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IN THIS ISSUE
1. Holiday miscellany
2. Container safety
3. China seaborne trade
4. Senegal solutions
5. Contempt of court
6. Safety support
7. Anti-dumping
8. IMO deliberations
9. Deemed fulfilment
10. Container spike
11. ISU statistics
12. LOF
13. In Memoriam
Notices & Miscellany
Readers’ responses to our articles are very welcome and, where suitable, will be reproduced. Write to: contactus@themaritimeadvocate.com
1. Holiday miscellany
By Michael Grey
You can tell that the summer holidays have arrived when the more bizarre items to be found in the media start to proliferate, like well fertilised flower beds. When I worked for the only daily newspaper that specialised in maritime matters, we could guarantee that we would have an earnest request from some otherwise reputable organ to answer questions about some new theory about the Titanic, which had suddenly been unearthed by some questing scribe. Could we do a “to camera” interview on the latest sensation about the Bermuda triangle, which has revealed that it is really a tetrahedron?
This year will be no different, with yet another expedition to the Titanic wreck site, while what has become known as the “Titanic shipyard” in Belfast (you would have thought that this was the only ship they ever built) is making headlines for all the wrong reasons, teetering on the financial abyss once again. But this holiday season will surely be more memorable than most, on account of the greatest ever global computer meltdown, which we are assured was caused by a simple error rather than some malign interference. We better believe them, at least until the team redeployed from the Titanic story come up with what really caused the chaos. And at sea there are fresh navigational warnings about not taking your GPS readouts too literally, with reports from several areas, such as the Baltic, Eastern Mediterranean, the Gulf, South China Sea, and the Black Sea, all suggesting that more old-fashioned forms of navigation should be recommended. Maybe it should be regarded as useful practice, should the curse of the “blue screens” suddenly infect technology afloat.
It is not a wholly ridiculous idea. Some things are surprising, others utterly predictable. In the latter category is the sad fact that filthy weather off the Cape of Good Hope is playing merry hell with the schedules of the shipping which has been diverted by the Houthi warfare on the Red Sea Route. Forty boxes over the side and another thirty damaged from one ship might just be the start as the winter takes its toll on the summer cargoes.
There is increasing angst about cruise ships making life for the locals insupportable during the holiday season and a growing number of destinations actively attempting to ration their visits, or even ban them. The anti-tourist contagion is spreading from ports to holiday destinations in general, with angry locals being offensive to visitors peacefully sitting in cafes.
You might have some sympathy for both sides in this intractable problem. The tourists, who have somehow managed to reach their destinations after their flights had been cancelled because of computer meltdowns, “flight-shamed” by their eco-fanatic neighbours and charged extortionate taxi fares from the airport, might feel entitled to a little relaxation. The locals, who probably bear little ill-will to hapless visitors, see them not as individuals, but a human tide. It could be an opportunity for ferry operators to stress their more sustainable credentials, always supposing that the “just stop oil fanatics” and their ilk do not glue themselves to the linkspan. It would be good to escape for a few weeks from the guilt which the eco-loons are intent on inflicting on us all, which probably means just staying at home.
At least the IMO, with its proliferating army of green NGOs, will be on holiday for a few weeks. Will the Carbon Intensity Index question, which is causing such universal objections, with its “one size fits all mandate” be resolved? This will spoil a lot of holidays. Surely, everyone will have realised that there is no silver bullet on the marine fuel question, with wind propulsion about the only truly “carbon neutral” solution, at least until somebody discovers that all the sails and masts and rotors are manufactured in some Chinese foundry fuelled by brown coal.
Ammonia, LNG, Hydrogen, methanol, batteries, scrubbers – whatever the solution, there will be some snag unearthed which will be played heavily by whatever green NGO is specially tasked with objecting to it. And while the micro-nuclear reactors seem a delightful route to getting some speed back at sea, you can deduce what the objections to this will comprise. Answers on a single sheet of paper.
Michael Grey is former editor of Lloyd’s List
2. Container safety
The British International Freight Association (BIFA) used the latest episode in its 2024 webinar series to deliver some key advice on the subject of safety in the container shipping environment.
Keynote speaker at the webinar was Mike Yarwood, managing director of loss prevention at the TT Club. He was supported by Robert Windsor, BIFA’s member policy & compliance director, with responsibility for advice and information on maritime, road and dangerous goods, BIFA Standard Trading Conditions (STC), as well as legal and insurance matters.
Yarwood and Windsor guided attendees through crucial safety practices in the maritime containerised supply chain.
The webinar covered three key areas, including the proper packing, transport, and unpacking of cargo transport units (CTUs) including insight into best practices to ensure the safe handling of freight containers, an often-overlooked aspect in maritime transport compared to air freight.
