Author: nlnnpc-mashinaki

A recent judgment of the Rotterdam District Court dealt with the impact of a so-called “exoneration signs” on the liability of the stevedores for damage to a vessel during loading or discharging operations. Based on the judgment, we will summarizes the requirements an exoneration sign must meet in order for a stevedoring company to successfully avoid liability for damage caused during cargo operations.

Identifiable and clear: First, an exoneration sign must be identifiable and be clear as to the terms and conditions it imposes. This means that the sign must be sufficiently visible and that the text can be clearly read, including in the evening and at night by the means of appropriate lighting. In addition, the wording should be easy to understand without requiring specific knowledge or training.

Specific: Secondly, the text should specifically identify the risks which the company is seeking to exclude. General wording such as: “we exclude liability for any damage” is not sufficient.

Damage: The facts and circumstances under which damage was caused are relevant in determining whether an exoneration sign may be relied upon, in particular:

• The cause: If the damage is of a type which frequently occurs during loading or unloading, such as a scratch or dent to the cargo hold, it is more likely the stevedoring company will be able to rely on an exoneration sign whereas the more unusual the type of damage, such as damage to a bridge due to contact with a container, the less likely it is to succeed. The basis for this is whether or not the shipowner could reasonably have anticipated that the type of damage could occur;
• The reason for which the vessel is at the berth: Usually a vessel is instructed to a particular berth by a charterer. In those circumstance the shipowner has no choice but to proceed as instructed without an opportunity to seek advice or to refuse those instructions if it does not accept the terms as set out in the exoneration sign; and
• Frequency of attendance: If the vessel regularly comes to the same quay, it is more likely that an exoneration board will apply given that the shipowner will be familiar with their contents.

Whether or not an exoneration sign will allow a stevedoring company to avoid liability ultimately depends on the facts and circumstances of each case. If you have any questions regarding a particular incident or advice regarding the impact an exoneration sign on your legal position, please feel free to contact us.

We regularly receive requests for advice or reports of disputes regarding the absence of a VAT declaration after the purchase and/or sale of pleasure boats. Many contracts state that a boat is delivered VAT-free. However, it is often not specified what kind of evidence is necessary top roof the boat is indeed VAT-free. A VAT declaration can prove that in the past -often at first purchase- a sales tax (VAT) was paid to the Dutch Tax Authorities on the vessel and that this VAT was not refunded by the Tax Authorities.

In a recently reported dispute, a potential buyer of a pleasure boat wanted proof that the boat could indeed be transferred VAT-free. The boat had been purchased VAT-free ten years earlier but no declaration had been handed over at the time of purchase. The policyholder still wanted to obtain the statement but was told by the then seller that he did not have a statement either. This ment that the policyholder needed to obtain a new declaration. This can easily cost 1,000 euros if it is requested from customs. On behalf of the policyholder, we then wrote to the original seller requesting that our policyholder shoold be compensated for requesting such a declaration.

To avoid this kind of situation we advise to explicitly state in a purchase contract that the vessel is free of any VAT charges and that the seller provides the buyer with a VAT statement. The declaration will have to be made available at the time of transfer as sole written evidence, like, for example, the original purchase invoice. This will prevent you from having to request a new declaration years later in the event of a sale, with the risk of having to bear the costs yourself.

An award in a recent London arbitration provides insight into the legal risks that arise if a charterer instructs the shipowner to perform additional work not provided for in the in the charter party or in an addendum.

In the underlying case, the parties had concluded a charter party for a single voyage with one port of discharge. The cargo was refused at the intended port of discharge because the cargo did not meet the required import specification. The charterer subsequently nominated a second port where the cargo was again refused, after which the charterer instructed the shipowner to discharge the cargo in two separate alternative ports. The parties had an addendum to the charter party for the change in instructions, however without explicitly agreeing on the additional freight or extra expenses.

As a result of the problems with the cargo, the voyage took considerably longer and the shipowner requested payment of additional freight and costs from the charterer. The charterer refused to compensate the shipowner arguing that there was no agreement to do so in the Charterparty or addendum. Since no agreement had been made in the addendum and the parties could not agree on a settlement, the case was submitted to arbitration. The shipowner argued that since the addendum did not contain any agreement regarding compensation for the additional work, the tribunal should order payment of additional reasonable compensation. However, the tribunal ruled against the shipowner and concluded that the parties had laid down their agreements about the additional work in the addendum without additional compensation and therefore there was no room to award additional compensation.

