J.M William Turner – The Shipwreck, 1805, London - Tate Britain

Shipwrecks and other disasters at sea were frequently painted during the Romance period.

Costa Concordia Salvage Operation

It is expected to be the biggest salvage operation ever attempted. As of September 2013 the salvage has cost over $800 million.

The Bulk Carrier Double Fortune

The Panama flagged bulk carrier Double Fortune was built in 2010. Gross tonnage and deadweight are 50617 t and 95790 t respectively.

Manoeuvring Container Operations

Containerisation and multimodal transport: the development of door-to-door transport.

Fire Onboard Vessel

Fire on board ship is one of the most dangerous risks for vessels and cargos. Electrical equipments, flammable liquid on board, engines and boilers often cause it.

Sunday, 30 March 2014

EU Commission Grants Funding for Modernisation of Italian Port of Salerno

March 30, 2014.The European Commission has concluded that funding for an investment project in the amount of €71.1 million from the European Regional Development Fund to the Port of Salerno in Italy (Campania Region) is in line with EU state aid rules.

The project will further EU transport objectives, such as preserving a wide range of integrated maritime connections in Europe, without unduly distorting competition in the Single Market.

In February 2014, Italy notified for approval under EU state aid rules its plans to fund a project of the Port Authority aimed at improving existing facilities at the Port of Salerno through grants from the EU regional fund. The investment will enable the Port Authority to ensure safer entry for larger vessels by expanding the port’s entrance and dredging the seabed and the access canal to the port. It will also consolidate part of one of the existing docks.
The Commission has concluded that the investment will contribute to preserving a wide range of integrated maritime connections in the EU. The public funding is necessary to provide an incentive to the Port Authority to carry out the project. Indeed, the project is not viable without public support, because the expected net revenues do not meet the investment costs. The amount of funding is limited to the minimum necessary to make the investment possible. The project will induce limited distortions of competition because Port of Salerno is a small regional port, serving mainly the Campania Region. The Commission has therefore concluded that the aid granted to the Port Authority is in line with Article 107(3)(c) of the Treaty on the Functioning of the European Union (TFEU), which allows state aid for the development of certain economic activities.
The Commission also checked whether subsequent port operators will receive an undue economic advantage. Concession contracts for the use of the port’s facilities will be awarded by public, open and non-discriminatory tenders, in compliance with EU and Italian public procurement law. Therefore, the Commission considers that the future port operators will not benefit from any state aid within the meaning of EU rules. The same holds true for end users of the Port of Salerno, who will pay market prices for the services offered at the port.

Source http://worldmaritimenews.com

Friday, 28 March 2014

Will Dawei be the new hub of South East Asian Sea transportation?

The recent opening of Myanmar to foreign investments has brought new perspectives for South East Asian Sea transportation. In 2008, the Thai Government of Yingluck Shinawatra signed a memorandum of understanding with the Republic of Myanmar for the construction of a deep sea port on the Southern shoreline of Myanmar at the far west of the East-west Great Mekong River sub region economic corridor. 

The project aims to shorten maritime routes from Thailand (and incidentally its neighboring countries) to Europe, India, Middle-east and the rest of the western world. 
Products manufactured in Thailand for the western market will usually travel all the way down through Singapore and the dangerous and congested Malacca strait before reaching the Indian Ocean. The construction of a deep-sea port along the cost of Myanmar would provide a direct access to the Andaman Sea and the Indian Ocean and therefore significantly reduce freight and time of shipment between the west.

On a voyage from Lang Chaban to Dubai, a container ship has to travel 4800 nautical miles through the traditional shipping route. At an average speed of 10 nautical miles per hour it takes her 20 days to reach her destination. 

The traditional route form Bangkok to Dubai

If the Dawei deep seaport project is achieved, as well as its related highway network, goods manufactured in the industrial zone of Bangkok will travel 350 kms on land in a day, up to the loading deck, and a further 3500 nautical miles to Dubai. A vessel sailing 10 nautical miles per hour would resume the voyage in 15 days. Fuel consumption and distances would be cut off by a quarter by the opening of this alternative route.