Furthermore, in addressing the management of hazardous cargoes, the webinar highlighted the dangers of non-declared and mis-declared hazardous cargoes and attendees gained insights into the initial checking of documentation, methods for identifying non-compliant freight; and some steps for regularising cargoes.
Additionally, understanding the importance of accurately weighing cargo to establish the Verified Gross Mass (VGM) of the container was addressed as well as its significance to ensuring safe and compliant shipping practices.
BIFA took the opportunity to emphasize the importance of incorporating its Standard Trading Conditions (STC) into contracts to maximise their protective benefits.
Commenting on the webinar, Windsor said: “There have been several widely reported container fires aboard ships, where containerised cargoes may have been the cause of, or contributed to such fires.
“BIFA believes that consistent, widespread and diligent adherence to the CTU Code by all parties within global CTU supply chains would significantly reduce these types of incidents, some of which have resulted in fatalities and serious injuries amongst ships’ crews and shore-side staff.
“Other occurrences, such as container stack failures, vehicle roll-overs, train derailments, internal cargo collapses and incidents of invasive pest contamination, can also be traced to poor packing practices.
“Through activities like this webinar, we hope to foster a greater awareness of the CTU Code and the packing practices and techniques it contains and help to reduce such incidents.”
Yarwood added: “Raising awareness of the myriad risks that permeate the global supply chain, via webinars such as this, is fundamental in influencing the adoption of better practices that will increase the safety, security and sustainability performance of operators. TT Club is grateful to BIFA for providing the platform and access to an engaged audience”.
3. China seaborne trade
Drewry has analysed the potential implications of China’s strategy to diversify its coking coal import partners, which will have multiple implications on shipping. The burgeoning trade with Mongolia will curtail seaborne trade, while higher imports from Russia over Australia will dampen the tonne-mile demand. Massive potential trade growth is expected between Mongolia and China due to the commencement of the railway network between the two countries in 2023 and the construction of two additional rail networks underway.
China’s seaborne coking coal imports rose 5.3% YoY in January-April 2024, with total imports expanding by a much higher rate due to the uptrend in overland trade. The mining restrictions in the country have curbed domestic production, leading to a 3% decline YTD, while skyrocketing steel exports have counterbalanced the weak steel demand domestically, keeping imports of metallurgical coal buoyant. However, the surge in total metallurgical coal imports is attributed to the higher expansion in land trade compared to seaborne imports.
While the demand for coking coal looks promising, the declining share of seaborne trade and the shift in trade patterns in the short term have critical implications for the global shipping demand. The expansion in overland trade from Mongolia and the tepid growth in imports from Australia will dampen shipping demand. For more details see the Drewry website.
4. Senegal solutions
If seeking to avoid fines and detention in Senegal – preparation is key says a new opinion piece on the Gard website. In recent years, customs fines in Dakar have become both more frequent and more expensive. Vessels are often detained and only released upon payment of the fine or posting of security for payment.
In addition to customs authorities, Immigration authorities also carefully scrutinise crew documentation and if any discrepancies are found, may confiscate crew passports and summon the Master for questioning. The Marine Anti-Corruption Network MACN and the International Group of P&I Clubs have published a Guidance Document that provides an overview of the documents required by the authorities during the pre-port call, the inwards clearance and the outwards clearance processes. Gard’s correspondent, Budd Senegal, explains the different agencies involved and what to expect when calling Dakar.
Two different subdivisions of Senegalese Customs are responsible for carrying out controls on vessels. Both can levy fines.
Since 2019, vessels have been at an increased risk of Customs fines because Customs’ Bulk and Bagged Cargo Subdivision has been monitoring discharge operations and automatically levying fines if there is any discrepancy between the quantities of cargo recorded at the weighbridge (including overlanded cargo) and the quantities shown on the cargo manifest. The MACN/IG Guide warns that the absence of a ship-appointed surveyor could result in exaggerated claims. As a precautionary measure it is therefore important that owners and/or charterers appoint a tally surveyor.
Gard’s correspondent notes that when a vessel carrier is expected to complete discharge of bulk or bagged cargo over a weekend, Customs will detain the vessel with a view to securing payment of any applicable fine. In such cases, the vessel should immediately contact their local P&I correspondent with a view to negotiating with Customs and ensuring that the vessel is able to sail on time.
This service has the authority to levy fines for any perceived discrepancies in declarations regarding bunkers, ship’s stores, personal effects or goods in transit or for trans-shipment. The MACN/IG Guide provides a list of items required in the inventory lists. The report must be updated with the exact quantity upon berthing.
