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Shipping E-Brief July 2016

News / 08-07-2016 / London

The Shipping E-Brief is a quarterly publication providing you with key information on legal decisions and developments in shipping and related business areas.

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Missed a previous edition? Read them here:

Shipping E-Brief April 2016

Shipping E-Brief February 2016

Chris Kidd

Chris Kidd Head of Shipbuilding and Offshore Construction, Joint Head of Energy & Infrastructure, Partner

Christian Dwyer

Christian Dwyer Global Head of Admiralty

Wai Yue Loh

Wai Yue Loh Partner and Chief Representative of Beijing Office, Beijing, Partner, Hong Kong and Joint Managing Director, Singapore

Simon Cooper

Simon Cooper Consultant

David Choy

David Choy Managing Associate

Iain Preston

Iain Preston Claims Executive

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Featured news & insights

News / Supreme Court clarifies scope of agency under charterparty

07-07-2016 / Maritime

NYK Bulkship (Atlantic) NV v. Cargill International SA (Global Santosh) [2016] UKSC 20 The Supreme Court has recently handed down a significant judgment clarifying vicarious performance under a charterparty and the scope of responsibility of charterers’ agents.

Supreme Court clarifies scope of agency under charterparty

News / Supreme Court upholds bunker suppliers’ right to be paid where property did not pass

07-07-2016 / Maritime

PST Energy 7 Shipping LLC and another v. OW Bunker Malta Ltd and another (Res Cogitans) [2016] UKSC 22 In a judgment handed down on 11 May 2016, the Supreme Court has upheld the Court of Appeal decision dated 22 October 2015 and confirmed that bunker suppliers who were unable to transfer property in bunkers supplied to a ship were nonetheless entitled to the price of the bunkers from the ship-owners (the “Owners”).

Supreme Court upholds bunker suppliers’ right to be paid where property did not pass

News / Time charter ”trip”: a red herring?

07-07-2016 / Maritime

SBT Star Bulk & Tankers (Germany) GmbH & Co KG v. Cosmotrade SA (Wehr Trave) [2016] EWHC 583 (Comm) The judgment in this case addressed the appeal of a preliminary issue in an arbitration as to whether or not the Charterers had the right under the charter to order the vessel to perform a second voyage, despite the vessel already having completed one voyage or “trip”. The Court found in favour of the Charterers, emphasising that a trip charter is a time charter, where a vessel is taken on hire for a period of time rather than chartered for a single voyage from one area to another. During this time, the vessel remains under the directions and orders of the Charterers in respect of its employment. The use of the word “trip”, then, is misleading and a “red herring”.

Time charter ”trip”: a red herring?

News / Fit for purpose obligations in shipbuilding contracts

07-07-2016 / Maritime

Neon Shipping Inc v. Foreign Economic 7 Technical Corporation Co. of China and China Chang Jlang National Shipping Group Corporation Jinling Shipyard [2016] EWHC 399 (Comm) Vessels are often built for the purpose of well-known standardised trades. A recent Commercial Court decision, which also highlights the importance of giving notice of guarantee claims in good time, considered whether fitness for purpose obligations can be implied into shipbuilding contracts where a vessel is built for use in a standardised trade that is well-known to, and understood by, both the buyer and the builder.

Fit for purpose obligations in shipbuilding contracts

News / York-Antwerp Rules 2016: a welcome compromise after 22 years of controversy?

07-07-2016 / Maritime

On 6 May 2016, the Comité Maritime International (“CMI”) approved a revised version of the York-Antwerp Rules (YAR). This is the first such revision in 12 years and may prove to be a significant evolution of the rules used by general average adjusters. Although many aspects of the 1994 YAR remain, there are significant amendments (for example, to interest rates, adjustment procedure and the time limit for claims) that should be welcomed by supporters of the 2004 YAR.

York-Antwerp Rules 2016: a welcome compromise after 22 years of controversy?

News / Could P&I Club be directly compelled by beneficiary of LOU to increase amount of security?

07-07-2016 / Maritime

FSL-9 PTE Ltd and another v. Norwegian Hull Club (FSL New York) [2016] EWHC 1091 (Comm) The Owners in this case were provided with a letter of undertaking (the “LOU”) from the Charterers’ P&I Club, (the “Club”). The Owners subsequently requested additional security, arguing that the wording of the LOU allowed for the amount of security to be adjusted as it gave both the Owners and the Charterers “liberty to apply” if the security proved insufficient. The Commercial Court held that, on the true construction of the LOU wording, the Owners were limited to seeking additional security from the Charterers only and not from the Club.

Could P&I Club be directly compelled by beneficiary of LOU to increase amount of security?

News / Court of Appeal upholds anti-suit injunction to deny right of direct action against Club

07-07-2016 / Maritime

Ship-owners' Mutual Protection and Indemnity Association (Luxembourg) v. Containerships Denizcilik Nakliyat Ve Ticaret AS (Yusuf Cepnioglu) [2016] EWCA Civ 316 The Court of Appeal has upheld an anti-suit injunction preventing cargo interests from pursuing a direct right of action against a P&I Club (“the Club”). In dismissing the appeal, the Court reinforced its commitment to protecting the Club’s contractual right to London arbitration, in priority to a direct right conferred by Turkish law.

Court of Appeal upholds anti-suit injunction to deny right of direct action against Club

News / No permission to appeal despite parties’ agreement

07-07-2016 / Maritime

St Shipping & Transport Pte Ltd v. Space Shipping Ltd (CV Stealth) [2016] EWHC 880 (Comm) This shipping dispute dealt with whether and when it is necessary to obtain the Court’s permission to appeal against an arbitration award on a point of law in circumstances where the parties have already agreed between themselves to allow an appeal.

No permission to appeal despite parties’ agreement

News / Get the procedural steps right when commencing arbitration

07-07-2016 / Maritime

Sino Channel Asia Ltd v. Dana Shipping and Trade Pte Singapore and Dana Shipping and Trading SA [2016] EWHC 1118 (Comm) The Commercial Court has recently held that an arbitration award was made without jurisdiction and that the Tribunal was not constituted properly because a notice of arbitration was not validly served. This case provides a timely reminder to those entering into charterparties or other shipping contracts that provide for the arbitration of disputes to ensure that they comply with the requirements for commencing and giving notice of arbitration to the other side. While the formalities of service in arbitration proceedings are more flexible than the court regime for service, it is still necessary to ensure that a party is served properly.

Get the procedural steps right when commencing arbitration

News / Damages for late payment of claims: the Enterprise Act 2016 – what is it all about?

07-07-2016 / Insurance, Maritime

On 4 May 2016, the Enterprise Bill received Royal Assent and became the Enterprise Act 2016. Part 5 of the Enterprise Act contains provisions that will amend the Insurance Act 2015 to provide that (re)insurers must pay sums due within a reasonable time. Policyholders will have the opportunity to claim damages if a (re)insurer’s unreasonable delay causes additional loss. The provisions will come into force on 4 May 2017 and will apply to all insurance and reinsurance contracts entered into on or after that date.

Damages for late payment of claims: the Enterprise Act 2016 – what is it all about?