The English High Court recently confirmed when it will order the sale of liened cargo which is the subject of arbitration proceedings. This decision may be of interest to shipowners that are faced with a situation in which cargo belonging to a charterer remains on board a vessel for a long period without the owners receiving hire, while still incurring operating costs.
In some transactions, a non-Norwegian company may wish to register its ship with the Norwegian International Ship Register. This can be done only if the ship is managed by a shipping company that has its head office in Norway. This requirement has a bearing on the contractual structures and financing schemes that can be put in place and also raises issues concerning enforcement.
A recent Court of Appeal decision overturned the High Court judgment against the time charterers of a ship, reinstating the arbitration award in their favour. The decision has added another reason for delaying a final assessment of the loss of profit on a repudiated long-term charter by waiting to see whether the owners will sell the vessel.
The Supreme Court recently handed down its judgment in New Flamenco (Globalia Business Travel SAU of Spain v Fulton Shipping Inc). In this long-awaited decision, the court considered whether a benefit obtained by the owners relating to the sale of the vessel following the charterers' repudiatory breach of a charter should be taken into account in assessing the damages that the owners were entitled to recover.
A recent Commercial Court decision held that a charterer is 100% responsible under the Inter-Club Agreement for damage to cargo arising from an order to the vessel to delay discharge until the receivers are able to pay for the cargo. Given that it is common for shipments to be delayed, more disputes relating to deliberately delaying discharge can be expected in the future.
The Supreme Court recently handed down a judgment addressing three issues of importance to shipowners, charterers and insurers alike, defining the parameters of the safe port undertakings, the rights of subrogation of insurers where vessels are operated under bareboat charter and the right of charterers to limit their liability under the Convention on the Limitation of Liability of Shipowners.
The Supreme Court recently clarified a number of unsettled issues that will have an impact on other wreck removal cases, including whether vessel owners can use their right to limit liability as a defence against a wreck removal order. Among other things, the decision has clarified the highly disputed interpretation of the relationship between owners' duty to take action and their right to limit liability.
A year and a half after the entry into force of the Nairobi International Convention on the Removal of Wrecks, the Ministry of Transport has completed a consultation process on a proposal to ratify the convention and implement it into Norwegian law. The ministry has suggested that the convention be implemented on a dual basis, alongside existing legislation.
In a recent case, the Court of Appeal decided unequivocally that missing a single instalment of hire under a time charter is not a breach of condition. In other words, there is no right to terminate for one missed instalment and claim damages for loss of bargain – usually the difference between the charter and market rate for the remainder of the charter period. The court also set out useful guidance on what constitutes 'renunciation' (anticipatory repudiatory breach) of a time charter.
Two recent London decisions involving shipping companies have highlighted problems that can be encountered when starting an arbitration. The first decision concerned an issue with identifying whether a non-signing counterparty is bound by the agreement containing the arbitration clause. The second decision concerned the question of which parties are authorised to accept service of arbitration notices.
Since arbitration requires agreement between the parties, a third party is not normally bound by, or entitled to invoke, an arbitration clause. However, there are exceptions to the rule. It is recommended, when drafting arbitration clauses, to take into account not only the position of the contractual parties, but also the position of possible third parties, since this may reduce or avoid the risk of difficult procedural questions that may arise if claims are later made by or against a third party.
A recent Court of Appeal decision acknowledges the difficulties of laying down general principles of law in connection with an innocent party's obligation to mitigate its loss following a repudiatory breach of contract. The case arose in the context of assessing damages for early redelivery where there was no available market at the time of the breach against which to measure the loss.
The Supreme Court has handed down judgment in the long-running OW Bunkers case. The decision is unlikely to be welcomed by owners, which now face the prospect of having to pay twice for bunkers: once to their immediate supplier, which may be insolvent, and again to the physical supplier of the bunkers.
Norway and Brazil signed a memorandum of understanding in November 2015 to enhance cooperation within the area of maritime transport. The memorandum is in line with the Norwegian government's long-term cooperation strategy for Brazil and is intended to increase both public and private sector cooperation and awareness to create mutual economic opportunities and promote investment.
A recent arbitration decision raises a number of interesting points in connection with lay-up agreements and how much can be claimed for continuing to provide services after the original contract has been terminated. It will be of interest to parties that see their unpaid charges increasing, as well as to other involuntary bailees, such as vessel owners left holding cargo with no bills of lading binding them after their charterers have ceased operations.
The civil law concept of force majeure is well established in Norwegian law, covering scenarios such as natural disasters, severe weather and war. It is recognised as both a statutory and contract term. However, although there is extensive practice and doctrine on force majeure clauses, a lack of clarity remains regarding what constitutes force majeure and what the effects of such situations are.
Unlike many civil law countries, there is no implied application of the doctrine of force majeure under English law. Rather, the treatment of an event of force majeure comes from the contract. It is usual for English courts to apply contracts strictly, according to their wording and respecting the parties' freedom to contract on terms they see fit.
In a potentially problematic decision, the Court of Appeal recently upheld a High Court judgment that a contract to supply bunkers on credit terms, with a retention of title clause in favour of the sellers until full payment but with permission to consume the bunkers (or some of them) before payment was due, was not a contract for the sale of goods under the Sale of Goods Act.
As the Norwegian aquaculture industry continues to grow, so does demand for well boats. These sophisticated vessels not only transport fish, but also undertake complex tasks such as delousing and sorting fish. Damage to or loss of the fish handled by these vessels can result in substantial losses. Therefore, owners and charterers of well boats should regulate the risks associated with such services in their charterparties.
In a dry bulk market where a charterer is not paying freight or hire, its counterparty is often left to consider whether it can lien the cargo on board the chartered vessel to obtain payment. When it comes to liening cargo under a Congenbill, English law will look first to the head voyage charterparty as the source of relevant terms to be incorporated into the Congenbill, unless another charter is expressly identified. This can lead to a less-than-obvious outcome.