the report also underscores persistent challenges that will require systemic reforms to improve seafarer wellbeing. These challenges include addressing work-life balance issues such as extended contracts and limited shore leave, which contribute to excessive workloads, stress, and fatigue. Substandard living conditions, connectivity issues – though improved – remain an issue, and disparities in access to welfare facilities are significant concerns. Moreover, poor management practices, including inadequate leadership and discrimination, alongside limited career advancement opportunities and predatory recruitment practices, continue to impact seafarer satisfaction.
A pressing issue highlighted in Q1 2024 is the persistent allegation of fraudulent working hours reporting, resulting in inadequate rest periods and compromised safety standards. Seafarers are increasingly expressing unease and scepticism toward reported working hours’ accuracy, with a reluctance to speak out against potential misconduct. The manual nature of the process combined with a lack of contextual factors is perceived as inherently vulnerable to fraudulent activities, raising doubts about data integrity and effectiveness in capturing the nuanced realities of seafaring life.
Andrew Wright, Secretary-General, The Mission to Seafarers, said: “After the depressing slump in seafarer happiness that we witnessed in 2023, it is encouraging to see a brighter start to 2024. We are cautiously optimistic that this points towards a better year ahead for seafarers, but sustained improvement will require meaningful action. Between us, we have the tools at our disposal to make a difference to the lives of those working at sea, and it is up to us to act.
“Despite the challenges they face, seafarers continue to demonstrate remarkable resilience. The Mission to Seafarers remains committed to amplifying seafarers’ voices, advocating for meaningful reforms, and fostering a culture of respect, inclusivity, openness, and integrity within the industry. Together, we strive to build a maritime industry that not only values seafarers’ contributions, but also safeguards their wellbeing and happiness at sea.”
Yves Vandenborn, Head of Loss Prevention Asia-Pacific at NorthStandard, commented: “As an organisation advocating for seafarer wellbeing, NorthStandard finds it heartening that the Index captures rising seafarer happiness levels in the first quarter of 2024, especially given the decline reported in 2023. We are also encouraged that the overall increase from 6.36 / 10 to 6.94 is driven by gains across all 10 markers used, instead of a selective few. NorthStandard will continue to raise awareness of the experiences of seafarers, and we believe it is crucial that we capture more data about all of those working at sea. We therefore also welcome the fact that female participation in the SHI this quarter was at its strongest ever, representing just over 9% of all respondents.”
Thom Herbert, Senior Marine Surveyor and Crew Welfare Advocate at Idwal, added: “The Q1 2024 Seafarers Happiness Index highlights both progress made and areas requiring further improvement. We are encouraged by the positive trends, particularly around financial security, crew relationships, and enhanced training opportunities. However, we must remain vigilant in addressing persistent challenges like work-life balance, substandard accommodations, and any discriminatory practices that undermine seafarer dignity and morale. Idwal remains committed to championing transparency, accountability, and a culture of care that empowers seafarers to thrive both professionally and personally.”
The Mission to Seafarers, in collaboration with industry partners, is actively addressing the ongoing challenges affecting seafarer wellbeing, providing direct support through a global network of seafarers’ centres and ship visits, chaplains, staff and volunteers, and digital solutions like the ‘Happy at Sea’ app for seafarers.
To read the full Seafarers Happiness Index report for Q1 2024, click here.
3. Shipbuilding expertise
The Indian Register of Shipping (IRS) signed a Memorandum of Understanding (MoU) with the Maritime Research Institute Netherlands (MARIN) in April.
The MoU marks an important milestone for both organisations as they collaborate to perform Hydrodynamic Studies and Model Testing on ongoing new construction projects. Furthermore, the MoU provides for expanding this collaboration to all future projects classed by IRS for Indian shipyards.
Maritime research institute MARIN will contribute to the partnership by sharing scientific knowledge and providing hydrodynamic research services to IRS and its clients on a project-by-project basis. IRS will also have access to MARIN’s research facilities and tools in the Netherlands. This will enhance IRS’ ability to provide state-of-the-art maritime solutions. IRS, for its part, will provide key inputs for the concerned projects, and ensure that the requirements of its clients are fully met. To ensure that the aim is met, both parties will determine the final scope of the cooperation through definitive agreements for each project.
PK Mishra, Joint Managing Director of IRS, stated: “As part of our mission to elevate professional research in shipbuilding, this collaboration marks a significant step forward. We aim to enhance our services by fostering innovation and excellence with the help of MARIN’s expertise and resources.”