We advise our members to ensure that before any additional work is done, either a suitable clause is contained in the charterparty or an addendum is drawn up setting out the compensation payable to the shipowner. Our members can of course always contact us at claims@nnpc.nl for further advice on this issue.

Recently, the Court of Antwerp rendered judgment in a case we had been handling since March 2018. It concerned contamination of a cargo of liquid fertiliser on board an inland vessel, pursuant to which the receivers had refused to take delivery of the cargo. After a long delay, the vessel was finally discharged a month after arriving in the discharge port.

The cargo had been loaded in Antwerp under the supervision of the shipper and their surveyor. During the negotiation of the Charterparty terms, the owner had clearly informed the charterers that the cargo tanks would not be cleaned but only ventilated based on the previous cargoes carried on board. In light of the fact that the owner had clearly described the condition of the holds and this had been accepted by the charterer, the responsibility for the suitability of the holds to transport the cargo in question had passed to the charterer.

As a significant cargo claim had been filed against the owner, we conducted an extensive investigation into the cause of the contamination. It turned out that there was contamination right from the start of the loading operations and the shipper and the surveyor were aware of this, however they decided to continue loading the cargo. The court determined that the master reasonably assumed that the shipper knew what they were doing given that he had been clear in advance about the condition of the holds and they were represented by a surveyor. Unfortunately, it turned out that the information about the condition of the holds had gotten stuck somewhere in the chartering chain. However, the court concluded that this did not take away from the fact that the shipper had decided to continue loading despite the fact that contamination had already been detected.

In addition to the cargo damage, a considerable amount of demurrage had been accrued by the owners. The charterers had rejected this claim on the basis that the shipowner was responsible for the contamination and was therefore not entitled to recover his loss of time. At the end of last year, we already wrote an article (available on our website here) about the right to claim for demurrage in the event of cargo damage.

In its judgment, the Court of Antwerp ruled that the owner could not be held liable for the contamination as he had complied with the obligation to provide information about the condition of the holds in advance. In addition, it was the responsibility of the shipper, who knows his cargo best, to judge whether his cargo can be loaded on board the ship and to ensure that the loading proceeds properly. The judge ruled that the owner was entitled to full payment of the demurrage, given that even if the owner had been (partly) responsible for the contamination, the receivers should have taken action to unload the ship earlier and to mitigate their damages.

With effect from 1 January 2021, new legislation and regulations will apply with regard to compulsory pilotage in the North Sea Canal area. In general terms, this change means that a new PEC structure has been introduced and that the Small Seagoing Vessels Register and the possibility of exemption from compulsory pilotage for seagoing vessels up to 95 metres has been revoked.

Applications for the transition permission must be submitted before 1 July 2021. This applies to the temporary PEC Small Seagoing Vessels and the temporary PEC for sand- and gravel vessels and to vessels that have been in one or all seaports areas in 2019 and/or 2020. A PEC must be requested for each area, vessel and captain. For temporary PEC for small sea-going vessels, only vessels that were formerly in the Small Seagoing Vessels Register are eligible. The temporary PEC’s will be issued to the captain or chief mate.

For more information please refer to the PEC’s information guide:
https://www.portofamsterdam.com/sites/default/files/2021- 1/Informatiegids%20PECs_0.pdf

Over the past year, we have seen an increase in the number of attempts by stowaways to reach the United Kingdom on board members’ vessels. We have seen this trend continue in the first quarter of 2021 and we would therefore like to draw the attention of our members to the need for extra vigilance when trading between English ports and the European mainland and/or Africa, especially northern Spanish, French or North-African ports. We note that ships sailing on a fixed rotation to UK ports appear to be targeted in particular.

The presence of stowaways on board not only poses a potential danger to the safety of the ship and crew, but will in most cases lead to a disruption in the sailing schedule, with delays and costs as a result. In addition, we see a hardening in the post-Brexit position of the UK authorities. Where these previously where generally co-operative with regard to the admission of stowaways and asylum procedures, there is now a tendency towards requiring repatriation of the stowaways including the potential of fines for the owner (this is usually set at GBP 2,000 per stowaway by default).

We advise our members and the crew their ships to pay extra attention to the risks of stowaways in particular when calling Northern Spanish, French and by extension North African ports. We specifically refer to the recommendations set out in our Loss Prevention guide Stowaways (downloadable from the NNPC website). It is also important to ensure that the measures taken by the ship are properly documented so that they can be used to defend the interests of the owner if and when a fine is imposed by the English authorities.