The project would have an important impact on the ASEAN trade but also on Korea, Japan and the South of China as projects for the construction of highway networks along the three main economic corridors of the Great Mekong River sub region are being developed.
Together with the deepsea port, the Dawei project also plans on the development of large Hinterland infrastructures such as terminals, industrial complexes etc, and the construction of a new pipeline to supplement the already existing Yadana one. Thailand’s future energy needs directly depend on its trading relationships with Myanmar. Around 70% of Thailand’s electricity is produced from gas fired. Among those 70% only a small proportion comes from national production the rest is provided by Myanmar. 

Even though the project sounds promising, its future remains uncertain. In 2012, shortly after the signature of a second agreement of understanding, the Thai construction firm Italian-Thai development Public Company Limited was granted, by the government of President Thein Sein, a 75 years concession to develop the project. Two years later the two Governments were revoking the concession as the company had failed to attract enough investors to resume the first stage of the project. If Japanese Investors and other Thai industrials expressed their interest in resuming the project by investing new funds, it seems that no official negotiations will be undertaken before December 2014.
Political instabilities on both sides of the border (the ethnical conflict between Muslims and Buddihsts in the South of Myanmar and the recent overthrow of the Pheu Thai Party) make the realization of the project more difficult as they are not without repercussion on the willingness of investors to invest in the area. 

Geoffroy Ygouf 

For further information about this topic: Geoffroy Ygouf  LL.B Cean (FR), LL.M Thammasat (T),  LL.M Southampton.  E-mail: geoffroy.ygouf@gmail.com

[Figures and marine distances: Economic Dependence Subjucates Policy-Thai-Burma by Thitinan Pongsuhirak/Dawei Developemnt Company Ltd/Sea route & Distances-ports.com]

Wednesday, 26 March 2014

Kidnapping Resurgent in Gulf of Guinea Piracy

March 26, 2014.The first ten weeks of 2014 have witnessed the resurgence of maritime kidnap-for-ransom off the coast of Nigeria’s Niger Delta.

This distinct form of piracy does not receive the same international attention as does the hijacking and robbery of multi-million dollar tanker cargos, but it poses an omnipresent threat to greater number of mariners.

Although the vast majority of incidents go officially unreported, Nigerian pirates have attacked at least a dozen vessels and kidnapped about 20 seafarers so far this year. In the first week of March alone, pirates boarded three supply vessels, reportedly seizing nine hostages.

Full article on: http://www.maritime-executive.com

Sunday, 23 March 2014

Norwegian Ship To Continue Search For Malaysia Plane Despite Nightfall

March 20, 2014.
The owner of a Norwegian car carrier said it planned to search through the night for two large objects sighted off Australia that could be debris from a missing Malaysia plane, despite the official search being suspended because it was too dark.

The Hoegh St. Petersburg was the first ship to arrive in the area where the two objects were spotted by satellite four days ago in one of the remotest parts of the globe, around 2,500 km (1,500 miles) southwest of Perth.

 Full article:  http://www.marineinsight.com

Sunday, 16 March 2014

Costa Concordia, Two Years Later.



Get on board, get on board, damn it! Many of you probably will remember the telephone call from the Coastguard to Schettino, in which the enraged captain De Falco ordered captain Schettino to return to the ship from his lifeboat after he abandoned the Costa Concordia while almost 100 people were still on board. That order, spoken by De Falco in coloured Italian words, soon become a motto in Italy, and then spread through YouTube and Facebook across the world. “Italy wants to have steady nerves because we have already done the cabaret route” the Corriere della Sera columnist, Beppe Severgnini said.

