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.

Monday, 29 September 2014

BP found guilty of gross negligence

September 29, 2014.

BP Plc could have to pay a fine of up to $18bn dollars after being found guity of gross negligence in the wake of the 2010 Gulf of Mexico oil spill, the biggest of its type in US history.

In a case that also involved Transocean Ltd. (RIG) and Halliburton Co. (HAL), US District Judge Carl Barbier ruled that “BP’s conduct was reckless” while “Transocean’s conduct was negligent' and "Halliburton’s conduct was negligent.” The court apportioned 67% of blame for the accident with BP, 30% with Transocean and 3 % with Halliburton.

BP is thought to have set aside $3.5bn to cover the costs of fines for the disaster that killed 11 people and spilled oil for almost three months into waters that reach the shores of five states.

The company had taken a $43 billion charge to cover all the costs related to the spill, according to a July 29 earnings statement. The ultimate cost is “subject to significant uncertainty,” BP said.

Source: http://readmt.com

Friday, 26 September 2014

Captain Schettino Lecturer at the University, De Falco Transferred to Coastguard Admin Duties

September 27, 2014.
We already knew that Italy is not the best example of efficiency, fairness and transparency in the world.  We knew also that central and local authorities and institutions are often the cause of a device broken, often corrupted, and inclined to follow the profit and the need of power rather than the principle of meritocracy.

We all remember the drama of almost three years ago when "the brave" captain Schettino abandoned the Costa Concordia vessel after she struck her port side on a reef. "Get on board, get on board for fuck's sake" 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 while almost 100 people were still on board. We all known the tragic ending of that night: 32 people lost their lives in the Italian waters.

Schettino is still facing in the trial charges of multiple manslaughter and abandoning ship; on the other hand De Falco has became a symbol of responsibility, the "voice of the duty" as addressed by the Italian newspaper La Repubblica.

What instead nobody would never have  expected is that Captain Schettino would be prized by being invited to the Sapienza University to hold a seminar on "how to resist and quell panic". Stunning, stunning indeed! Does not this sound like asking to Vito Corleone (The Godfather) to hold a lecture on "the legality and justice in Italy"? To me it really does!  Further, as the Costa Concordia was towed away from Giglio this summer, photographs emerged of the former captain partying on the island of Ischia.

Someone could imagine now that the coastguard official De Falco was awarded with some medals of honour or prized with a promotion. He has not. On Thursday, he has said he is being transferred out of operational service at the Livorno coastguard and into administrative duties. De Falco said he was saddened by the transfer, which he had not requested. He referred to La Repubblica that no one has ever blame him for how he tackled the emergency that night and also admitted his anger suspecting of being a victim of mobbing. He therefore confessed he is considering the possibility either of commencing a legal action or dismiss the uniform.

Indeed, public clarification is expected in the following days so as to illustrate the reason that brought the coastguard officer to be punished. Meanwhile, Italians read this news stunned and even a bit ashamed.

Lorenzo Macchi

Thursday, 25 September 2014

Hyundai Heavy Enters MOU on Development of MOBILE POWERSHIP

September 26, 2014.

Polaris Shipping Co., Ltd., Korea Midland Power Co., Ltd., Hyundai Heavy Industries Co., Ltd., and Siemens Energy Solutions Ltd. signed a Memorandum of Understanding at COEX Intercontinental Hotel in Seoul on December 10, 2013 to develop MOBILE POWERSHIP, an integration of shipbuilding and power generating technology in which a highly efficient power generating facility will be installed onto a FSRU (Floating Storage Regasification Unit) for the very first time in the world.

