Wednesday, August 3, 2016

The Dark Side of Shipping


Came across an interesting article about “Slavery at Sea” which rekindle an event that happened more than 30 years ago where I was brought into the fray of identical situation. Would have thought that in this modern age of 2016, such incidents were a thing of the past.

This is my story.

Arresting a vessel via “in rem” action to compel payment of crew wages can be easy but yet tricky. You peruse the evidence, consider the merits, watch the time bar, get all the relevant crews to sign affidavits and what-not, obtain information on the vessel and its whereabouts (though not as expeditious as present day). File the necessary court papers.

Arresting a vessel via “in rem” action to compel payment of crew wages can be easy but yet tricky. You peruse the evidence, consider the merits, watch the time bar, get all the relevant crews to sign affidavits and what-not, obtain information on the vessel and its whereabouts (though not as expeditious as present day). File the necessary court papers.

Once the vessel is inside territorial waters, the arrest is executed by the Court’s Sheriff (prudence dictate that one should have a marine surveyor along to pre-empt jurisdictional challenge). The ship-owners will have to put up security (usually banker’s guarantee) or make payment into court if they want the vessel to be released urgently. Owner’s lawyers will try preliminary challenge by splitting hairs on legal technicalities like bad service, wrong party, wrongful arrest or jurisdiction issues. If your clients’ case is a humbug, they will file an application to strike out the action.

After all avenues for amicable settlement are closed, the next process is to get a court order for sale of the vessel [i.e. in legal jargon, an order for appraisal and sale of the vessel pendente lite. In between, there may be some astonishing surprises.

Take this scenario - Crews (mainly Burmese and the rest from other countries) have not been paid their wages for between 6 to 12 months. They have little or no monies at all. To ensure that they are telling the truth, I “interrogate” them, got them to sign statements and scan all their papers to verify.

To arrest a vessel you have to deposit about US$ 10,000 (in the 80’s) into court for the sheriff charges and whatever. After arresting the vessel, you must deposit additional sums to sustain the vessel’s bunkering and the crew until the action is heard. Well, you could be looking at US$30K or more out of pocket (not including your fees). Now, unless you are prepared to do a pro bono (“no cure no pay” or plain stupidity), these guys are left high and dry. Some legal system does not encourage pro bono as it is akin to touting. Luckily you have a wealthy partner in a generous mood: the Good Samaritan.

The papers are prepared. Actually, I only draft the statement of claim and affidavits. The bulk of the papers are prepared by an “unsung hero” of the litigation department, our court clerk. Being an expert at court papers and procedures, she prepares and files the papers for the arrest of the vessel, ensuring that they are stamped and served correctly.

Fast forward and the Sheriff of the High Court has placed the vessel under arrest. A crew member informed you that the ship-owners had kept all of the crews’ passports citing for administrative requirements. I had a lurking suspicion and premonition about this. Looking up the 36 Strategies for enlightenment becomes a necessity. I made some plans.

On a Saturday afternoon, (after working hours), I received a call from one of our “agent” informing me that all the crews have been taken from the vessel and huddled into the Immigration department. From information received, it appears that they were awaiting repatriation to the next neighbouring country by the generosity of the ship-owners. A devious tactic indeed: Kill with a borrowed knife - 36 Strategies Number 3.

If indeed the crew were repatriated and the ship-owners should contest the case, I was going to have a hard time getting the crews back to testify in Court. Without the crews’ testimony in Court, I could suddenly hear this inner voice from the Bench: “Action dismissed with costs”. Our deposit and costs are fried.

Most importantly, as the vessel is under arrest, all the crews on board are under the custody and jurisdiction of the High Court. Was this intended repatriation carried out with the consent of the Courts?

I went to the Immigration Office where I was told that ship-owner has signed off the crews and was going to fly them off to a neighbouring country. The frightened crews are in a daze. Once they are sent to a neighbouring country, it will be difficult for them to get home…no monies. Their freedom, overdue wages to feed their wives and children were on my shoulders. But their Gods answered. I speak politely and firmly to the relevant immigration officer. Officer, I am acting for the crews of the vessel named “XXX”. They are claiming arrears of wages from the ship-owners and pursuant to our application the High Court have placed the vessel under arrest in Admiralty in Rem XYZ. (I produce copies of the court papers). As such the said vessel and all the crews on board are under the custody and jurisdiction of the High Court. Please confirm that you will release the crews back to the vessel. You may wish to clarify with the court on Monday: Entice the tiger to leave its mountain lair [36 Strategies No, 15].