A night of errors and lies
The 952 ft. length Italian cruise ship Costa Concordia was sailing off Isola del Giglio, Tuscany on 13th January 2012 carrying 4,252 people on board, having just left the harbour of Civitavecchia towards Savona, for a several - days planned cruise across Mediterranean sea.
At 9:45 PM, during a deviation from the computer-programmed route token by captain Francesco Schiettino for an unofficial “touristic-salute” to the local inhabitants, the ship struck her port side on a reef, causing a 70 metre tear in the ship’s hull. As soon as water started to flood the engine rooms, the ship lost her propulsive power and commenced to shift only by means of inertia.  Notwithstanding, Schiettino decided not to notify the nearby port authorities of collision and tried to resume the original route – investigation later revealed this decision to be crucial in the disaster. The SOS was only sent 40 minutes after the impact just as the Concordia was progressively increasing the tilt starboard and running aground in proximity to the coast of the island. The captain Schiettino ordered the ship to be abandoned and Coastguard vessels were sent to the rescue. However, during the rescue operation the captain left the ship jumping into a lifeboat when there were still almost hundred persons on board. Then, the phone call from the captain De Falco to Schiettino occurred, in which the latter was colourfully asked to go on board in order to supervise the rescue. He refused:  “do you realize it’s dark out here and we can’t see anything?” Schiettino defended. “What do you want to do? Do you want to go home? It’s dark so you want to go home?” De Falco replied sarcastically.
During the six-hour evacuation carried by the Coastguard most passengers were brought ashore, although 32 people lost their lives in the Italian waters – one of the two missing bodies were found a few months ago during the refloating of the ship.
Today, two years after that dreadful night, after the shouts and panicking has ceased, it remains a million dollar wreck-business, capable of attracting maritime industry giants which had contracted what is expected to be the biggest salvage operation ever attempted. As of September 2013 the salvage has cost over $800 million.

Who is paying for that tragedy?
The trial in which Schettino faces charges of manslaughter, causing a maritime disaster and abandoning ship is still on going. However, on July 2013 five people were found guilty of manslaughter, negligence and shipwreck - the company’s crisis director, the cabin service director and three crew members - receiving sentences between one and two years. The position of the captain seems to be much more severe, who will face up to 20 years in prison if convicted. Furthermore, at the last hearing in October 2013, the Moldovan dancer Domncia Cemortan, who was on the bridge with Schiettino testified to be in a romantic relationship with the captain and that she was with him when the disaster occurred. Could her lovely presence have generated a distraction for the captain or is this only a matter for tabloids and gossip?
However, soon after the tragedy another legal battle took place. Passengers are seeking compensation at least to ease the pains of a nightmare that they will never forget.
In order to try to keep at bay individual lawsuits Carnival Cruise Lines – Costa Cruise’s holding company - offered 11,000 euro per passenger compensation plus any extra refunds after reaching an agreement with some consumer groups coordinated by Astoi Confindustria Viaggi. Nevertheless, Codacons association did not sign the agreement, regarding the proposed settlement as “insulting” and suggesting not taking the offer. Only around one third of passengers accepted the deal.
Thus, the American law firm Proner & Proner, Codacons and Bern Law Firm filed a class-action lawsuit together in Miami (where Carnival group is headquartered) considered as the proper place of jurisdiction and for sure a better legal battleground. The team, representing two Italian and four American passengers, stated to possess valid element to avoid the exception of “forum non convenies” - the doctrine employed when the court chosen by the plaintiff is inconvenient for witnesses or poses an undue hardship on the defendants, who must petition the court for an order transferring the case to a more convenient court. The claim, for which the firms will bear all expenses until the final verdict in return for 40% contingency fee, accounted for $10 million damage and $450 million punitive damages – in accordance with the Italian civil code.
On the other hand, another claim was filed in the country of the disaster, whereby the lawyer Giulia Bongiorno gathered about 50 survivors for a class-action lawsuit seeking about $160,000 each, including material damages (physical damages, lost properties) but also moral ones (such as fear and terror suffered). However, those are not the only class-actions commenced and many others survivors joined to them.
Indeed, there will be a lot of work to do for the Carnival and Costa Cruise lawyers in the next few years if they want to make the passengers regret not having accepted the 11,000-euro offer.