It is expected that MOBILE POWERSHIP will commence its operation in December 2017 with total investment of U$ 940 Million. When compared to building a power plant on land, the model will substantially reduce civil complaints as it will not require a large scale land. In addition, due to systemized and skillful shipbuilding process, overall construction period will be shortened. In terms of power transmission, MOBILE POWERSHIP will utilize existing cables so that sections subject to new installation will be minimized, which leads to significant cost saving. Once the business model is successfully launched in Korea, it is anticipated to move overseas to selectively target combined cycle power producing market where high yields can be generated.
“MOBILE POWERSHIP is the world’s first invention to integrate a combined cycle power generating facility and liquefied gas storage in which a gas turbine and a regasification unit are directly linked to achieve curtailment of fuel cost. Hence, we are of a view that it can be a smart solution to surging demand for electricity in and out of Korea and a successful business model for the Creative Economy.” commented by spokesperson from Korea Midland Power Co., Ltd.
“This Powership integrates the LNG FSRU, the model first designed and built by Hyundai, with the top-of-the-line combined cycle unit in the capacity of 880 MW, which will give birth to an innovative naval architecture through combination of shipbuilding and plant engineering. We plan to target overseas newbuilding market upon successful launch of the project.” commented by Hyundai Heavy Industries.
“Siemens is delighted to participate in the Powership project based on an innovative business model to share our technical expertise and competitiveness which we have built in the global power producing market. Furthermore, synergy between Siemens’ engineering knowhow and Hyundai Heavy Industries’ world class shipbuilding technology will create a state-of-the-art offshore combined cycle power plant.” stated by Dr. Rochus Bergmann, CEO of Siemens .
“MOBILE POWERSHIP is a mobile power plant with a capacity to promptly manage natural disasters such as earthquake and flood. As the world’s no.1 VLOC (Very Large Ore Carrier) owner in shipping industry, we are willing to bring in our best effort based on experiences in new ship design and trust we have earned from highly valued clients” spokesperson from Polaris Shipping mentioned.
4 concerned parties including Korea Midland Power will launch a Task Force Team after signing the Memorandum of Understanding to closely examine technical issues which will be reflected in the engineering of Powership. It is said that once performance of the Powership is ascertained through pilot project in Korea, then it will be exported to Philippines, Indonesia, Brazil, and other countries where power shortage has become a critical issue. In addition, it is anticipated that the project will firmly position itself as a business model well-suited for South Korean policies under the “Creative Economy” by generating approximately $2 billion per project.

Source:http://worldmaritimenews.com

World Maritime Day 2014

September 25, 2014.

Over the years, IMO has built up an enviable track record for developing and adopting new international conventions. There are some 53 in all.


Collectively, they are aimed either at the prevention of accidents, casualties and environmental damage from ships; at mitigating the negative effects of accidents when they do occur, or at establishing a mechanism for ensuring that those who suffer the consequences of an accident can be adequately compensated.

While most of these are in force and have done so much to make shipping safer, more efficient and more environment-friendly, there are still several conventions for which a slow pace of ratification and a lack of implementation are serious causes for concern. There is no doubt that more can, indeed must, be done in this respect.

The adoption of an IMO convention can feel like the end of a process. A conference is held, the text is agreed, there are handshakes all round. But this should not be where the process ends. Indeed, adoption of a convention should be just the end of the beginning, because an IMO convention is only worth anything if it is effectively and universally implemented. All those hundreds, even thousands of man-hours spent refining the text, all that technical expertise that has been brought to bear, all those studies and all that research count for nothing unless the end result has a tangible impact. And, for that to happen, ratification, widespread entry into force and effective implementation are all needed.
It was with this in mind that the theme for World Maritime Day 2014 – namely “IMO conventions: effective implementation” – was selected. It is a theme that provides an opportunity to shine a spotlight on those IMO treaty instruments which have not yet entered into force, as well as those for which ratification by more States and more effective implementation would yield significant benefits.

The traditional diplomatic reception to celebrate the Day will be held at IMO Headquarters on 25 September 2014. The World Maritime Day Parallel Event will be held in Morocco from 27 to 29 October 2014. 

"At a time when the world is beset by conflict and crisis, it is easy to forget that, day in and day out, the international shipping industry works quietly and efficiently to keep the wheels of global trade in motion and ensure the timely delivery of the goods and commodities on which we all rely.

For more than 50 years, international conventions developed by the International Maritime Organization have made global shipping progressively safer, more secure and more environment-friendly. There are more than 50 in all. Collectively, they are aimed at strengthening maritime safety and security, protecting the marine environment, mitigating the negative effects of accidents or establishing regulations covering liability and compensation for damage.

The real value of those conventions can be fully realized only if they are properly implemented. This entails early entry into force, broad participation, effective policies and programmes, stringent oversight and vigorous enforcement. Shipping States, coastal States and the shipping industry itself all have a part to play.