Silence…then two hours later the crews were back on the vessel...some fishing.
Who planned this “unorthodox move”? Was it the ship-owner, their lawyers or an invisible hand? To cut a long story short…in the days that followed, things got a little personal and interesting.

I was lampooned and intimidated by counterparty lawyers with all kinds of spurious allegations and what have you. Such correspondence will usually arrive towards the end of the day (presumably to stress and spoil your evenings; which I find quite amusing and pathetic). Out in open, (in the presence of the judges), they don entirely different personality and somehow radiate friendly disposition.
The crews finally got nearly 100% of their monies with interests.

It is up to the Industry and Government to improve the plight of seafarers and deter other forms of slavery - but will they talk-discuss-talk-discuss-talk or will they care?

Caveat: Any similarity to actual events or entity, is purely coincidental. All entities and events depicted in this article are entirely fictitious. Any similarity to actual events or entity is purely coincidental.

Friday, May 27, 2016

Drilling Rig Hire Contract - Are wasted spread costs considered “consequential losses” within the context of a contractual exclusion clause?

Transocean Drilling UK Limited v Providence Resources PLC [2016] EWCA Civ 372.

Transocean (Owner of the rig ‘GSF Arctic III’), entered into a drilling contract with Providence for the hire of a semi-submersible drilling rig. The contract was based on a standard industry agreement ‘LOGIC’ form, with agreed adaptions. There was a loss time of over 27 days due to defects in the rig and also a further 10 hour’s delay because of failure of a crew to tighten a blanking plug properly.

Consequently, there were various disputes between the parties pertaining to remuneration payable to Transocean in respect of what became known as the ‘disputed period’. Providence claim against Transocean for spread costs, comprising the costs of personnel, equipment and services contracted from third parties, which it alleged were wasted as a result of the delay.

At first instance, Mr Justice Popplewell (“the Judge”) held that Transocean was in breach of contract and that Providence was entitled to recover the spread costs. Transocean’s appeal against the latter part of the Judge’s decision as they content that spread costs were excluded by virtue of Clause 20 of the contract.

Clause 20 - Clause 20 defined Consequential Loss as “ . . . loss of use (including, without limitation, loss of use or the cost of use of property, equipment, materials and services including without limitation, those provided by contractors or subcontractors of every tier or by third parties), loss of business and business interruption . . . “.

The closing paragraph of Clause 20 (ii) subparagraph 3 provides that the each of party was to “save, indemnify, defend and hold harmless” the other for its own consequential loss.

The Court of Appeal (“CA”) had to decide whether wasted spread costs incurred by Providence as a result of Transocean’s breaches of contract are “consequential losses” within the meaning of clause 20”.


Thursday, May 26, 2016

Ship Construction - Defects Warranty - Plausible claim or a tabula in naufragio for Buyer who has not given notice?

“The prospect of some heads of [warranty] claim having a 12 month time limit, and other claims having no time limit at all, and uncertainty as to which category specific claims fell into would be a goldmine for lawyers - and far removed from what the parties stated in their shipbuilding contract and what would have reflected their reasonable and objective intentions. Per Messrs Mark Hamsher, Christopher Moss and Lindsay Gordon (Arbitrators).

Neon Shipping Inc v Foreign Economic 7 Technical Corporation Co. of China & China Chang Jiang National Shipping Group Corporation Jinlin Shipyard [2016] EWHC 399 (Comm).
Defective Cranes, Construction of Language, Time-bar, Sale of Goods Act - Implied Term - Fitness for Purpose.

Facts:

Shipbuilding contract for the design, build and supply of a 57,000 dwt bulk carrier governed by English law and containing an arbitration clause. 