Lorenzo Macchi

Saturday, 15 March 2014

Breach of Collision Regulations: The Different Prospective Under the MSA 1995

The regime applicable to the breach of Collision Regulations has changed radically over the past century. Section 419(4) of Merchant Shipping Act 1894 provided as follow:

Where in a case of collision it is proved to the court before whom the case I tried, that any of the Collision Regulations have been infringed, the ship by which the regulation has been infringed shall be deemed to be in fault, unless it is shown to the satisfaction of the court that the circumstances of the case made departure from the regulation necessary.

This provision had been removed today, so that the presumption of fault by mere breach of COLREGs no longer exists. In fact, according with s. 187(4) of MSA 1995:

Nothing in this section shall operate so as to render any ship liable for any loss or damage to which the fault of the ship has not contributed.

Thus, the parties which allege an infringement of Collision Regulations, must also prove that such infringement was triggered by negligence and it caused or at least contributed to the collision (i.e. causation in fact). The “causation in fact” principle is well described by Mandraka in Modern Maritime Law: “the question to be asked in each case is essentially this: did the failure to observe the particular regulation set in motion or contributed to a chain of circumstances which resulted in the collision, or was there an intervening factor which broke this chain and that factor was in fact the real cause of the collision incident?”
What does intervening factor – or actus novus interveniens – mean? What is the amount thereof to breach the chain of causation which resulted in collision? In The Oropesa 1 , Wrigth J stated:
“The question is … whether there was a
new cause. I think that is what Lord Sumner emphasized
in The Paludina. To break the chain of causation it must be
shown that there is something which I will call ultroneous, something unwarrantable, a new cause which disturbs the
sequence of events, something which can be described as either unreasonable or extraneous or extrinsic.”

The onus of proof is therefore reverted so that no strict liability arises by breach of Collision Regulations alone. In The Heranger 2, the House of Lord stated, “the onus is on the party setting up a case of negligence to prove both the breach of duty and damage. This, ordinary rule in common law cases, is equally the rule in admiralty.”
Indeed a breach of the COLREGs is still a factor, rather relevant, to be taken into account in determining such infringement of duty of care.
In addition, according to the general principle of negligence, it will be necessary for the claimant to show also damages suffered as a consequence of the collision (i.e. remoteness of damages)3.

Finally, whether the breach caused a collision or not, an infringement of Collision Regulations remains a criminal offence. In fact, S. 6 of MSR provides that:
“where any of these Regulations is contravened, the owner of the vessel, the master and any person for the time being responsible for the conduct of the vessel shall each be guilty of an offence.

Lorenzo Macchi

1 (1943) 74 LlL Rep 86
2 [1939] AC 94
3 cf. The Carslogie [1952] AC 292 and The Calliope[1970] 1 Lloyd’s Rep. 84 as to determine whether or not the consequent damages are considered as resulting of the collision.

Scopic Clause

The Scopic clause has been introduced after The Nagasaky Spirit in 1999 so as to give salvors an alternative basis of remuneration. Scopic clause follows different criteria than art.13 of the International Convention on Salvage 1989. For the clause operate, it needs to be specifically incorporated into a LOF contract and it has to be invoked by the salvor. Scopic remuneration is calculated by reference to an agreed tariff of rates, it covers the salvor’s out-of-pocket expenses, and an uplift of 25% is applied to be even more profitable to salvors. Furthermore, it applies only when the sum exceeds the amount of the award under art.13.

For a complete exploration of Scopic Clause subject follow: Hill Dickinson. SCOPIC.pdf

Thursday, 13 March 2014

Rome II: The Law Applicable to Non-Contractual Obligations

Source: Ince & Co.