In case our assistance is required, or in case of specific questions or concerns regarding this matter, members should contact us at claims@nnpc.nl

In September 2014 we handled a matter on behalf of the owner of an inland vessel involving project cargo which had been severely damaged after hitting a bridge and for which a substantial claim had been pursued by the cargo interests. A couple of years after the incident the matter was heard by the Court of Rotterdam which ruled that the shipowner could not be held liable for the damage. As the decision was not appealed we are now in a position to report about the matter.

During the investigation into the cause of the collision with the bridge, it emerged that shipowner had been informed by his charterers and the shipper that the cargo had a maximum height of 12 meters whereas the actual height turned out to be 13 meters. Since the shipowner had used the dimensions provided to prepare the voyage, it was clear that the cause of the incident could be traced back to the incorrect cargo information and not to an error on the part of the shipowner. In the opinion of the court the Master had allowed sufficient margin assuming that the cargo was 12 meters high and that was satisfied that the difference was not visible to the naked eye. The court ruled that in accordance with article 6 CMNI that the shipper and the charterer must guarantee the accuracy of the cargo specifications which it had communicated with the carrier. They are therefore responsible for all damage and costs incurred by the carrier (article 8 CMNI) and in turn, could not hold the shipowner liable for damage to the cargo. On this basis, the court ruled in favour of the shipowner holding that he was not liable for the damage to the cargo or the further consequences of the incident.

We are of course pleased with the outcome of the case, however we would like to advise all members and insureds to request the full specification of the cargo prior to each voyage and, in case of doubt, to immediately notify the charterer and shipper with the request to verify the accuracy of the specifications of the cargo and suitability of the cargo dimensions for the intended voyage.

The BIMCO has published a “Just in Time” clause for voyage charters, in particular for the bulk sector. The “Just in Time” principle aims to ensure greater efficiency and reduce CO2 emissions. The intent of the clause is to facilitate the sharing of certain information to allow the owners and the charterer to optimize the time of arrival without deviating from their normal obligations under the charter party.

BIMCO hopes that with this clause, parties can limit their fuel consumption, emissions and waiting times. The clause gives the charterers the right to ask owners to optimize the speed of the vessel to meet a specified arrival time. The safety of the vessel will always be paramount and any request for speed adjustments must remain within safe an operational limits. The clause requires charterers to include reference to the requirements of the clause in the bill of lading and waybills to prevent the owners from breaching their obligations towards the cargo interests. A copy of the clause can be found below.

We are happy to assist our members if they need advice or assistance.

BIMCO Just in Time Arrival Clause for Voyage Charter Parties 2021

(a) The Owners and Charterers shall use their best endeavours to obtain and share information regarding the Vessel’s arrival time, this shall include, but not be limited to, information from, or required by, any relevant third party. Any port specific requirements shall be met.

(b) Notwithstanding any other clause in this Charter Party, the Charterers shall be entitled to request the Owners in writing to adjust the Vessel’s speed to meet a specified time of arrival, or closest thereto, at a particular destination. Such request shall always be subject to the Owners’ consent which shall not be unreasonably withheld and, in the case of an approach voyage, also subject to agreeing an amended cancelling date. The Charterers shall not be entitled to request an adjustment of speed outside the normal safe operational limits of the Vessel.

(c) Extra time used on a sea voyage as a direct consequence of the Vessel adjusting speed pursuant to the Charterers’ request shall be the difference between:

(i) the “estimated time of arrival” as provided by the Vessel prior to the Charterers’ request to adjust the Vessel’s speed to meet a specific time of arrival, or closest thereto, at a particular destination; and

(ii) the “actual time of arrival” at that particular destination, or closest thereto.
Such extra time shall be compensated by the Charterers to the Owners at USD ___ per day pro rata or as otherwise agreed by the parties which shall take into account the savings in fuel by the Owners and shall be payable by the Charterers to the Owners, prior to completion of final discharge.

(d) Where the Vessel proceeds at a speed adjusted in accordance with subclause (b), this shall constitute compliance with, and there shall be no breach of, any obligation as to despatch and shall not constitute a deviation.

(e) The Charterers shall ensure that the terms of the bills of lading, waybills or other documents evidencing contracts of carriage issued by or on behalf of the Owners provide that compliance by Owners with this Clause does not constitute a breach of the contract of carriage. The Charterers shall indemnify the Owners against all consequences and liabilities that may arise from bills of lading, waybills or other documents evidencing contracts of carriage being issued as presented to the extent that the terms of such bills of lading, waybills or other documents evidencing contracts of carriage impose or result in the imposition of more onerous liabilities upon the Owners than those assumed by the Owners under this Clause.