Clause 13 of the contractual Building Specification provided under “General Description of the Ship” that the vessel was “to be designed and built as a single screw motor driven bulk carrier for normal worldwide service”. Clause 33 “Cargo Handling System” specified the capacity of the deck crane to be as follows: “(for reference only)30 [tonnes] .. The cranes to be prepared and fitted with all required fittings for working with motor grabs [and] ..to be fully rated for continuous operation”.

The vessel was delivered on 12 November 2009. Article XI of the Contract provided for a Guarantee Period of 12 months, which expired on 12 November 2010. 

Three (3) years after delivery of the vessel, Buyer claimed that that the cargo cranes were faulty. No notice of the defects about the cranes was given within the Guarantee Period of 12 months. The Defendants denied liability in respect of the alleged defects and further relied upon Article XI of the Contract which provides that:


Saturday, April 30, 2016

Shipbuilding Refund Guarantees governed by English law - Proceedings in London and China

Shipbuilding Refund Guarantees governed by English law – Chinese Court prohibits Bank and its overseas branch from making any payment to Buyer under the Bank’s guarantees – English Court recognized Chinese Court judgement but ruled that Bank must pay Buyer.   

Spliethoff’s Bevrachtingskantoor BV v Bank of China Ltd [2015] EWHC 999 (Comm)  

Buyer claim against the Bank of China (BOC) under two refund guarantees issued by BOC to secure repayment obligations of a Builder (Chinese Shipyard) and Co-Seller (together “Sellers”) in respect of two shipbuilding contracts for construction of two new ships identified as Hulls 38 and 39. 

Proceedings in London: Buyer terminated the contract in respect of Hull 38 as the ship was not delivered on time, and claimed repayment of the instalments. Sellers commenced Arbitration in London, disputed Buyer’s right to cancel and contended that Buyer’s cancellation was a repudiatory breach of the Hull 38 Contract.

Delivery of Hull 39 was also late and in view of the arguments raised by Sellers in the Hull 38 proceedings, Buyer applied for a declaration that it was entitled to cancel the Hull 39 contract, whereupon Sellers are obliged to refund the instalments paid, failing which Buyer would be entitled to demand repayment from BOC. 

The buyer also applied to the English High Court for a declaration (a) that Sellers was obliged to refer its main engine claims (see below) to arbitration, (b) for anti-suit relief and (c) damages for breach of the arbitration clause.  

Proceedings in China: Separately, Sellers sued Buyer and Wartsila (engine manufacturers and suppliers) in Qingdao Maritime Court (QMC) for conspiring to supply and passing off as new second-hand and defective refurbished engines to the Sellers for installation in the ships. (Buyer challenged the jurisdiction of the Chinese Courts and but failed. Thereafter Buyer proceeded to defend the action).  

Award, Injunction and QMC Orders
Arbitral awards were given in Buyer’s favour and the Sellers was ordered to refund the instalments paid by Buyer in respect of both ships. An anti-suit injunction was granted against the Sellers but they continue to pursue the proceedings in QMC. QMC found Wartsila and Buyer liable for fraud and (a) ordered Buyer to provide a specified cash or other guarantees, (b) prohibited BOC and any domestic Chinese or overseas branch of BOC from making any payment anywhere under the guarantees to Buyer. 

Call on the Guarantees
The buyer called on the two Guarantees issued by BOC. BOC refused to pay on the grounds that it had been served with the QMC orders. Subsequently, it also included a defence that the demand in respect of Hull 39 was invalid.  

Court Decision
Having concluded that the Guarantees were demand guarantees in the nature of a performance bond, and not by way of surety, the Court considered BOC’s defences (a) on the validity of the Hull 39 demand, (b) based on the orders of QMC and if required, whether the QMC orders justify a stay.

Mrs Justice Carr concluded that (a) BOC’s objection to the validity of the Hull 39 demand was misplaced, (b) the parties have agreed that BOC’s obligations would not be affected or prejudiced by any extraneous matters, including a finding of fraud against Buyer in favour of the Sellers under the Contracts and (c) the rule in Holme v Brunskill that any material variation of the terms of the principal contract ( between the creditor and the principal) will discharge the surety was not applicable in the present case.  Accordingly, she ruled in favour of the Buyer under both guarantees.    