On World Maritime Day, let us recall the often unheralded but always vital contribution by international shipping to peoples and communities all over the world.  I urge all concerned to strengthen their efforts to achieve the full and effective implementation of all IMO conventions." 
Ban Ki-moon, UN Secretary-General

Source:http://www.maritime-executive.com

The Recast Brussels Regulation: Enhancing the Effectiveness of Jurisdiction Agreements

September 25, 2014.
We consider how the recast Brussels Regulation is aimed at reinforcing exclusive jurisdiction agreements within the EU.
Reforms to the Brussels Regulation (on jurisdiction, recognition and enforcement of judgments in civil and commercial matters in the EU) apply from 10 January 2015. In an article in our Winter 2014 Shipping E-Brief (“The recast Brussels Regulation: reinforcing the arbitration exception”), we considered how certain of the changes might affect the interaction between proceedings in court and arbitration. In this follow-up article, we address a different topic: how the recast Regulation is intended to strengthen choice of court (i.e. exclusive jurisdiction) agreements.

Background - Jurisdiction Under the Regulation

The general rule in the Regulation is that a defendant must be sued in the courts of his country of domicile (Article 2). There are various exceptions – for example, in relation to contract matters (where the defendant may be sued “in the courts for the place of performance of the obligation in question”) and tort (where he may be sued “in the courts for the place where the harmful event occurred or may occur”) (Article 4). A further exception is where there is an exclusive jurisdiction agreement: an EU member state court will have jurisdiction over a dispute where the parties have agreed that it should do so, provided at least one of those parties is domiciled in the EU (Article 23).

The Regulation also provides for what is to happen if proceedings are started in different EU member states in relation to the same cause of action and between the same parties. In that event, the court first seised takes precedence. The court second seised is required to stay its proceedings - until the first court has determined whether or not it has jurisdiction (Article 27).

The lack of flexibility in the application of Article 27 has proved controversial and been widely criticised, not least since it allows for disruptive litigation tactics to flourish. These include the so-called “torpedo” or “Italian torpedo”, where a party prospectively facing a claim takes the pre-emptive step of seeking a declaration of non-liability, usually in his local court, while being fully aware that a court in a different member state is provided for in a jurisdiction agreement. The strategy is aimed at delay and obstruction, and at taking advantage of the strictly applied lis pendens rule in Article 27. In Research in Motion v. Visto Corporation [2008] EWCA Civ153, the Court of Appeal noted that:

“much ingenuity is expended on all this elaborate game playing…A party who fires an Italian torpedo may stand to gain much commercially from it. It would be wrong to say that he is “abusing” the system, just because he fires the torpedo or tries to”.

Difficulties have been caused, not least since the automatic stay in Article 27 has operated regardless of whether the “torpedo” proceedings are started with any genuine belief that the court first seised will ultimately retain jurisdiction. Matters have then been compounded by the fact that some courts are unwilling to decide jurisdiction as a preliminary issue, but will only do so at the same time as hearing the substantive merits of the case.

Issues concerning Article 27 were considered by the Supreme Court in London at the end of last year in The Alexandros T [2013] UKSC 70.In that case, proceedings were brought in Greece by assureds against their insurers, for claims in tort based on Greek law that were associated with the insurers' conduct when handling a total loss claim. The insurers then commenced proceedings in England against the assureds, arguing that the Greek proceedings breached English exclusive jurisdiction agreements. One question was whether the Greek and English actions involved the “same cause of action” for the purposes of Article 27, such that they might give rise to irreconcilable judgments. The Supreme Court held that a claim for damages and/or an indemnity for breach of an English exclusive jurisdiction agreement does not involve the same cause of action as (and is not the mirror image of) foreign proceedings said to be started in breach of that agreement.

The Relevant Reforms

The strict application of the court first seised rule has been relaxed by the re-cast Regulation in situations where there is an exclusive jurisdiction agreement. Article 31(2) of the revised Regulation provides that if the parties have agreed to the exclusive jurisdiction of the courts of an EU member state and proceedings are commenced in those courts, the courts of any other member state in which proceedings have also been commenced shall stay their proceedings. For these purposes, it is irrelevant which set of proceedings was commenced first. It is then for the courts to which exclusive jurisdiction has been granted by the parties to decide whether the jurisdiction agreement is valid and effective.