Mis-declaration including a discrepancy in quantity may also be considered an attempt to avoid paying Customs duties. The resulting Customs fines are imposed in accordance with Article 62 of the Senegalese Customs Code which provides that:
Cargo arriving by sea must be shown on the manifest or loading list.
The manifest must be signed and dated by the master of the vessel or his representative. It must provide sufficient information to indicate the type and quality of the cargo as well as any possible prohibitions, in particular:
The number of packages;
The brands and numbering of the said packages;
The nature of the cargo;
The loading and delivery destinations.
The Managing Director of Customs may, whenever it is deemed necessary, modify the list of mandatory indications.
It is forbidden to list as one single unit in the same manifest several sealed packages assembled together in any way or form.
In addition to the above, Budd Senegal reports that in recent years, vessels have had to face a new problem following the intensification of border controls on inward bound vessels by the Senegalese Immigration Services.
Dakar’s Immigration Services demand that all passports and seamen’s books are accurate, up to date, and signed where appropriate.
Seamen’s books should be:
Correctly stamped in the right place with the shipowner’s stamp;
completed in full;
indicate the crew member’s correct rank;
show full and accurate joining and leaving ports and dates.
When an anomaly is found in the crew’s travel documents during inward clearance visits on board, Dakar’s Immigration Services will not hesitate to confiscate crew passports and summon the Master to their offices for questioning. Under law, any irregularity in travel documents can result in criminal charges and, in principle, the Master of the vessel can be arrested and sent to prison.
So far, Budd Dakar has been successful in resolving such issues with Immigration amicably.
Immigration Officers do not always speak fluent English and communications problems with the crew can create a hostile environment. To avoid any escalation, it is vital to show due respect to Immigration officers in their capacities as representatives of state authority.
Those intending to call Dakar should carefully review the MACN/IG Guidance and the Master should ensure that the preparations for Port Entry are in line with the guidance.
Before arrival, check with the local agent for any additional or new requirements.
For bagged cargos, appoint a tally surveyor to attend during discharge.
The Master should personally carry out the formalities on board with the Customs officers in the presence of the vessel’s agent
In the event a discrepancy is found by customs or immigration authorities, immediately contact the correspondent for assistance and notify Gard.
5. Contempt of court
Brian Perrott and Patrick Knox of Holman Fenwick Willan have been looking at London Calling: Clarification of enforcement tool of committal for contempt of court.
Certain court orders, including those requiring the provision by a party of disclosure of documents in connection with efforts to enforce judgment debts, can be endorsed with a so-called penal notice. This is essentially a warning that the party may be held in contempt of court if they fail to comply. In turn this can lead to the party being committed to prison for that contempt – in practical terms, to the issue of a warrant for the arrest of that party should it step foot on British soil. Committal is thus a powerful enforcement tool to obtain a criminal sanction for a civil wrong.
Very often an application to commit a party for contempt will be made in circumstances where the party in question is seeking to “lie low”. That party will plainly already have ignored at least one court order, and may be continuing to seek to evade the court’s jurisdiction, including by seeking to frustrate attempted service of court documents. This can impact an applicant’s ability to satisfy certain threshold requirements for invoking the court’s contempt jurisdiction.
A recent Court of Appeal decision* highlights certain key points affecting committal applications.
First, where contempt proceedings against a foreign national arise from a claim previously brought by that national before the English courts, there is no need for the applicant to establish jurisdiction for the contempt proceedings or to obtain permission to serve these abroad. This is because the foreign national will be treated as having submitted to the court’s contempt jurisdiction for matters incidental to its claim.
Second, although the court will usually require proceedings seeking to commit a party for contempt to be served on a party personally (given the potentially severe consequences of a committal order in terms of deprivation of the party’s liberty), if that party is seen to be taking active steps to avoid service and there are other methods of communication likely to be effective in bringing the proceedings to their attention, including e-mail or social media, then the court may authorise service by some other method – so-called substituted service.
Third, judgment debts including costs orders generally cannot be enforced by committal to prison. Sums due under judgments and orders must instead be enforced by other means, such as by freezing orders or attachment orders affecting assets belonging to a party. But opportunities to commit a party for contempt can arise in the course of efforts to enforce by way of disclosure orders or freezing orders where there is a failure to provide relevant disclosure.
In summary, the English courts will not permit a foreign national that has itself invoked the jurisdiction of the English courts to seek to frustrate the exercise of enforcement remedies against that national for breach of relevant court orders or rules, and will be ready to authorise service of documents by a variety of means if the party in question is seen to be taking active steps to avoid service.