Stay of Execution
The Judge also refused to grant BOC’s application for stay of execution as she was not satisfied that there are special circumstances which make it inexpedient to enforce the judgments against BOC.  She stated inter alia that Chinese legal experts called on behalf of the Parties agreed that BOC would not be at any real risk of criminal prosecution, given the lack of the necessary intention on the part of BOC to flout the QMC orders. One of the expert, Mr Li Hui also expressed his written opinion that “any payment by BOC made as a result of a compulsory enforcement measure by a foreign court should not be considered as violating the XXK notices of assistance and should not be subject to any legal liabilities, criminal, civil or of any other kind. As such the Judge did not accept that “BOC would face any real risk of criminal or civil sanction or double jeopardy if it were to make payment (or be subject to enforcement) pursuant only to an order of this Court.”

She concluded: 

“Finally, even if there were real risks in this regard, these are matters inherent in the risks which BOC agreed to undertake when entering into the Guarantees on the terms that it did. BOC is an international commercial organisation in the business of providing external guarantees in return for the taking of fees and security.  The clear scheme under the Guarantees …in respect of obligations under the Contracts (which are also governed by English law and the subject of English arbitration agreements) is that the obligation on the part of BOC to pay on demand should not be affected by extraneous matters such as the XXK orders (or judgments in fraud or otherwise against SBV in separate proceedings in China). 

This  conclusion  is  not  to  disrespect  in  any  way  the  Chinese  courts  (or  principles  of international comity) but rather to give effect to the contractual bargain between SBV and BOC and to recognise the commercial purpose behind that arrangement.”  

*(XXK notices/orders – Notices or Orders issued in Builder’s favour by the QMC) 

Cases cited:
Holme v Brunskill [1878] 3 QBD 495.
Marubeni Hong Kong and South China Ltd v Mongolia [2005] 2 Lloyd’s Rep 231.
Wuhan Guoyu Logistics Group Co Ltd v Emporiki Bank of Greece SA [2012] EWCA Civ 1629.
Caja de  Ahorros  v  Gold  Coast  Ltd  [2002]  CLC  397  para  16.
Meritz Fire & Marine Insurance Co Ltd v Jan de Nul NV [2011] 2 Lloyd’s Rep 379.
WS Tankship II BV v The Kwangju Bank Ltd and another [2011] EWHC 3103 (Comm). 
Gold Coast Ltd v Caja de Ahorros Del Mediterraneo and others [2002] 1 All ER (Comm) 142.
AES Ust-Kamenogorsk Hydropower Plant LLP v AES Ust-Kamenogorsk Hydropower Plant JSC [2012] 1 WLR 920 (at paragraph 150).
Philip Alexander Securities & Futures Ltd v Bamberger and others [1996] CLC 1757 Per Waller J (at pages 22 and 23). 
Altimo Holdings and Investment Ltd and others v Kyrgyz Mobil Tel Ltd and others [2012] 1 WLR 1804 at page121.
Kydon Compania Naviera SA v National Westminster Bank Ltd and others) (“The Lena”) [1981] 1 Lloyds Rep 61.
WSG Nimbus Pte Ltd v Board of Control for Cricket in Sri Lanka [2002] WGHC 104, (Singapore High Court).
HIH Casualty and General Insurance v Chase Manhattan Bank [2003] 1 All ER (Comm) 349.
Society of Lloyd’s v Wilkinson (No 2) [1997] 6 Re LR 289.
WRM Group Ltd v Wood [1998] CLC 189. 
Skipskreditforeningen v Emperor Navigation [1998] 1 Lloyds Rep 66.
Deutsche Bank (Suisse) SA v Khan [2013] EHWC 482.
Deutsche Bank AG v Unitech Global [2014] 2 All ER (Comm) 268. 
The Wardens and Commonalty of the Mystery of Mercers of the City of London v New Hampshire Insurance Co [1992] 2 Lloyds LR 365.
National Westminster Bank plc v Riley [1986] BCLC 268 (“Riley”) May LJ at 275 i).
Blest v Brown [1862] 4 DE G.F. & J 367.
Ralli Brothers v Compania Naviera Sota y Aznar [1920] KB 614.
Field J in Bankhaus Wolbern & Co (AG & CO KG) v China Construction Bank Corporation [2012] EWHC 3285 (Comm).
AES-3C Maritza East IEOOD v Credit Agricole Corporate and Investment Bank [2011] BLR 249.
Kleinwort Sons and Company v Ungarische Baumwolfe Industrie Aktiengesellschaft [1939] 2 KB 678. Libyan Arab Foreign Bank v Bankers Trust Co [1998] 1 Lloyds Law Rep 259.
Toprak Mahsulleri Ofisi v Finagrain Compagnie Commercial Agricole et Financiere SA [1979] 2 Lloyds Rep 98.   