So precedence to decide on the validity and scope of an exclusive jurisdiction agreement will no longer be given to the court first seised; provided an action is started in the EU court designated in the jurisdiction agreement, the decision on jurisdiction will rest with that designated court.

This revision is welcome and should go some way towards defusing the torpedo and enhancing the effectiveness of jurisdiction agreements.

In addition to this reform of the rules on lis pendens, Article 23 has been amended (becoming new Article 25) so as to extend the scope of jurisdiction agreements. There is no longer a requirement that at least one of the parties must be domiciled in the EU. However, the Regulation does not apply where the exclusive jurisdiction provided for is a non-EU member state court. And it should also be noted that neither new Article 31(2) nor new Article 25 will assist a party in the case of a non-exclusive jurisdiction agreement (although, by Article 25, an agreement as to jurisdiction will be considered to be exclusive, unless the parties have agreed otherwise).

There are also new provisions (new Articles 33 and 34) giving EU member state courts a discretion to stay their proceedings where earlier proceedings have been commenced in the court of a non-EU “third state”. The EU court is not obliged to order a stay, but has a discretion to do so having assessed “all the circumstances in the case before it” (Recital 24). Some of the factors that the EU court may consider in deciding how to exercise its discretion are stated to include: connections between the facts of the case, the parties and the non-EU state concerned, how far the proceedings in the non-EU court have progressed by the time proceedings are initiated in the EU member state court, and whether or not the non-EU state court can be expected to give judgment within a reasonable time. The EU court may also take into account any exclusive jurisdiction clause in favour of the non-EU court in deciding how to exercise its discretion. So whilst a jurisdiction agreement in favour of a non-EU member state does not oblige an EU court to stay its own proceedings, it can be a factor influencing that EU court's discretion as to whether or not to grant a stay.

It is worth noting that the recast Regulation expressly provides that jurisdiction agreements are separable from the main contract (Article 25(7)), so that their validity cannot be contested solely on the basis that the main contract is alleged to be invalid. This reflects the English common law position, as confirmed by the House of Lords in an Ince case in 2007, Fiona Trust v. Privalov.

Comment

These reforms follow a long period of consultation. The UK Government's position was that reform was “an important priority” and the UK has opted into the changes.

Our view is that there was a clear case for changes to be made to the Regulation in relation to exclusive jurisdiction agreements and the impact of the court first seised rule. The strengthening of the protection given to exclusive jurisdiction agreements – and in particular the precedence given to the courts chosen by the parties, to decide on the agreement's validity and application - is an overdue change, but one that is most welcome.

ABOUT THE AUTHOR: Ian Chetwood, Reema Shour
A partner for 20 years, Ian’s practice embraces shipping cases and large scale commercial disputes in court proceedings, arbitrations and ADR for clients around the world.

Copyright Ince & Co LLP

Source: http://www.hg.org

Wednesday, 24 September 2014

Court of Appeal gives broad meaning to “charterers’ agents” in off-hire clause


September 24, 2014.
NYK Bulkship (Atlantic) N.V. v. Cargill International S.A. (Global Santosh) [2014] EWCA Civ 403.
The Court of Appeal recently considered the meaning of “charterers’ agents” for the purposes of a proviso to an off-hire clause in a case involving the arrest of a vessel that was time chartered on the NYPE form.

The background facts

By a charterparty dated 11 September 2008 on an amended NYPE form, NYK time chartered the Global Santosh to Cargill. Cargill sub-chartered the vessel to Sigma, by way of a voyage charter, for a shipment of cement sold by Transclear, also a sub-charterer of the vessel under a voyage charter, to IBG. Under the contract of sale, IBG was responsible for the unloading of the cargo and was liable to pay Transclear demurrage if unloading of the cargo was delayed.

Upon arrival at the discharge port, the vessel was held at anchor due to the breakdown of IBG’s unloader. Over two months later, she was eventually called in to berth. However, Transclear had obtained an Arrest Order on the cargo the day before to secure a claim for demurrage against IBG for $1,560,000. The Order prohibited any attempt to remove the cargo from the vessel, but also mistakenly named the vessel as the object of the arrest. Discharge only began nearly a month later.

Cargill withheld hire for the period during which the vessel was under arrest. NYK sought the payment of hire and the dispute was submitted to arbitration.