From 11 January 2009 Rome II, otherwise known as Regulation (EC) No 864/2007 governing the law applicable to non-contractual obligations must be applied by all EU Member States (excluding Denmark). The objective of the Regulation is to harmonise the rules of the EU states relating to the law governing non-contractual disputes. It will apply to all such disputes involving a conflict of law issue, whether or not the parties are domiciled in contracting states or the relevant events or damage occurred in a contracting state.

The Regulation lays down rules for the law applicable to non-contractual obligations generally and makes specific provision for certain types of non-contractual obligation, including obligations arising out of dealings prior to the conclusion of a contract. 

The concept of a non-contractual obligation varies from one Member State to another. Therefore, for the purpose of the Regulation non-contractual obligations are to be understood as an autonomous concept (Preamble 11) and will not necessarily correlate with English law. There may be obligations classified as contractual or non-contractual under English law, which would be otherwise classified for the purpose of application of the Regulation and the Rome Convention. 

For claims that arise to prior to 11 January, but in respect of which proceedings have not yet been issued, the Regulation may have retrospective effect as it is stated to apply to events giving rise to damages which occur after its entry into force, which was on 19 August 2007 (Art 31). 

Key Provisions 

The general provisions, stated in Article 4, are as follows:

The general rule: The law applicable to a non-contractual obligation arising out of a tort/delict shall be the law of the country in which the damage occurs irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occurred (Art 4(1)); 
However, where the person claimed to be liable and the person sustaining the damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply (Art 4(2)).
Where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with a country other than indicated in the paragraphs above, the law of that other country shall apply. A manifestly closer connection with another country might be based in particular on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question (Article 4(2))

There are specific provisions governing:

environmental damage (Art 7);
unjust enrichment (Art 10);
culpa in contrahendo (Art 12) that is, obligations arising out of dealings prior to the conclusion of a contract. 

In respect of non-contractual obligatons falling within Article 12, regardless of whether the contract was actually concluded or not, the law applicable to such obligations shall be the law that applies to the contract or that which would have been applicable had it been entered into (Art 12(1)). There are fall back provisions in the event the applicable law cannot be determined on this basis. Preamble 30 expressly provides that Article 12 shall include the violation of the duty of disclosure and the breakdown of contractual negotiations. Unlike some civil law systems, there is no generally recognised duty to negotiate in good faith under English law. However, negligent and fraudulent misrepresentation will fall within this Article as will pre-contractual deceit. It is unclear whether Article 12 will apply to obligations incurred by a non-contracting party, such as a broker, in connection with contracts concluded by others. 

There are also specific provisions governing product liability; competition, intellectual property and industrial action. 

Certain non-contractual obligations are excluded from the application of the Regulation, including those arising out of: the law of companies and other bodies corporate or unincorporated (Art 1(2)); the negotiable character of negotiable instruments and violations of privacy, including defamation. 

Claims Against Insurers 

The Regulation increases the scope for claims to be pursued directly against liability insurers. Under Article 18 such claims may be brought if permitted either by the law applicable to the non-contractual obligation or the law applicable to the insurance contract. 

Agreement on Applicable Law 

The parties may agree to submit non-contractual obligations (other than intellectual property right infringement, unfair competition and acts restricting free competition) to the law of their choice either:

by agreement entered into after the event giving rise to the damage has occurred; or 
where the parties are pursuing a commercial activity, by an agreement freely negotiated before the event giving rise to the damage occurred.

The choice need not be in writing, but must be expressed or demonstrated with reasonable certainty by the circumstances of the case and shall not prejudice the rights of third parties (Article 14(1)). 