*Oliver Smith v. Emile Kirkegaard [2024] EWCA Civ 698
6. Safety support
Telemar, the leading provider of smart maintenance and remote access technologies, has signed an agreement with Genoa-based shipping company Ignazio Messina & C Spa to provide safety services to seven of its existing vessels.
The Marlink Group company will deploy and manage the Global Maritime Distress and Safety System (GMDSS) installation on seven vessels operated by Ignazio Messina & C Spa. Telemar will manage installations onboard Jolly Argento, Jolly Oro, Jolly Rosa, Jolly Giada, Jolly Clivia, Jolly Verde and Jolly Bianco which joined the Messina fleet between August 2023 and April 2024, strengthening the company’s liner services in the Mediterranean, Middle East, Indian, African and European markets.
Telemar will also be responsible for managing and maintaining the radio and navigation equipment onboard, ensuring top level assistance and safety.
The contracts will consolidate service of critical bridge navigation equipment to a single provider, saving time and manpower and reducing the risk of non-compliance as scheduled service will be planned to agreed timeframes rather than carried out on an ‘ad hoc’ basis.
Telemar specialises in Smart Maintenance and management of bridge electronics and safety systems, providing pro-active support with the aim of reducing potential down-time and increasing vessel efficiency.
Benefits for shipowners include streamlining troubleshooting wherever they are operating, Telemar can use the data collected to optimise asset lifecycles and deliver further efficiencies. This can be used to deliver more repairs remotely and increase first-time fixes for a more efficient service when its field engineers visit customer vessels.
7. Anti-dumping
The European Commission announced recently that it will impose anti-dumping tariffs of up to 36.4% on biodiesel imports from China. This is a step in the right direction for limiting imports of dubious used cooking oil (UCO) biofuels, says T&E. But tariffs alone will not be enough to prevent fraudulently mislabeled palm oil from entering the European market, says the group.
Over the past two years, the European biofuels market has been flooded with UCO imports from China, causing a collapse in the market price from around €2,250 per tonne to €1,100. A recent study by T&E showed that collection in China is as much as 30% cheaper than in Europe. Inherent problems with verification and certification mean that much of the UCO entering Europe may also be fraudulently labelled palm oil, a cheap feedstock heavily linked with deforestation.
The EU currently imports more than 80% of its UCO, with China alone accounting for 60% of these imports, According to T&E. Cian Delaney, biofuels campaigner at T&E, said: “Europe is completely over-reliant on unverifiable used cooking oil from distant countries, like China. Restrictions on imports from China are a step in the right direction, however, anti-dumping tariffs alone won’t be enough to tackle UCO fraud. Without a complete overhaul of the certification process, the EU will continue to play out a game of whack-a-mole as fraudsters from other countries will simply fill the gap. The EU needs to stop incentivising unverifiable, imported waste oils and move away from an industry-led verification system towards more stringent regulation”.
8. IMO deliberations
The IMO Council met for its 132nd session from 8 to 12 July 2024 at IMO headquarters in London. Decisions on advancing multilingualism, improving the Global Integrated Shipping Information System (GISIS) and supporting the sustainability of the IMO Member State Audit Scheme were also taken.
For more information see the IMO website.
9. Deemed fulfilment
Brian Perrott and Colin Chen of Holman Fenwick Willan have been exploring deemed fulfilment in the firm’s online newsletter London Calling.
King Crude Carriers SA v Ridgebury November LLC [2024] EWCA Civ 719
The Court of Appeal has held that a party cannot rely on an unfulfilled condition precedent to avoid paying a debt if the non-fulfilment was caused by that party’s breach.
Under contracts for the sale of second-hand tankers, the buyers were obliged to provide an escrow agent (HFW Greece) with documents to enable the opening of escrow accounts. The
Buyers were to then pay 10% deposits into those accounts.
The buyers breached the contracts by failing to provide such necessary documents without delay. The Sellers terminated the contracts and sought to recover the deposits as a debt.
The court considered whether the Sellers were entitled to be placed in the position they would have been in if the condition precedent had been fulfilled or dispensed with.
The court held that a principle does exist under English law whereby an obligor cannot rely on the non-fulfilment of a condition precedent to its debt obligation if its breach of contract caused the non-fulfilment. For this principle to apply, such that a condition precedent will be deemed to be fulfilled or dispensed with, there must be:
(i) an agreement capable of giving rise to a debt rather than damages;
(ii) an agreement that the debt will accrue or be payable subject to fulfilment of a condition precedent; and
(iii) an express or implied agreement that the obligor will not do something that prevents the condition precedent from being fulfilled, such that the debt does not accrue or become payable.