Arbitration and Commercial Court decisions

Clause 49 of the charterparty provided as follows:

“Should the vessel be captured or seizured or detained or arrested by any authority or by any legal process during the currency of this Charter Party, the payment of hire shall be suspended until the time of her release, unless such capture or seizure or detention or arrest is occasioned by any personal act or omission or default of the Charterers or their agents.”

The question in issue was therefore whether the arrest was “occasioned by any personal act or omission or default of the Charterers or their agents”, i.e. whether it had been caused by the personal act or omission or default of Transclear or IBG, as Cargill’s agents. If the answer was ‘yes’, then Cargill was not entitled to put the vessel off-hire under Clause 49. If the answer was ‘no’, the proviso did not apply and Cargill was right to put the vessel off-hire for the period in question.

The arbitral Tribunal, by a majority, found that neither Transclear nor IBG were acting as Cargill’s agents and therefore the proviso did not apply. This decision was reversed by Mr Justice Field on appeal. The Judge found that IBG had become Cargill’s delegate of the obligation to unload under the charterparty by reason of the sale contract. For the purposes of Clause 49, the failure to unload within the lay days was an act, omission or default that occurred in the course of performing the obligation to discharge as delegated to it by Cargill.

The Court of Appeal

The Court of Appeal was unanimous – 3:0. The judgment was given by Lord Justice Gross, a judge with long experience of shipping law. He dismissed the appeal and upheld Mr Justice Field’s ruling in favour of NYK. The ship was on-hire for the period of the arrest. The proviso did apply. However, he reached his view on a different basis from Mr Justice Field.
He agreed that the proviso applied to agents in the broad sense. As he put it, you look at who the actors are. Delegates of cargo can be agents for the purpose of the proviso, irrespective of the precise contractual relationship between them. They can include sub-charterers, sub-sub-charterers and receivers.

But Lord Justice Gross took a different line from Mr Justice Field on the relevance of the acts covered by the proviso to Clause 49. In his view, there was nothing there to restrict the application of Clause 49 to acts occurring in the course of the performance by the delegate of the delegated task. It was enough that the act of the delegate occasioned the arrest or detention of the vessel.

The Court of Appeal was in no doubt that on the act/actor analogy, the vessel’s arrest had been occasioned by an act or default of an agent of Cargill. The relevant actors were Transclear as well as IBG. Lord Justice Gross approached things by looking at which side of the line the problem fell on. Was it on NYK’s side or Cargill’s? He concluded that it fell on Cargill’s side of the line. It involved Cargill’s delegate. NYK was not involved in the dispute between Transclear and IBG about the delay. True, Cargill was under no obligation either to discharge the vessel in a given time – their charter was a time charter. However, the proviso was not limited to Cargill’s contractual obligations; what mattered was that the dispute arose out of their trading arrangements for the vessel.  The general scheme of Clause 49 provided for the vessel to be on-hire or off-hire depending on which side of the line things fell.

Comment

This decision gives a broad meaning to “charterers’ agents” under a clause like this. It can include the whole chain of parties, down to the sub-charterers and the receivers. It remains to be seen how and to what extent this broad reading will be adopted for other provisions of dry time charters.

The decision will be welcomed by shipowners. Each case will depend on its facts, but the balance now seems to have shifted towards a more equal approach. The risks of the arrest will be borne by the party who is the most closely related to it – depending on which side of the line the matter falls.

The Court of Appeal’s reasoning was based on the approach of the Supreme Court recently in the Rainy Sky case, in which Ince acted for the successful shipowners. The Supreme Court ruled that where a contract term is capable of two meanings, you should prefer the meaning which is more consistent with business commonsense – and that, in doing so, you should look at (a) the clause; (b) the contract as a whole; and (c) its commercial context. That is what Lord Justice Gross did in the Global Santosh.

Article authors: Florence Preux

Source: http://incelaw.com

Sunday, 21 September 2014

BIMCO Publishes Clause Addressing Electronic Bills Of Lading

September 18, 2014.

BIMCO has recently developed and published a charter party clause that specifically addresses the use of electronic bills of lading. Increasing use of electronic documentation, particularly in the dry cargo sector, has resulted in a growing user demand from owners and charterers. In response to this demand, BIMCO brought together a group of charterers and owners to develop a new clause for charter parties that specifically addresses the use of electronic bills of lading (paperless trading) systems.