To minimise any risk that non-contractual aspects of their relationship may be subject to a law other than the law of the contract, contractual choice of law clauses should be drafted in terms wide enough to cover both contractual and non-contractual obligations. However, these clauses will be effective only in individually negotiated contracts as the travaux preparatoires to Convention confirms that it is only individually negotiated agreements that will be "freely negotiated" for the purpose of Art. 14(1). It remains to be seen to what extent the relative bargaining powers of the parties will be taken into account when determining whether an individually negotiated contract has been “freely negotiated”. 

If, at the time when the event giving rise to the damage occurs, all relevant elements of the situation are located in a country other than the country whose law has been chosen, the choice of the parties under Article 14 will not prejudice the application of the law of that country that cannot be derogated from by agreement. 

Scope of the Applicable Law 

The law applicable under Rome II will apply to govern the existence, nature and assessment of damages (Art 15(c)). The latter results in a significant change to English law under which the assessment of damages has previously fallen to be determined by the law of the forum. Where, for example, a personal injury claim is subject to the law of another state, it may now be necessary to adduce expert evidence on issues relating to quantification of damages for permanent physical impairment. However, liability for and assessment of legal costs will remain subject to English law and this may now be an important factor where a claimant has a choice of` jurisdictions in which to pursue a claim.

Source: Ince & Co

Monday, 10 March 2014

Rolls-Royce imagines a future of unmanned ships

Unmanned cargo ships could become a reality on our oceans within the decade, according to manufacturer Rolls-Royce.

The firm has been showing off the designs for its concept crewless ships.
The EU is funding a 3.5m euro (£2.8m) project dubbed Maritime Unmanned Navigation through Intelligence (Munin) which aims to develop its own autonomous ship. Experts remain divided over whether such vessels will become a reality.
No crew 
Writing about the future of shipping Oskar Levander, Rolls-Royce's vice president of innovation, engineering and technology said: "Now it is time to consider a road map to unmanned vessels of various types. Sometimes what was unthinkable yesterday is tomorrow's reality.
"Given that the technology is in place, is now the time to move some operations ashore? Is it better to have a crew of 20 sailing in a gale in the North Sea, or say five in a control room on shore?" he asked.
A remote-controlled ship would look quite different to a traditional one, he added, largely because there would be no need for the facilities and systems currently needed for a crew.
"Eliminate or reduce the need for people and vessels could be radically simplified," he said.
According to Moore Stephens LLP, an industry consultant, crew costs account for 44% of total operating costs for a large container ship.
Maritime transport has seen significant spikes in volumes in recent years and shipping is now worth $375bn (£224bn) annually.
There are approximately 100,000 merchant ships in operation around the world with certain areas of water - such as the English Channel - clogged with vessels.
Unmanned ships are currently illegal under international law, according to Simon Bennett, a spokesman for the International Chamber of Shipping, an industry representing more than 80% of the global fleet.
"It would require a complete overhaul of the regulatory regime. Apart from the safety considerations, there would also be a lot of questions from bodies such as trade unions," he told the BBC.
"While I wouldn't dismiss it completely, realistically it is hard to see remote-controlled ships without any crew for two to three decades," he added.
But there is, he said, intense debate in the shipping industry at the moment about the use of e-navigation - using computerised systems to navigate ships from dry land.
The ships would still have crews but some of the operational control would be moved to a system known as vessel traffic services, he explained.
For now Rolls-Royce's plans for robot ships remain at the concept stage but it is busy showing off its paper designs in the hope of persuading the industry that such change is inevitable.
And it has precedents from other transport industries.
Car manufacturers, from Tesla to Nissan and Daimler have promised self-drive cars will be on the roads by 2020 or sooner.