Statute s. 32 of the Civil Jurisdiction and Judgments Act 1982. 

Books cited:
Andrews and Millett: The Law of Guarantees (6th ed 2012) (at paragraphs 1-015 and 16-001).)
Paget’s Law of Banking.
Briggs & Rees: Civil Jurisdiction and Judgments (5th Ed 2009).
Dicey, Morris & Collins: The Conflict of Laws (15th Ed 2012). 
The Law Relating to Estoppel by Representation (4th Ed 2004 at paragraph 1.2.3).
Chitty: Contracts (31st Ed) (“Chitty”) at paragraph 3-090).
The Modern Contract of Guarantee (2nd English Ed 2010) at paragraphs 8-17 and 8-18.

Chinese Statutes cited:
Article 29 of the Provisions of the Supreme People’s Court on Seal-Up, Detainment, or Freezing of Property in the Civil Enforcement by People’s Courts.
Chapter III of the Special, Maritime Procedure Law of the People’s Republic of China. Articles 12 and 16.
Civil Procedure Law of the People’s Republic of China, Chapter 9: Property Preservation and Advance Execution, Articles 92 and 94.
Article 168 of the Interpretations of the Supreme People’s Court on the Application of the Civil Procedure Law of the People’s Republic of China (2015).
Article 105 of the Opinion of the Supreme People’s Court on Certain Issues Concerning the Application of the Civil Procedure Law of the People’s Republic of China (“the Judicial Interpretation”).
Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Laws to Unsettled Cases after the Implementation of the Amended Civil Procedure Law. 
Article 1. Article 114 (4) of the CPL 2013 or Article 313 of the Criminal Law of the People’s Republic of China.
Article 37 of the Regulations of the Supreme Court about enforcement by People’s Court.  

Source: Bailii

Tuesday, April 19, 2016

Shipbuilding Delays & Extension of time

“… delays in construction are prima facie the responsibility of the Builder, unless they are excused by a provision of the contract.”. Per Leggatt J at para 68.

In the case of Zhoushan Jinhaiwan v Golden Exquisite Inc & 2 others [2014] EWHC 4050 (Comm), Buyer cancelled the shipbuilding contracts as delivery of the vessels were delayed more than 270 days after the delivery date. Shipyard argued that the cancellation was wrongful as some of the delays was caused by Buyer’s own breach of contract which amounted to a repudiatory breach. On appeal from two arbitrations, Mr Justice Leggatt identified three types of delays in the contract. They were permissible delay, non-permissible delay and excluded delay.

Non-Permissible Delay
Under Article III.1 (b) of the contract Buyer could deduct a specified sum from the final instalment for each day that the delivery of the vessel was delayed by more than 30 days but less than 210 days after the Delivery Date specified. 

Permissible Delay
Under Article VIII, the delivery date of vessel will be extended if Shipyard is affected by certain stated events or other causes beyond its control, provided notice is given within 7 days its commencement and cessation respectively. In the absence of such notice, Shipyard will be barred from any relief claimed.