Today there are two platforms at the forefront of developments in electronic bills of lading systems – essDOCS and Bolero – both of which have been approved by the International Group of P&I Clubs (“the International Group”) as well as by P&I Clubs outside the group.

The use of electronic bills of lading is said to offer benefits both to charterers and owners in streamlining the documentation process and reducing the risk of fraud. The purpose of BIMCO’s new Electronic Bills of Lading Clause is to provide a contractual agreement to permit the use by charterers of the essDOCS and Bolero systems for bills of lading, waybills and delivery orders. The clause effectively confers on electronic bills of lading the same status as paper bills of lading under the terms of the charter party. The full wording of the Electronic Bills of Lading Clause is as follows:

BIMCO Electronic Bills of Lading Clause

(a)At the Charterers’ option, bills of lading, waybills and delivery orders referred to in this Charter Party shall be issued, signed and transmitted in electronic form with the same effect as their paper equivalent.

(b)For the purpose of Sub-clause (a) the Owners shall subscribe to and use Electronic (Paperless) Trading Systems as directed by the Charterers, provided such systems are approved by the International Group of P&I Clubs. Any fees incurred in subscribing to or for using such systems shall be for the Charterers’ account.

(c)The Charterers agree to hold the Owners harmless in respect of any additional liability arising from the use of the systems referred to in Sub-clause (b), to the extent that such liability does not arise from Owners’ negligence.

A BIMCO Special Circular containing the full wording of the Electronic Bills of Lading Clause with an accompanying explanatory note can be downloaded at BIMCO’s website.

The Position of the P&I Clubs within the International Group with regard to paperless trading

Already from 1998, the Association together with other P&I Clubs in the International Group has reviewed progress on electronic trading systems. Please find Circulars from 11 December 1998 and 5 October 1999 (and subsequent circulars) on our website.

Until February 2010, the Rules of all of the Clubs comprising the International Group specifically excluded liabilities in respect of the carriage of cargo under all electronic trading systems to the extent that the liabilities under such systems would not have arisen under a ‘normal’ paper system, using transferable paper documentation.

The International Group, after reviewing a number of electronic trading systems, agreed in 2010 that liabilities arising in respect of the carriage of cargo under such systems would be covered from 20 February 2010 provided that the system had first been approved by the International Group. The Circular can be found on Skuld’s website.

Approved Systems

The two systems currently approved by the International Group are the ones administered by

ess DOCS version called DSUA 2013.1 (into effect as of 18 March) and it enables electronic trading both in respect of bills of lading and waybills. This version supersedes the essDOCS previous electronic trading system version DSUA 2009.3, which remains approved for the purposes of Club cover (cf. the 2013 Circulariv) and
Bolero International Ltd. (the Bolero system – Rulebook/Operating Procedures, September 1999).

Cover Position

Members should be aware that traditional exclusions of cover under Club Rules relating to the carriage of cargo, will of course continue to apply in respect of essDOCS and Bolero in the same way as for paper systems, e.g. discharge at a port or place other than the port or place provided for in the contract of carriage, the issue/creation of an ante- or post-dated electronic document/ record, delivery of cargo without the production of the negotiable electronic document/record.

Non-covered Risks

The 2010 and 2013 Circulars also clarify that using an electronic bill of lading may expose members to liabilities which are not of a traditional P&I nature.

This is a reference to the types of liabilities members face when using any electronic system or electronic interface in their office or on their ships, for example the risk of viruses, “hacking”, or the accidental release or theft of information.

Further liabilities may include, for example, those which arise under the contractual arrangements, which members have to make directly with the system operator (Bolero or essDOCS or other,non-approved systems), such as obligations to maintain computer links, or the introduction of a virus within the operator’s or a user’s system.

The user agreements also contain undertakings of confidentiality and could give rise to liabilities, if broken. All of these risks are non-marine risks, and may be covered by members’ own business insurances. These are not in the nature of P&I risks. In insurance terms, they may be described as”cyber-risks” or business risks.