The numerous new construction projects, currently under IRS Classification, of which a substantial number are defence projects, will benefit from the MoU, which, through sharing of expertise between both organisations, will provide shipyards and designers with hydrodynamic services for existing and future projects.
4. IMO Legal Committee
IMO’s Legal Committee met in person for its 111th session at IMO Headquarters in London from 22 to 26 April 2024. The Committee deals with all legal matters within the scope of IMO, including issues relating to liability and compensation, fair treatment of seafarers and the fraudulent registration of ships. The session was chaired by Gillian Grant of Canada.
LEG 111 highlights
- Guidelines on the fair treatment of seafarers detained on suspicion of committing crimes finalized
- New Task Force to review abandonment database established
- Fraudulent registration and fraudulent registries of ships - work on due diligence in ship registration continues
- New output on guidelines or best practices on the registration of ships to be developed
- Revised Guidelines for accepting Insurance Companies and Certificates approved
- New information brochure on the Athens Convention approved
- Measures to assess the need to amend liability limits approved
- Autonomous shipping – a roadmap on LEG’s work on MASS approved
- Facilitation of the entry into force of the 2010 HNS Protocol
- Piracy and armed robbery issues.
For more details see the IMO website.
5. Win Win comment
Hill Dickinson recently considered the case of the Win Win in an online insight.
This dispute arose out of a completely unintentional and unexpected traffic infringement by the master of the Win Win while anchored like hundreds of other ships outside the port of Singapore in February 2019. What transpired was almost 18 months’ detention of the vessel and her crew by the Indonesian authorities and the Master’s prosecution and conviction – significantly more than a mere ‘slap on the wrist’. Hill Dickinson acted for one of the parties in the case and readers can find the complete comment on the company’s website.
https://www.hilldickinson.com/insights/articles/win-win-win-ship-interests-succeed-constructive-total-loss-claim
Data group claims
Hill Dickinson also considers the issue of data group claims and the difficulties in proving damage on its website.
In Farley v Equiniti [2024] EWHC 383 (KB), the court considered whether putting personal information/data “at risk” or “in danger” was sufficient to found a claim for breach of data protection legislation and/or misuse of private information.
6. Self examination
With the recent introduction by the UK Maritime and Coastguard Agency of a post-training survey of all seafarers taking oral exams, the release of a new edition of The Nautical Institute’s The Shipmaster’s Business Self-Examiner 2024 will be useful for all senior deck officers studying for the Master’s Orals examinations as well as newly qualified Masters and those who have decision-making responsibilities at sea and onshore.
This 11th edition retains the question-and-answer format of its predecessors but has been redesigned to provide a much-improved reader experience. The subject has been split into 114 topics, which will help the user navigate their way through the complexities of the Master’s duties.
Captain Malcolm Maclachlan’s text has been completely revised by maritime lawyer Dr Simon Daniels AFNI and Captain Forkanul Quader FNI, who has long experience as an MCA examiner of Masters and mates.
The study aid has been updated to the end of Q1/2024. It reflects the latest revisions to international maritime legislation such as STCW, BWMC, MARPOL and MLC, and incorporates the major changes to UK regulations introduced after Britain’s exit from the European Union.
An introductory section provides practical guidance on preparing for and answering Master’s Orals. The Q&As align with topics covered in recent Orals questions and better reflect the needs of today’s shipping industry. Each Q&A pair is numbered and cross-referenced against the UK statutory instruments (SIs), MCA notices and international codes and conventions cited in the text.
In his Foreword to the 2024 edition, Roger Spence, former MCA deputy director, wrote:
“The Shipmaster’s Business Self-Examiner has become the go-to book for candidates preparing for the acid test in maritime training, the oral examination… I urge all those who go down to the sea in ships to hold this book close at hand, wherever they may be.”
More information can be found at https://www.nautinst.org/shop/the-shipmaster-s-business-self-examiner-eleventh-edition.html.
7. Immunity no go
Brian Perrott and Colin Chen of HFW have looked at the immunity situation in their online newsletter London Calling.
The Commercial Court recently considered whether the State of Libya (the “Defendant”) had waived its right to assert state immunity*.
Background
As part of seeking to enforce an ICC arbitral award, General Dynamics United Kingdom Limited (the “Claimant”) had applied for a final charging order over a London-based property owned by the Defendant. The Defendant primarily argued that the property was immune from enforcement pursuant to s.13(2)(b) of the State Immunity Act 1978 (the “SIA”).