Some exceptions to this principle, however, include that:
(i) the condition precedent is the performance of a principal obligation; and
(ii) it is possible to expressly or implicitly contract out of the principle.
Comment
This case generally demonstrates that a party should not be allowed to take advantage of its own wrongdoing. The principle outlined above is said to reflect parties’ presumed contractual intentions. As noted by Nugee LJ, what the parties surely intended in this case is that opening the escrow accounts was to be preliminary to paying into them, and not to allow the Buyers a choice as to whether to pay and to leave the Sellers to claim for damages (as opposed to debt).
10. Container spike
The dramatic spike in the ocean freight container shipping market is reaching its peak as importers push back against spiralling spot rates. Data released by Xeneta recently shows average spot rates from the Far East to US East Coast increased by 3.7% on 15 July to stand at USD 10 045 per FEU (40ft equivalent shipping container). Into the US West Coast, spot rates increased by 2.0% to stand at USD 8 045 per FEU.
While this means spot rates are up almost 150% on these trades since the end of April, the latest increases of 3.7% and 2.0% are far smaller compared to 1 July when rates rose by 22% into the US East Coast and 12% into the US West Coast.
Emily Stausbøll, Xeneta Senior Shipping Analyst, said: “Xeneta data shows some ocean container carriers are still pushing spot rate increases in mid-July, but, for the first time in a long time, some carriers are offering lower spot rates.
“Crucially, this suggests a growing level of available capacity in the market and shippers can once again start to play carriers off against each other – instead of feeling they need to pay whatever price they are offered to secure space. As the balance of negotiating power starts to swing back towards shippers, we should see spot rates start to come back down.”
The clearest indication of a peak being reached is found in the Xeneta market ‘mid-high’ data, which identifies the spot rates being paid by shippers in the 75th percentile of the market.
On the trades from the Far East into US, the market mid-high (and high) spot rates have remained almost flat during July, indicating the high end of the market is no longer spiralling.
Stausbøll said: “A flat market mid-high means a growing number of shippers and freight forwarders no longer feel they need to pay spot rates at the upper end of the market to ensure their containers are transported.
“This is the first crack in the dam because it means carriers are no longer dictating which containers to load – but rather having to lower rates to secure volumes. If these carriers want to compete and retain market share, then they need to lower their own prices.”
The market is also reaching a peak on fronthaul trades from the Far East to North Europe and Mediterranean where average spot rates increased by 4.7% and 3.5% on 15 July to stand at USD 8 480 per FEU and USD 8 150 per FEU respectively. This is less than the increases of 17% and 10% on 1 July.
“It has been a painful time for shippers who have been forced to pay spiralling spot rates and faced the prospect of being unable to ship their cargo on existing long term contracts.
“Signs of the spot market reaching a peak will be welcomed by shippers, but it does not mean an end to their troubles.
“Port congestion is easing, more ocean container shipping capacity is becoming available, and it looks likely the frontloading of imports seen earlier this year will mean a slacker traditional Q3 peak season then there would have otherwise been.
“However, spot rates remain up by just under 400% from the Far East into the US West Coast since mid-December last year, by more than 300% into the US East Coast and 455% into North Europe. Perhaps the market has reached a peak, but shippers are still paying hugely elevated costs.
“The fundamental cause of the market spike in 2024 is the conflict in the Red Sea, with the majority of container ships continuing to sail around the Cape of Good Hope. Unless there is a large-scale return of container ships to the Suez Canal – which seems unlikely at present – then the situation cannot be fully resolved.
“However, as we saw during March and April, it is possible for the spot market to soften while the Red Sea diversions are in place, and this is what shippers will be hoping for in the remainder of 2024.”
11. ISU statistics
The International Salvage Union, has recently published salvage industry statistics for 2023.
Key figures include:
- Gross revenue for ISU members – US$ 398 million (2022, US$ 241 million)
- 184 services provided (2022, 149 services)
- Lloyd’s Open Form (LOF) – 16 cases (2022, 26). LOF revenue down at US$ 29 million (2022, US$ 66 million)
- Wreck removal income – US$ 193 million from 30 services (2022, US$ 55 million from 32 services).
All numbers are gross income from which all the contractors’ costs must be paid. Numbers are for income in the year received not the year when the service was provided. ISU President, John Witte, said: “The 2023 ISU statistics show a modest recovery compared with the historically low level in 2022. Emergency response services generated US$ 196 million split between LOF, US$ 29 million, and other contracts, $167 million.
“Wreck removal income has rallied rising to US$ 193 from the very low level of US$ 55 million in the previous year. Wreck removal income is important for our members and this is a welcome increase. It brings the split of the industry’s income back to the typical levels of approximately 50:50 between emergency response and wreck removal income.”
