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Legal Corner

Legal Corner

The strive towards clarity

Legal update from Triton 1-2017

In times of, seemingly, increased unpredictable events it is pleasing to note developments towards clarity. To this end, courts and other legal institutions have an important task to fulfil.

The London Maritime Arbitrators Association (LMAA) and Swedish Chamber of Commerce (SCC) have both recently assumed this task in reviewing and updating their respective rules for arbitration.

Indeed, the devil is in the detail and whether an arbitration institution is successful will largely depend on whether its rules governing the arbitration cater for sound dispute resolution. The task is not easy; arbitration is voluntarily and the rules must be firm and authoritative on the one hand, and allow for flexibility on the other hand. Notable changes to the LMAA terms are:

  • The limit for the Small Claims Procedure is increased from USD 50,000 to USD 100,000.
  • LMAA, instead of High Court, is to make default appointment of an arbitrator.
  • The Tribunal can ask any of the parties to provide security for its costs.
    The Tribunal has power to make procedural directions.
  • Parts 36 offers shall not apply to arbitrations. Sealed offers apply however there is no guidance how costs following a sealed offer should be apportioned
  • A checklist has been reintroduced.

Keep the beans dry

The Court of Appeal has helpfully clarified the burden of proof in inherent vice cases. In Volcafe Ltd and others v. Compania Sud Americana de Vapores SA [2016] EWCA Civ 1103 a cargo of green coffee beans arrived wet and the shipowner argued this was not due to any fault by the vessel but instead the cargo’s inherent vice.

Green soy beansThe court agreed and held the inherent vice defence can apply to entirely normal cargoes and held further that the shipowner does not have the burden to prove he was not negligent after inherent vice has been established. Further, the court clarified that standard industry practice was adequate when assessing whether cargo has been properly cared for.

Get your act together

Another useful clarification has been rendered by The Commercial Court in Transgrain Shipping (Singapore) PTE Ltd v. Yangtze Navigation (Hong Kong) Co Ltd & Anor (MV Yangtze Xing Hua) [2016] EWHC 3132 (Comm). A cargo of soya beans was discharged in a damaged condition. It transpired the cargo had started to overheat because it had been stored on board the vessel for four months at the discharge port, on charterers’ instructions.

The question was whether the charterers were liable for the damages even if the instruction to wait with the discharge was not necessarily a fault. The relevant contract – the Inter-Club Agreement – provided if a loss is due to ‘act or neglect’ by one party, that party shall bear 100% of the loss. The court held ‘act’ in the Agreement mean simply an act and does not presuppose negligence of any kind. Hence, the instruction to wait with the discharge rendered the charterers 100% liable. Clear as crystal.

 

 Anders Leissner
Director, Corporate Legal & FD&D


Previous Legal Corner articles 

Use your head - Triton no 3 2016
Leading OW Bunker case finally decided - Triton no 2 2016
Guidelines on place of refuge - Triton no 1 2016
It’s not what you do, it’s how you do it - Triton no 3 2015
Reflections - Triton no 2 2015 
A wreck removal convention ahead - Triton no 1 2015
We need to talk - Triton no 3 2014
What it is all about - Triton no 2 2014
The Shipping Blue(s) - Triton no 1 2014

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