The Claimant argued that the Defendant had given written consent to enforcement pursuant to s.13(3) of the SIA. It was argued that such consent derived from the underlying commercial contract, which was governed by Swiss law. The final sentence of clause 32 of the contract stated that: “Both parties agree that the decision of the arbitration panel shall be final, binding and wholly enforceable” (emphasis added).
Decision
Butcher J held that “whether the words used have the effect of removing a state’s immunity from enforcement depends not simply on the words used when read in isolation but what effect the words used have when read in their correct legal and factual context and in this case when applying Swiss principles of construction“. In the circumstances, it was held that the parties’ intention was to enable a valid arbitral award to be enforceable in the same way as it could be in any commercial agreement between non-state parties.
Comments
The effect of clause 32, in particular the words “wholly enforceable” in the final sentence, was to waive the Defendant’s immunity from enforcement against its assets. The case reminds everyone that it is important to consider the precise wording used in dispute resolution clauses.
* General Dynamics United Kingdom Limited v The State of Libya [2024] EWHC 472 (Comm)
8. IACS results
The International Association of Classification Societies has published its 2023 IACS Annual Review, which is now available to download.
This year’s Annual Review includes a broad range of articles highlighting IACS’ work in 2023, with a strong emphasis on the significant advancements made in alternative fuels. This includes the development of a new Unified Requirement on the release of ammonia from ammonia fuelled vessels, and the newly established Safe Digital Transformation Panel that focuses on the safety implications of increasingly digitised ships, together with IACS’ engagement with the industry on existing and emerging technical challenges.
The Annual Review also sheds light on IACS’ role in fostering technical cooperation and support to the IMO and its Member Flag States in advancing the safety of decarbonisation and related fields.
This edition of the annual review also has an array of in-depth technical articles on the loss of containers at sea, Underwater Radiated Noise, Rec 177 on Shipbuilding and Remedial Quality Standard for Machinery Piping Systems, along with updates on Quality and EU Matters, to name but a few.
Robert Ashdown, IACS Secretary General, said: “2023 was a busy, productive year for IACS, in which we continued to share our expertise and knowledge on a wide range of technical and regulatory matters. Much of this focused on the safe development and deployment of alternative fuels, in support of shipping’s decarbonisation, as well as addressing the safety considerations of shipping’s digital transformation. Through our standards and guidance, IACS and our members are playing an integral role in putting safety at the heart of shipping’s innovation, and our Annual Report highlights the breadth of our work during the past year.”
The Annual Review also includes details of all the new, updated, and deleted IACS Resolutions in 2023, as well as information on IACS’ numerous submissions to IMO and the ‘Class Report’, which contains data on the IACS fleet.
Please contact the IACS Permanent Secretariat at permsec@iacs.org.uk for a hard copy of the 2023 Annual Review
9. GAFTA date of default
Holman Fenwick Willan has published a London Calling piece on GAFTA by Brian Perrott and Lee Forsyth on its website.
Background
Agroinvest (as seller) entered into a contract with Ayhan Sezer (as buyer) for the sale of rape and soybean meal, which incorporated Gafta Contract 100. After the Contract was entered into the Buyer indicated it would not perform.
The Buyer agreed it was in breach but disputed the date of default.
The Gafta First Tier Tribunal and Appeal Board determined that the date of default was the date upon which the repudiation was accepted. The case was then appealed to the Commercial Court.
Decision
In relation to the date of default, the Court had to decide whether the relevant date should be the date of the anticipatory repudiatory breach by the Buyer, or the date of acceptance by the Seller. The Court considered that certainty was an important factor and concluded that the appropriate date was the date that the Buyer made clear that it was repudiating the contract.
Comment
The case is important as the determination of the date of default under GAFTA contracts has a bearing on the date that damages are calculated and therefore the amount recoverable. Given the commonly understood principle that a repudiation will not be effective and will confer no rights until it is accepted, the decision that the date of default may precede the acceptance of a repudiation may come as a surprise.
It is possible that the case may be appealed but, as matters stand, parties to a Gafta contract may have to react quickly to mitigate any potential losses following an anticipatory breach by another party.
Ayhan Sezer Yag Ve Gida Endustrisi Ticaret Limited Sirket v Agroinvest SA
10. Ballast water recommendations
In a significant stride towards environmental sustainability and compliance with maritime regulations, IACS has published a new recommendation, Rec. 180, for Conducting Commissioning Testing of Ballast Water Management Systems.