The 2023 ISU statistics show a historic low level of LOF cases – 16 for ISU members – generating income of US$ 29 million. This is by some degree the smallest number of both LOF cases and income in the past 30 years. Revenue from LOF cases amounted to 15 per cent of all emergency response revenue and LOF cases accounted for 10 per cent of emergency response cases in 2023. SCOPIC revenue at US$ 9 million in 2023 was down from US$ 21 million previously.
Witte added: “The very small number of LOFs for our members in 2023 is extremely disappointing but sadly reflects a long-term downward trend that most observers are well aware of. ISU has worked closely with Lloyd’s and other stakeholders in the past three years to find ways to revive LOF. We promote its use and we believe that income based on awards under Article 13 of the Salvage Convention must remain the cornerstone of funding for our industry but this is increasingly difficult as these statistics so dramatically demonstrate.” Revenue in 2023 from operations conducted under contracts other than LOF was US$ 167 million. The average revenue from each non-LOF contract was US$ 1.2 million.
Wreck removal is an important source of income for members of the ISU and in 2023 there was US$ 193 million from 30 operations. Witte added: “Professional salvors protect the environment, reduce risk and mitigate loss. They also keep trade moving – which is demonstrated so clearly when there are large containership cases like the Baltimore bridge incident earlier this year. We continue to work closely with key stakeholders to ensure that there is global provision of professional salvage services.”
The ISU statistics are collected from all ISU members by a professional third party, which aggregates and analyses them. The statistics do not include the revenues of non-ISU members but are the only formal measure of the state of the marine salvage industry. The statistics are for income received in the relevant year but that can include revenue relating to services provided in previous years and there can be an element of “time lag”. The statistics are for gross revenues from which all of the salvors’ costs must be met.
12. LOF
Lloyd’s has published a new edition of Lloyd’s Open Form (LOF) – it comes after a two year process to review the workings of the contract with the objective of increasing its use.
There have been several initiatives that have come from this review, such as a requirement for users of LOF to provide Lloyd’s with ESG data for every LOF. It is hoped that this will help to demonstrate the ESG benefits that using the form brings to owners and insurers. It will also be a requirement for the parties to settled cases to provide information about the settlement. This will be handled anonymously by Lloyd’s and aggregated to give some evidence about the cost of using the form that is presently only available from published awards.
There is to be a programme of education about the contract’s use in Asian markets and also all awards from arbitrators will be published and available to anyone. The main change with LOF 2024 is in regard to the associated Lloyd’s Salvage Arbitration Clauses 2024 as referred to in Clause “I” of the revised Lloyd’s Open Form. The changes to the LSAC 2024 chiefly relate to the new Fast Track Documents Only (FTDO) arbitration which will apply by default to all LOF 2024 contracts where the security sought by contractors is less than US$ 10 million.
It means that the great majority of cases could now be arbitrated under this FTDO system which carries with it new rules regarding the amount of material that parties can submit. Parties will still have the right to apply to the arbitrator in all cases to have a full oral hearing, but it will be the arbitrator’s decision whether or not to grant that request. Such decision depending on, for example, whether the services were complex. There is also a revised schedule of recoverable costs which are capped at £75,000. Lloyd’s objective is to speed up and reduce the cost of arbitrations which some saw as an impediment to more use of LOF.
ISU remains a strong supporter of Lloyd’s Open Form and believes that revenue from awards based on Article 13 of the 1989 Salvage Convention is essential to ensure the industry is adequately funded so that it can provide professional emergency response and salvage services around the world. ISU has serious reservations about the new FTDO system and pressed for a lower security threshold and also wanted the automatic right to have an oral hearing in complex cases and those rare cases where there are allegations of incompetence or bad faith on the part of the contractor. There are also concerns about the apparent mismatch in the relative overall size of allowable submissions.
ISU believes that it was not treated fairly during the process and its legitimate views were largely disregarded. Nevertheless it says it continues to support and promote the use of Lloyd’s Open Form 2024. It will be monitoring closely the working of the FTDO and behaviour of other parties under the new system and shall seek early review and modifications if, in practice, it proves to be unsatisfactory for ISU members. ISU believes that its members should have the freedom to contract however they choose. It is therefore up to individual members of the association to familiarise themselves with the detail of LOF 2024 and the LSAC 2024 and to take the necessary advice about its use or alternatives.
13. In memoriam
In its recent Salvage World publication the ISU brought attention to the recent deaths of two of its members who both provided many years of dedicated service to the salvage industry. We reproduce here the newsletter report.