Excluded Delay
Even though not expressly named as such in the contract, the Judge described the following delay events that provide for an extension of the delivery date as Excluded Delays: (a) Changes in the specifications, plans class requirements, Articles V.1 and V.2, (b) Late delivery of Buyer’s supplies, Article V.4, (c) Failure of the Buyer’s representatives or supervisor to attend sea trials, Article VI.1, (d) Buyer’s default in (i) payment of instalment, (ii) failing to provide a guarantee of payment or (iii) failing to take delivery of the vessel under the contract, Article XI.4(a), (e) Mutual agreement by the Parties to proceed with the contract in the event where the vessel becomes a total, Article XII.2 (b), (f) In event of any arbitration between the Parties, Article XIII.7

Cancellation Rights
The contract expressly provided that the Buyer could cancel the contract under the following circumstances:

(a)   the delay in the delivery of the vessel continued for a period of at least 210 days, and/or
(b)   If the total of all accumulated permissible delays is two hundred and twenty five (225) days or more, or the combination of all permissible and non-permissible delays is two hundred and seventy (270) days or more.  

Excluded delays did not counted as delays for the purpose of any right of cancellation as there was no contractual provision that state otherwise.

Under Article IV, the BUYER undertook and assured that its Supervisor would carry out his inspections “in accordance with the agreed inspection procedure and schedule and usual shipbuilding practice and in a way as to minimize any increase in building costs and delays in the construction of the VESSEL.”

The Shipyard alleged inter alia that Buyer was in breach of the above undertaking as the Buyer’s Supervisor worked very short hours, thus delaying the inspection process and imposed unreasonable requirements, beyond those specified in the contract, specification, class rules &  regulations, agreed standards and general practices. All these delayed the construction process.

Also, the Buyer’s supervisor delayed the return of procedures or drawings of the vessel and Shipyard could not carry out further construction of the relevant items. According to the Shipyard such delay caused by Buyer’s breach was the fourth category of delay. (Note: Notice of such alleged breach was not given to Buyer and the Shipyard only made the claim after cancellation of contract).

The Judge pointed out that:

The Yard is only obliged to correct such nonconformity if it agrees with the Buyer. Buyer’s supervisor has no power to delay the construction of the vessel.  If the supervisor points out what he thinks is a failure by the Yard to build the vessel in accordance with the contract, it is up to the Yard to decide whether it agrees with the supervisor, in which case it must of course correct the defect, or whether it is disagrees with the supervisor, in which case it is free to ignore him.

Whilst the supervisor had the right to attend tests and carry out inspections, there was nothing in the contract which required the Yard to wait for him.  Equally, if the supervisor sought to impose unreasonable requirements beyond those specified in the contract, the Yard had no obligation to comply with them.

As for returning procedures or drawings of the vessel (the third form of alleged breach), the specifications for the vessel were all agreed at the time when the contracts were made and were annexed to the contracts, and I can see nothing in the contract terms which required the supervisor’s approval to be sought or obtained for any procedures or drawings

The Court said that there was no additional fourth category of delay and Article IV is not considered “Excluded delay” as it did not expressly extend the time for delivery of the vessel due to any breach of Buyer’s undertaking.  After considering various arguments from both counsels, the Court held that the delay caused by Buyer’s breach under Article IV were non-permissible delays. Therefore, such delays could be included in (a) the period of 270 days’ delay  under Article VIII.3 and the period of 210 days’ delay after the Delivery Date under Article III.1(c) either of which entitles the Buyer to terminate the contract.

Source: www.bailli.org

Cases referred to in the Judgement:

BMA Special Opportunity Hub Fund Ltd v African Minerals Finance Ltd [2013] EWCH Civ 416 at [24]
Jackson v Dear [2012] EWHC 2060 (Ch) at [40].
Alghussein Establishment v Eton College [1988] 1 WLR 587
Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848 (Comm) at para 255.
The “Kriti Rex” [1996] 2 Lloyd’s Rep 171, 196
Federal Commerce & Navigation Co Ltd v Molena Alpha Inc (The ‘Nanfri’) [1978] 2 KB 972, 975; Geldof Metaalconstructie NV v Simon Carves Ltd [2011] 1 Lloyd’s Rep 517 at para 43(vi). 
Pioneer Shipping Ltd v BTP Tioxide Ltd (‘The Nema’) [1982] AC 724, 742. 