Ballast water, a key component of safe and efficient shipping operations, has long posed a risk to maritime ecosystems due to its potential for transferring harmful aquatic organisms and invasive species. As the maritime industry continues to address the negative effects associated with ballast water transfer, the effective implementation and proper functioning of Ballast Water Management Systems (BWMS) is paramount. Efforts to streamline the implementation of the BWM Convention took a significant step forward with IMO’s approval of the “2020 Guidance for the commissioning testing of BWMS” and IACS has now further bolstered these efforts with the development of a comprehensive Recommendation (Rec. 180) to facilitate the smooth, effective, and harmonised implementation of commissioning tests requirements in line with the international regulations.
The guidance in Rec. 180 facilitates a uniform approach to conducting the commissioning tests of BWMS by verifying that the ballast water is being discharged in accordance with the D-2 standard of the BWM Convention and by an assessment of the proper operation of the self-monitoring equipment. Commissioning tests conducted during an initial survey (and any subsequent additional survey which could be triggered by significant changes, replacements, or repairs to the BWMS), play a crucial role in validating the proper functioning of all mechanical, physical, chemical, and biological processes within the system, effectively mitigating the risk of ecological damage to the marine ecosystem.
Derived from practical experience and feedback gathered by IACS following the approval of IMO’s 2020 guidance, the recommended practices in Rec. 180 include essential preparation steps that allow ship operators to ensure the seamless and efficient execution of commissioning tests and the establishment of industry-wide best practices for ballast water management. In addition, the utilization of recommended reporting forms outlined in the guidelines significantly enhances transparency throughout the testing process and ensures all stakeholders are not only kept informed but are also actively involved.
Commenting on this new Rec. 180, IACS Secretary General, Robert Ashdown said, “IACS’ Rec. 180 marks a further contribution to the safeguarding of the marine environment by streamlining the commissioning testing of Ballast Water Management Systems. Commissioning testing plays a crucial role in validating the proper functioning of the BWMS, in mitigating the risks of ecological damage caused by the introduction of non-native species and in ensuring compliance with the IMO regulations. Adopting Rec. 180 can also provide the basis for industry best practice in this area.”
11. China energy
The impact of China on the global energy transition cannot be underestimated with China’s enormous green energy shift and its large share of the world’s emissions.
In a report on China’s energy transition, and part of DNV’s Energy Transition Outlook series, DNV finds that China:
• is set to quintuple its renewable energy installations by 2050
• shifts its power mix from 30% renewables today to 88% by mid-century
• in less than a decade has increased its solar power generation from 1 to 5%, but this will increase to 38% of electricity production by 2050.
• stands for 33% of global energy-related emissions today. They will reduce annual emissions by 8Gt between now and 2050, which is three times as much as Europe’s emissions reductions.
More details of the report can be found on the DNV website.
12. Conflict and emissions
Conflict in the Red Sea has brought massive carbon emissions increases in ocean freight container shipping, according to data released by Xeneta.
The Xeneta and Marine Benchmark Carbon Emissions Index (CEI), which measures carbon emissions per ton of cargo transported across the world’s top 13 trades, hit 107.4 points in Q1 2024 – the highest it has been since the index began in Q1 2018.
For containers being shipped from the Far East to the Mediterranean, the CEI reveals carbon emissions increased by 63% in Q1 2024 compared to Q4 2023. From the Far East into North Europe, carbon emissions increased by 23%.
This is a direct result of conflict in the Red Sea region, which escalated in December and has seen most ocean freight container services avoid the Suez Canal due to the threat of attack by Houthi militias.
Emily Stausbøll, Xeneta Market Analyst, said: “We are all aware of the human and economic cost of war, but this data demonstrates there is also price to pay for the climate.
“Containers being shipped to the Mediterranean from the Far East travelled 9,400 nautical miles on average in Q4 before the escalation in the Red Sea. They are now sailing an additional 5,800 nautical miles due to diversions around the Cape of Good Hope in Africa, with the inevitable consequence of more fuel being burned.
“Ships are also being sailed at higher speeds in an attempt to make up time due to the longer distances, which again results in more carbon being burned.”
Data released by Xeneta – the leading ocean and air freight rate benchmarking and intelligence platform – also reveals disruption in the Red Sea has pushed some shippers into using air freight to protect supply chains.