Please find further helpful information about paperless trading in the International Group’s FAQs dated 6 August 2013. In addition, BIMCO has compiled a list of FAQs  for its members that answer many of the questions about the use of electronic bills of lading

Feedback requested

Finally, the Association encourages its members who are using either of the two approved electronic trading systems, to report to us that they are doing so and of any benefits or difficulties which they encounter, legal or practical, in the operation of either system. This information would be helpful to the International Group, in monitoring the use and development of the two systems.

Practical Advice on how paperless trading works

We recommend that members consult the websites from those organisations providing the two systems that are approved by the International Group to familiarise themselves with the systems and how paperless trading works.

Reference: skuld.com

Source: www.marineinsight.com

Thursday, 18 September 2014

How Will Scottish Independence Impact Maritime Industry?



September 18, 2014.

The long-awaited vote on the Scottish independence taking place today has seen international maritime players raise concern on the possible effects of the vote on the Scottish maritime industry.

According to Moore Stephens’s recently conducted survey of the international shipping community members on the impact of the vote, over half of respondents (55 % ) felt the vote could have a negative effect.

The results of the survey showed that, overall, the majority of those who predicted negative effect had an existing business relationship with Scotland, while those respondents with no existing business relationships with Scotland thought that a Yes vote would have a positive effect.
However, 74 % said they had no plan of action if Scotland voted to abandon the Union, indicating a high level of confidence in a No vote, according to the survey.

Cassie Forman, Moore Stephens director of Shipping and Offshore Maritime, said: “The shipping and offshore maritime industry is a vital part of the Scottish economy – it plays a critical role in the North Sea oil and gas industry, for example. It is an industry that will play a central role in the economic fortunes of Scotland whatever the outcome of the vote.”

The UK Chamber  of Shipping has raised various issues concerning shipping that should be addressed by Scotland, should the majority vote Yes.
According to the UK Chamber, obvious questions include establishment of a separate ship registry and MCA; taxation of shipping, followed by potential introduction of work permits and trade restrictions, seafarer training standards along with funding and provision of marine safety infrastructure (coastguards, lights, emergency tugs etc).
Having in mind that not too many ships are calling at Scottish ports, the Chamber President Ken MacLeod, was quoted by BBC as asking: “Are ships calling at a Scottish port going to have to pay four times the dues that they pay at the moment?”
The Scottish Government said that these issues would be addressed in a form of consultation with relevant stakeholders after the referendum.

The future of the oil and gas sector are also a key issue in the debate. Energy and research consultancy group Wood Mackenzie says the issues to be addressed in the event of a ‘Yes’ vote include fiscal (un)certainty, the offshore boundary and regulatory change.
Wood Mackenzie says that oil and gas companies will be closely following the result of the referendum, and the potential issues which might arise in the event of a ‘Yes’ vote, but of more pressing concern to the industry is the underperformance of exploration and production on the UK Continental Shelf (UKCS).

“Fiscal uncertainty is a chief concern of oil and gas companies in the UKCS and there is an ongoing review of the industry’s fiscal terms.  Regardless of which government is in charge of the industry, companies will seek stability and simplicity around existing fiscal terms as well as tax incentives for harder to produce reserves.  Industry engagement will be paramount to maximising value for both government and companies,” Wood Mackenzie said.

“We estimate that by 2030 nearly US$9 billion of tax relief will be claimed in respect of decommissioning spend on Scottish fields. This relief has been guaranteed through the Decommissioning Relief Deeds (DRDs) that exist between licence holders and the UK Government. The Scottish Government has stated that it will provide similar contractual certainty on decommissioning tax relief in the event of independence.”

In addition, Wood Mackenzie explained that a border for oil and gas activities would need to be negotiated, as prolonged dispute could cause uncertainty and negatively impact the investment plans of companies active in the disputed area.
Wood Mackenzie forecasts that the bulk of UK oil and gas reserves lie in Scottish waters, and forecasts that an independent Scotland would control the vast majority of production as well as the most prospective acreage.

In terms of remaining reserves, Wood Mackenzie estimates that circa 15.3 billion barrels of oil equivalent remain in the UK.  This comprises reserves which are being produced, yet to be produced and yet to be found:  the Scottish portion of commercial reserves is 84%.
Over 2,600 polls have opened across Scotland since early this morning and a high turnout is expected from over 4.2 million registered voters. The results are expected early Friday morning.

Source: www.worldmaritimenews.com