The Seaflower and "The Waller Test"


It is a general rule under common law that the performance of a contract must be precise and exact, otherwise the part not in fault will be entitled to claim for breach of contract. Therefore, it can be concluded that even the slightest deviation from the terms of the contract will be treated as a breach[1]. However, the identity between deviation and breach is not absolute: when the deviation is “microscopic” or “negligible”, for the de minimis non curat lex rule, such a divergence will be disregarded and the contract will be considered to have been correctly performed.
In Margaronis Navigation v. Peabody, Diplock L.J., said: “It seems to me that the law has always
regarded a contract to deliver or load a specific quantity of goods as satisfied if that quantity has been delivered with the margin of error which is not commercially practicable to avoid …”[2]
Under civil law, the way in which the performance is to be made seems to be less severe. Art. 1455 of Italian Civil Code[3] states that in terms of resolution of contract:” “the breach not to be of little importance“ Thus, the words little importance suggest that the breach, so as to lead to termination, is to have certain relevance to the nature of the contract. Therefore, this provision seems going further to de minimis non curat legis rule under common law, in so far the meaning of “microscopic” is to be considered narrower than the one of “not to be of little importance“. What is the regime applicable to the breach of contract?

Consequences of breach: damage or termination
Breach of contract entitles – depending on the term breached - the innocent party either to treat the contract as discharged or repudiated, or treat the contract still binding and allowing to claim damages only.
In the first case, the term of the contract is classified as a condition: it is an essential term of the contract, described also as the core of the contract[4], which – as pointed out by Devlin J[5] – “ underlies the whole contract so that, if is not complied with, the performance became totally different from that which the contract contemplates”. 
On the other hand, a term will be classed as a warranty whenever it is not fundamental, but only subsidiary or collateral so that the innocent party cannot be discharged from further performance[6].
The dominant approach of the Courts until the end of the last century was to classify terms ab initio as conditions or warranties, privileging the need of certainty rather than to reach a fair and just decision in individual cases. [7] In Bunge v. Tradax was held: “this classification is carried out by construing the particular term and the contract in which it appears, rather than by consideration of the seriousness of the breach of that term that has taken place in the instant case”
Today, a more flexible new approach has been given, heading the concept of innominate (or intermediate) term. The breach of an innominate term will not automatically give the right to terminate the contract without taking into account the gravity of the consequences of the breach itself[8]. It is, in other words, an evaluation ex post upon the effects of the breach, so as to permit, as remedies, the termination of the contract and damages or damages only whether or not the breach is so serious to go to the root of the contract[9]. The notion of “going to the root of the contract” was well established by Lord Diplock in Photo Production v. Securicor “the event resulting … has the effect to depriving the other party of substantially the whole benefit which it was the intention of the parties that he should obtain from the contract“.
Therefore, nowadays, as for the default position, terms are to be classified as innominate unless categorisation as condition is made - by statue or judicial decision or express designation in the contract, or finally, by implication from the nature of contract, subject- matter, or circumstances. The test applied by Waller L.J in The Seaflower[10] – also called “the Waller test” – establishes that:
 “...a term of a contract will be held to be a condition:
(i) If it is expressly so provided by statute;
(ii) If it has been so categorised as the result of previous judicial decision (although it has been said that some of the decisions on this matter are excessively technical and are open to re- examination by the House of Lords);
(iii) If it is so designated in the contract or if the consequences of its breach, that is, the right of the innocent party to treat himself as discharged, are provided for expressly in the contract; or
(iv) If the nature of the contract of the subject-matter or the circumstances of the case lead to the conclusion that the parties must, by necessary implication, have intended that the innocent party would be discharged from further performance of his obligations in the event that the term was not fully and precisely complied with”.  
In the light of the new authorities, the default position is to classify any terms included in the contract of carriage as innominate, to such an extent, applying the Waller test, they became eligible to be qualified as a condition. Once it occurs, the innocent party may rely upon the right of discharging the contract unless he - voluntarily - wishes to waive  such a right or affirm the contract or – involuntarily – accepts the contract by taking a substantial benefit under the contract. Alternatively, where such terms fail to be classified as a condition, then the innocent party will be only entitled to damages with no right to terminate unless he can prove that the consequences of the breach “go to the root of the contract”.   

Lorenzo Macchi