With the largest ocean freight carriers still choosing to avoid the Red Sea, cargo from the Far East is now arriving by ship at ports such as Jebel Ali in the Arabian Gulf before being flown out of Dubai Airport for onward transportation to Europe and North America.
As a result, air cargo demand from Dubai Airport to European destinations increased by 190% in March compared to the same month in 2023.
Stausbøll said: “Not only is air freight more expensive than ocean freight it is also far less sustainable, so this shift to hybrid sea-air services via the Middle East will result in increased carbon emissions per ton of cargo transported.
“Shippers are also now once again using rail services through Russia to transport goods from the Far East to Europe, which similarly to air freight, is more carbon intensive than ocean freight shipping.
“Ocean freight container shipping is only one sector, but this clearly demonstrates the massive impact war can have on carbon emissions and the climate.”
The deterioration of carbon emissions performance comes at a time when the International Maritime Organization (IMO) is working towards net zero in global ocean freight shipping by or around 2050.
2024 has also seen the introduction of EU-ETS regulations which require ocean freight service providers to pay a subsidy based on the amount of carbon emitted on sailings to and from European ports.
Stausbøll said: “The initial IMO targets are based on carbon intensity rather than actual emissions so longer sailing distances won’t necessarily have a negative impact on these measurements.
“However, this peculiarity in the way the IMO records carbon performance cannot hide the fact that conflict has the potential to have a detrimental impact on the sustainability of global supply chains.
“Longer sailing distances will also see an increase in the cost of ocean freight shipping. As well as needing more fuel to sail around Africa, higher CO2 emissions will result in a higher EU ETS bill for ocean freight carriers.
“Carriers will do what they can to pass these costs on to the businesses shipping the goods, whether that is through increasing ocean freight shipping rates or additional surcharges – either way there is a financial price to pay.
“With geo-political conflict and major international incidents such as the Covid-19 pandemic becoming a seemingly more regular occurrence in recent years, there is a lot to consider in terms of how ocean freight shipping responds to protect supply chains while also meeting carbon emissions targets.”
For more data and insight on the increases in ocean freight shipping following the escalation of conflict in the Red Sea, read the latest Xeneta blog here.
13. Demystifying ESG
The demand for organisations across the freight transport spectrum to develop a cogent ESG – Environment, Social, Governance – policy is ever increasing, says insurance provider the TT Club.
TT has produced a toolkit to assist those it insures meet the complex demands developing ESG policies present. It provides signposts to strategies and solutions to challenges such as emissions calculation, reduction and reporting.
Commenting on the launch of the toolkit TT’s CEO Charles Fenton says, “The rapid development of ESG principles presents a challenge to many Members, particularly smaller operators. Our ESG toolkit is in line with our commitment to providing our Members, and the sector as a whole with the resources to give insight, educational content and support in navigating a company’s pathway in this complex area.”
“The toolkit will develop over time to build a resource base of success stories of effective ESG strategies from across the cargo handling and supply chain sectors, ” explains TT’s Managing Director Loss Prevention, Mike Yarwood. “This series of case studies provide building blocks to guide others in designing and embedding ESG policies and will be augmented as our experiences and those of our Members and partners evolve.”
The components of ESG – Environment, Social, Governance – are well recognised, but what is less well known are the varied implications of applying high and developing standards of business practice in each area.
Support and guidance to help mitigate the environmental impact of operations is a valid start point but knowing what to consider will be starkly different for a freight forwarder, a port or a container terminal. Operations must positively impact local communities wherever possible. However, transport and logistics companies wield significant influence over numerous social factors from ensuring fair labour practices to promoting diversity and inclusion and to safeguarding employee well-being. What are the best means of ensuring these goals is a question an operator must answer.
Further, the requirements and benefits of good governance are still evolving alongside the rise of ESG. This predates environmental and social risks as a corporate priority but inconsistent developing demands by both international regulators and national governments means transport operators must keep a watchful eye on variable trends.
In all cases TT believes its ESG toolkit provides current, practical guidance to operators.
*Available via this link ESG toolkit (ttclub.com) for free download
14. Pit stop
Brian Perrott and Maria Alexandroff of HFW have looked at a dispute involving the termination of an agency agreement in London Calling: No good faith pit stop!
The dispute arose when Aston Martin MENA (‘AMMENA’) terminated an agency agreement with Aston Martin Lagonda (‘AML’). The agreement had appointed AML as AMMENA’s agent for distributing operations in the MENA region. During the agreed transitional period, AMMENA alleged that AML breached the express and implied duties of good faith in various ways.