Kees Muller
It was with great sadness that ISU learned of the passing of Kees Muller in April. Kees, husband of 57 years to Heleen, was 79 years old and had been ill for a considerable period of time. He was co-founder of Multraship and his career in towage and salvage spanned six decades, having started in the family shipping business in the early 1960s. Over the years he was involved in hundreds, if not thousands, of salvage and rescue operations and, together with Heleen he was pivotal not only in developing Multraship, but also the wider towage, salvage and shipping industry.
Kees Muller was always a creative thinker and as well as his operational experience he was the driving force behind the development of the revolutionary Carrousel Rave Tug (CRT). He was a passionate and powerful maritime ambassador and he was honoured with a Dutch knighthood – Ridder in de Orde van Oranje Nassau – in 2011. Besides his exceptional entrepreneurial and specialist tug and salvage skills, he was widely known for his charismatic personality and described as a true “people’s person” with a love of sailing, music and entertaining; many will remember him livening up the room wherever there was a piano to be played. The family said: “We will be forever grateful for all that he did for us and are so proud of him and we intend to continue his legacy.”
Mike Lacey
It was also with great sadness that ISU learned of the passing of Mike Lacey at the age of 81. He was Secretary General of ISU from 2006 – 2012. However he had a 33 year association with ISU providing legal advice and working on its behalf on numerous conventions, documents and contracts. Mike grew up in in the south of the UK and went to sea as a deck cadet and then officer in one of the UK’s traditional shipping lines. He served in merchant vessels mainly operating routes to Australia and New Zealand.
After coming ashore Mike worked as a lawyer and became an authority on Lloyd’s Open Form and casualty matters working particularly for Greek salvors. He worked for Shaw and Croft which was later taken over by HBJ Gateley Wareing. Mike was closely involved in many major developments and revisions of LOF, starting as a member of the LOF Working Party from 1978 onwards and he was one of the creators of the “Tanker Safety Net” in LOF80, and then worked on the 1989 Salvage Convention and its Article 14, LOF90 and subsequently LOF2000 and SCOPIC.
It was Mike who came up with the development of the revolutionary name SCOPIC. Mike said: “One night in January 1998 I was in the bar of the Royal Horseguards Hotel waiting for Arnold Witte and Archie Bishop. I was doodling on a beer mat and came up with the term “SCOPIC” and that name stuck. I should have got the copyright on it! Geoffrey Brice had been proposing GREPIC – Guaranteed Remuneration from the P&I Clubs.”
Mike also worked on BIMCO towage and wreck contracts along with ISU executive committee members. Mike also had direct salvage experience for he broke away from legal matters for a period to join United Towage in Hull in the early 1980s where he was managing director and became well known to many in the salvage sector who are still active in the industry.
Notices & Miscellany
ABP
The Board of Associated British Ports (ABP), has announced the appointment of Jonathan (Jon) Lewis as its Chairman in succession to Dr Phil Nolan who has decided to stand down from the role.
Jon brings decades of business leadership experience, predominantly in major infrastructure sectors such as energy, engineering and construction. He has held CEO roles at AmecFosterWheeler plc and, most recently, Capita plc, where he led both organisations through periods of growth and transformation. Jon is currently a Non-Executive Director of Equinor, a global leader in the energy transition, where his role includes being Chairman of the Safety, Sustainability and Ethics Committee.
IRS
The Indian Register of Shipping (IRS) has announced leadership appointments to further strengthen its management team. At a recent meeting, the Board of Directors approved the appointment of P.K. Mishra as Managing Director and T.K. Sahu as Joint Managing Director, effective August 1, 2024.
Energios office
Singapore ship management company Energios has announced the opening of their new office in Manila, to source local seafarers for Bergen-based Norwegian short-sea shipping specialist, Wilson ASA.
The service agreement sees Energios opening its second crewing office in Asia, after Mumbai, to provide Filipino crew for multi-purpose vessels operated by the Norwegian owner. Energios obtained their licence in Manila to “recruit, process and deploy sea-based workers” and will complement Wilson Ship Management’s existing crew strength on board their 130 strong fleet with local seafarers.
Greenwich event
National Maritime, in partnership with the University of Greenwich, will host a two-day conference and exhibition exploring sustainable practices and business opportunities in the maritime realm. The 4th Society & the Sea International Conference 2024 will take place on 9th and 10th September 2024 in the UNESCO World Heritage Site of Maritime Greenwich.
The theme of the conference is ‘To be truly blue, we must also think green: developing a sustainable blue economy needs both environmental protection & economic activities to go hand-in-hand.’
