Following the AGM the Association held a virtual version of its annual Spring Seminar, hosted by Quadrant Chambers, at which speakers highlighted some of the issues of topical relevance in maritime dispute resolution.
Andrea Skeoch of North P&I Club addressed the fallout of the Covid pandemic, flagging up what possible legal issues might arise as suggested by the type of claims the insurer was already seeing, although “few of these have worked their way through the system yet to reach arbitration”. However, this may soon change, she suggested, especially since the recent spike in the dry bulk market meant delays may have resulted in considerable financial losses.
The main sources of dispute likely to arise from Covid include: Refusal to call at port; Crew changes; Quarantine and crew illness; Force majeure; and Laytime, Skeoch said. These are likely to include many complex and contentious issues – often related to the BIMCO Infectious or Contagious Disease Clause incorporated in charterparties or bespoke variations thereof, “some of which are charterer friendly and some owner friendly”.
Examples of thorny issues cited by the insurer included: in the case of crew illness, was this a result of the charterers’ trading pattern for the vessel or the crew’s own negligent safety precautions? Who should be responsible for any penalties or fines incurred for seafarers having exceeded the allowed maximum length of service onboard? And had health security restrictions in place at ports and/or non-availability of transport resulting in breach of laytime actually “prevented” the loading or discharging of cargoes or merely “delayed” it?
“So… let the arbitrations begin”, she concluded.
“We must look forward to a lot of disputes arising out of Covid”, reckoned seminar chairman Bruce Harris, who thanked Skeoch for the examples of the types of Covid-related claims encountered by insurers, which he agreed would in due course “come to us [arbitrators] to determine – not an easy task, I feel”.
Separately, Darryl Kennard of Penningtons Manches Cooper delivered a presentation on the recent arbitration in the case of the ‘Tai Prize’ where a cargo of soya beans was alleged to have been discovered damaged on arrival in China, ascribed to pre-shipment damage or ‘silo burn’. Here the dispute hinged on the definition of the cargo as in “apparent good order and condition” in the bill of lading that the ship’s master had signed without clausing, and whether a charterer’s presentation of a clean bill of lading to the master for signature amounted to a representation that the goods were not subject to inherent vice.
“It’s the master’s eye that counts”, informed Kennard. The Court of Appeal had held that no such representation was made by the charterer or shipper in such circumstances. It remains to be seen if the Supreme Court will agree to hear an appeal in the case.
Emmet Coldrick of Quadrant Chambers spoke about the dispute concerning the ‘C Challenger’, where the ship’s speed and consumption data was allegedly misrepresented in pre-contractual discussions, and which raised the question whether the charterer’s subsequent attempt to rescind the contract was justified and lawful.
The dispute involved several technical issues surrounding the precise wording of charterparties and grounds for their rescission, but an overriding “lesson for owners is that factual statements that you make about the performance of your vessel could come back to bite you even if the relevant statement as to the performance of the vessel was not incorporated in the fixture recap or charterparty”, Coldrick concluded.
A recording of the webinar is available HERE.