Issue before the court
Whether during the transition period, AML acted in breach of the express duties of good faith in the agency agreement and/or an implied duty of good faith?
Decision
The Court determined that the express provisions in the agreement to act “reasonably and in good faith” had a narrow scope and did not extend to the transition period. Additionally, the Court dismissed AMMENA’s argument that, despite the absence of express duties, there were broad implied duties to cooperate in good faith during the transition period. Implied terms, the Court emphasised, only arise if they are “necessary” for the contract’s business efficacy – a high threshold that was not met here. As Dame Clare Moulder put it, “it is difficult to see how it can be said to be ‘obvious’ or ‘necessary’ that if a transition period were to be agreed, a duty to cooperate should be implied”. In any event, the Court rejected AMMENA’s nine specific allegations of breach, concluding that AML had acted in good faith at all times.
Comments
This case reiterates the Court’s cautious approach when considering duties of good faith. Rather than imposing additional obligations beyond the contractual terms, the Court maintains a strict and narrow stance. The decision also highlights the high threshold in establishing implied terms. This is particularly evident in contracts that have been professionally and comprehensively drafted.
Aston Martin MENA Limited v Aston Martin Lagonda [2023] EWHC 3285 (Comm)
Notices and Miscellany
London Shipping Law Centre is holding an event on May 8 with 36 Stone and Squire Patton Boggs to discuss fraudulent presentation of shipping documents under letters of credit. The event will take place at 1800 hrs at Squire Patton Boggs’ London office.
Letters of credit are meant to provide a smooth conduit for the easy exchange of shipping documents and money in international trade. Fraud, however, unravels all.
How easy is it, and how easy should it be, for fraud to justify non-payment against what appears to be a perfectly compliant presentation? Does the “fraud exception” undo letters of credit as the lifeblood of international commerce?
REGISTER TO ATTEND
Partner appointments
Global, sector-focused law firm HFW has continued to expand its global shipping and export finance practices with the hire of Partner Paolo Pinna and Associate Constance Ollat.They joined HFW on 2 May from Norton Rose Fulbright.
Please notify the Editor of your appointments, promotions, new office openings and other important happenings: contactus@themaritimeadvocate.com
And finally,
With thanks to Paul Dixon
Signs you live in 2024
1. You just tried to enter your password on the microwave.
2. You have a list of 15 phone numbers to reach your family of three.
3. You call your son’s phone to let him know it’s time to eat, he emails you back from his bedroom.
4. Your daughter sells Girl Scout cookies via her website.
5. You chat several times a day with a stranger from South Africa, but you haven’t spoken with your next door neighbour yet this year.
6. You check the ingredients on a can of chicken noodle soup to see if it contains Echinacea.
7. Your grandmother asks you to send her a JPEG file of your newborn so she can create a screen saver.
8. You pull up in your own driveway and use your cell phone to see if anyone is home.
9. Every commercial on television has a web site address at the bottom of the screen.
10. You buy a computer and four months’ later it is out of date and now sells for half the price you paid for it.
11. Leaving the house without your cell phone, which you didn’t have the first 10-40 years of your life, is cause for panic and turning around to go and get it.
12. Using real money, instead of credit or debit, to make a purchase would be a hassle and takes planning.
13. Cleaning up the dining room means getting the fast food bags out of the back seat of your car.
14. Your reason for not staying in touch with family is that they do not have e-mail addresses.
15. You consider second-day air delivery painfully slow.
16. Your dining room table is now your flat filing cabinet.
17. Your idea of being organized is multiple-colored post-it notes.
18. You hear most of your jokes via e-mail instead of in person.
19. You get an extra phone line so you can get phone calls.
20. You disconnect from the Internet and get this awful feeling, as if you just pulled the plug on a loved one.
21. You get up in the morning and go online before getting your coffee.
22. You wake up at 2 am to go to the bathroom and check your e-mail on your way back to bed.
23. You start tilting your head sideways to smile. [:)]
24. You’re reading this.
25. Even worse; you’re going to forward it to someone else!!! Yep…
Thanks for Reading the Maritime Advocate online
Maritime Advocate Online is a fortnightly digest of news and views on the maritime industries, with particular reference to legal issues and dispute resolution. It is published to over 20,000 individual subscribers each edition and republished within firms and organisations all over the maritime world. It is the largest publication of its kind. We estimate it goes to around 60,000 readers in over 120 countries.
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