Some thoughts:

Failure to serve Notice of alleged Buyer’s breach – Was there a proper contract management team at Shipyard? If notice has been served, perhaps Buyer’s Senior Management would have taken notice that all was not well in the Project. Unless...

Unreasonable Representatives: Some contract provides for removal of Buyer’s Supervisor or Shipyard’s Project Manager on account of unreasonable behavior.

Inspection process – Some contract provide for deemed acceptance if Buyer’s representative fails to attend schedule inspection & tests. Regardless, most contract will provide that at the end of the day it is still Shipyard’s duty to ensure the timely delivery of a seaworthy ship that complies with contract and specification.

Unreasonable requirement – As the Judge says, the Shipyard can refuse to comply. What is puzzling – how is it possible for Supervisor to impose unreasonable requirements in respect of class items? Prudent contract will provide that in the event of dispute concerning class requirements, the decision of class shall prevail.

Late return of procedures or drawings – Most contract will provide that Buyer’s approval, deemed approval or omission will not diminish Shipyard’s responsibility to design, construct or deliver a vessel in accordance with the contract and specification. There should be a specified timeframe for submission of such documents. If Buyers fails to return such documents with approval, comment, amendments or reservation, (if any) within the stipulated time, such documents shall be deemed approved - See NEWBUILDCON Clause 20(e).Should Buyer request for subsequent revision, this could be the subject of a Variation Order with time and costs impact.

Tuesday, December 8, 2015

Shipbuilding & Offshore Construction Case Updates


Bluewater Energy Services BV v Mercon Steel Structures BV & 2 Others [2014] EWHC 2132 (TCC)

Claims arising under a sub-contract for the fabrication of a tower based soft yoke mooring system for installation as part of the development of the Yuri Korchagin Field in the Caspian Sea. 

“There are numerous issues which the parties have been unable to settle. The main factual disputes concern the causes of delay and liability for any delay and the events leading up to termination. There are many financial claims which depend on particular issues of contractual interpretation or fact.”   At Para 19.


Zhoushan Jinhaiwan Shipyard Co Ltd v Golden Exquisite Inc & 2 Others [2014] EWHC 4050 (Comm)


“In each case the Buyer has purported to exercise a contractual right to cancel the contract on account of delay in delivering the vessel.  In each case the Yard has sought to argue that the cancellation was wrongful on the ground that a relevant part of the delay was caused by the Buyer’s own breach of the contract.  The central question raised by these appeals is whether the factual allegations made by the Yard as to the extent and cause of delay, if proved, provide an answer to the Buyers’ claims, or whether on the proper interpretation of the contracts the cancellations were lawful even on the facts alleged.”

Tuesday, April 21, 2015




APRIL 2015
PRESS RELEASE

The Shipyard Lawyer: A Master Guide to Shipbuilding Contract Qualifications




Presenting the World’s First Book on Shipbuilding Contract Qualifications.

Easy to read, practical and not cluttered with perplexing legalese, it is an indispensable go-to book that will help readers involved with shipbuilding contract qualifications get the job done systematically. 

In addition to acquiring good working knowledge of shipbuilding contract, readers will be equipped with practical skills to review and qualify any shipbuilding contract meticulously.

The Book also addresses a major concern lingering in the minds of shipyard’s CEO

“How can I be sure that the terms of the shipbuilding contract which I am about to sign will not impact the project’s profitability or jeopardize the shipyard?”

Essentially, readers will gain practical insights into:
  • The nature of a shipbuilding contract and pre-contract activities
  • Selected shipbuilding contract terms with solutions to associated concerns
  • Internal Contract Qualifications Guidelines for Seller
  • Subcontractors 
  • Guarantees
  • Ancillary Agreements, 
  • Tests, Sea Trials and Delivery
  • Litigation Readiness
  • Memorandum of Understanding
  • Contract Qualifications Form
  • Variation Order Form
  • Novation Agreement
  • Useful Case References
Available in paperback and e-book format. 

For purchase information or other queries, 
contact David@shipyardlawyer.com

The Dark Side of Shipping

Came across an interesting article about “Slavery at Sea” which rekindle an event that happened more than 30 years ago where I was brought...