A dual-themed ‘green and blue’ agenda will explore the strategies required to develop a sustainable blue economy. The ‘Green Waves’ conference stage will focus on energy transition and sustainability in the maritime and coastal arena. The ‘Blue Invest’ conference stage will explore business opportunities and the societal benefits that can be leveraged through supply chain collaborations.
The conference will bring together industry leaders and key political stakeholders to give insightful presentations across a wide range of subjects to foster learning, inspiration and conversations that matter. The speaker lineup includes CEO and managing director of NatPower UK, Stefano Sommadossi, and Tees Valley Mayor Ben Houchen.
Other key speakers include industry leaders from the Celtic Freeport and Freeport East, the UK Marine Energy Council, Zero Emissions Ship Technology Association (ZESTAs), The Crown Estate, the Port of London Authority, BMT, Bureau Veritas, Lloyd’s Register, Marine Zero, OceanMind, SeaRegs Training, pH3 Capital, HMM (Europe) Ltd, Solis Marine Engineering and Formula E. See full speaker line up here: https://www.nmdg.co.uk/socsea24/agenda/.
Autonomous Ships 2024 International Conference
This is set to be held on 20-21 November 2024 in Copenhagen.
The rapid technological development in the field of maritime autonomy is creating an opportunity for the marine industry as well as a challenge for the regulatory framework. In recent years, various ships projects involving coastal and ocean-going routes with different degrees of autonomy are being tested. Those will have great implications for naval architects, shipbuilders, shipping companies, and maritime systems providers.
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West promotion
On 1 July, West promoted Katy Shearer to Chief Risk Officer and appointed her to the Management Board of Directors. This decision represents Shearer’s strong contributions to the business and the importance the Club places on the increasingly complex risk landscape across all sectors of the business.
The shipping industry continues to face significant uncertainty and volatility, including increasing geopolitical risks and ongoing regulatory and compliance challenges which places more scrutiny on all Clubs, as well as the wider marine insurance sector. West has therefore acted to prioritise its risk management capability aligning it with the strategy of the business, ensuring its central to all management decisions at Board level.
A Practical Guide to Shipboard Inspections
Shipboard Inspections is out now and available to buy in e-book, with print copies to follow. This guide helps ship’s officers, crews and superintendents prepare for all types of inspections and understand how they interlink, including flag state, port state control, class and masters’ inspections.
All ship types across the industry are subject to various kinds of inspections—from flag state checking that ships comply with international and national standards to third-party inspections requested by charterers. Preparing for these inspections helps shipping companies ensure their ships navigate the seas safely, on schedule and in a manner that protects the marine environment.
A Practical Guide to Shipboard Inspections is a comprehensive guide to implementing a systematic approach to inspections for all ship types. From the moment an inspector boards through to the filing of the inspection report, this first edition walks readers through each stage of more than seven different kinds of inspections, including:
- Port state
- Flag state
- Class
- Port health
- Masters
- ITF inspections and more.
Developed using extensive interviews with current inspectors, this guide helps officers, crews and superintendents better understand how to:
- Work effectively with inspectors and surveyors
- Prepare for each type of inspection
- Identify what aspects of their ship needs further improvement before an inspection
- Dispute deficiencies in an appeals process and
- Deal with corruption during an inspection.
A Practical Guide to Shipboard Inspections not only collects the most common deficiencies across port state control regimes in one place but also suggests what specific actions ships should take to help reduce these deficiencies. A chapter on masters’ inspections details the weekly checks to help spot potential findings and close them out before other inspections. Firsthand tips from inspectors and practical checklists for port state control, flag state, class and masters’ inspections are also provided to help ensure each and every on board inspection goes smoothly.
The guide is priced at £180. For the full contents list, foreword and more details, visit the ICS Publications website.
FIND OUT MORE AND ORDER
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)
WHY DOGS ARE BETTER THAN MEN
Dogs do not have problems expressing affection in public.
Dogs miss you when you’re gone.
Dogs feel guilt when they’ve done something wrong.
Dogs don’t criticize your friends.
Dogs admit when they’re jealous.
Dogs are very direct about wanting to go out.
Dogs don’t laugh at how you throw.
Dogs don’t feel threatened by your intelligence.
You can train a dog.
Dogs are easy to buy for.
You are never suspicious of your dog’s dreams.
The worst social disease you can get from dogs is fleas. (OK. The really worst disease you can get from them is rabies, but there’s a vaccine for it, and you get to kill the one that gives it to you.)
Dogs understand what no means.
Dogs understand if some of their friends cannot come inside.
Middle-aged dogs don’t feel the need to abandon you for a younger owner.
Dogs admit it when they’re lost.
Dogs aren’t threatened if you earn more than they do.
Dogs mean it when they kiss you.
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 week 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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