Emerging Incident: Fred Olsen Cruise Ship "Boudicca" on fire off the coast of Spain (25 January 2015)

Early reports are outlining an incident onboard the cruise ship "Boudicca", which appears to have gone on fire whilst sailing off the coast of Spain as part of a Mediterranean cruise.

Vessel: Cruise Ship "Boudicca" (IMO No. 7218395)

P & I Club: Skuld

GT: 28,551

Build: 1973 (42 years old)

Flag: Bahamas

Operator: Fred Olsen Cruise Lines Ltd.

Numbers Onboard: up to 850 passengers potentially onboard. 

Voyage: Unknown.

Incident: Further details are awaited on the extent of the incident. At present there are reports from passengers that a fire began in the Engine room at 4am, whilst the vessel was sailing off the coast of Morocco. The ship took on a list, and passengers were awoken and told to put on emergency life jackets. The vessel is now thought to be operating under auxiliary engines and sailing towards Lanzarote.

Emerging Incident: " Hoegh Osaka " Vessel Grounded near Southampton (4 January 2015)

In what seems to have been a disastrous few weeks for the Scandinavian P&I Clubs the huge 51,770 GT "Hoegh Osaka" car carrier, which we understand is entered with Gard, has run aground on a sand bank whilst leaving Southampton for Bremerhaven. 

When there are cars onboard it is common for the manufacturer's to refuse to honour the warranty, so they often have to be destroyed. As a result the insurance claim could be huge, even if she is refloated successfully. 

How such a modern, advanced ship, with such a high-value cargo onboard, can run aground on a fairly routine voyage to the UK, is not yet known. Thankfully all the 25 crewmembers have now been safely rescued.

Vessel: Car Carrier "Hoegh Osaka" (IMO No. 9185463)

P & I Club: Gard

GT: 51,770

Build: 2000 (14 years old)

Flag: Singapore

Operator: Hoegh Autoliners AS

Numbers Onboard: 25 crew

Voyage: Southampton, UK to Bremerhaven, Germany.

Incident: The vessel was laden with a mixed cargo of vehicles and departed Southampton around 8pm on Saturday night (3 Jan. 2015). Whilst navigating Bramble Bank she appears to have veered towards portside and grounded on the sand, taking on a 45 degree list. All crew were safely disembarked eventually and salvage efforts are understood to be underway. 

Emerging Incident: " Cemfjord " Vessel Capsized off nr Orkney Islands (3 January 2015)

News is now being reported of a cargo ship found abandoned and upturned in the Pentland Firth (between Mainland Scotland and the Orkney Islands). The vessel is the "Cemfjord" and she was spotted capsized by the passing Orkney ferry.

She appears to have been carrying cement from Denmark to the UK, and voyages of cement from Scandinavia appear to have been the mainstay of her operations; hence the name. Given the recent press about liquefaction there will be questions about whether the cement cargo mixed with, or turned to, water which brought her down. 

("Cemfjord" at sail last year)

(Capsized "Cemfjord" spotted 3 January 2015)

Vessel: Cement Carrier "Cemfjord" (IMO No. 8403569)

P & I Club: Skuld

GT: 1,850

Build: 1984 (30 years old)

Flag: Cyprus

Operator: Brise Schiffahrts GmbH

Numbers Onboard: 8 crew

Voyage: Aalborg, Denmark - Runcorn, UK.

Incident: It is not yet clear what happened, other than some sudden and unexpected event which seemingly gave no notice for the crew to take to lifeboats, nor allow the Captain to issue a distress call. If the incident had been in say Indonesia, liquefaction may come to mind as a possible cause, but given the stringent controls in place in Denmark this seems less likely. As there does not appear to have been a distress call and as the sailing conditions at the time of loss have been described as 'pretty, pretty awful' by the local RNLI, a rogue wave seems the more likely explanation. 

Emerging Incident: " Norman Atlantic " Vessel Fire off Corfu (28 December 2014)

News is now being reported of the passenger ferry fire off the coast of Corfu, Greece. As usual, most of the news channels are focusing on a fairly narrow personal-story perspective, but below are the relevant details for the marine world.

Vessel: Ro-Ro Ferry "Norman Atlantic" (IMO No. 9435466)

P & I Club: Gard

GT: 26,904

Build: 2009

Flag: Italy

Operator: Visemar di Navigazione Srl

Numbers Onboard: 422 Passengers, 56 crew

Voyage: Oatras, Greece - Ancona, Italy.

Incident: a fire broke out on the vehicle deck and quickly spread. Most passengers were disembarked into life craft, but many remain trapped onboard. Rescue teams on water were hampered by gale force winds and passengers in life craft are now being lifted by helicopter in pairs of two. At least one passenger died escaping the fire. It is not yet clear whether the vessel will be a CTL but given the extent of the fire damage it does appear likely.

A Guide to Old / New Procedurel Legal Terms

Lawyers in general, like all professions, love to make that which is simple sound incredibly complex to the average bystander; this is one way professions can justify their charging rates and maintain an air of mystery. In recent history lawyers have been accused of using Latin to keep the public in the dark about what is happening and in the 17th Century, when many clients would have received a classical education including Latin, the lawyers used to use terms from ancient Greek for the same reason. In the lawyer's defence a latin term is sometimes just the best one for the job, and nobody would bat an eyelid at everyday latin where it is useful (i.e., e.g., et cetera.).

However, as well as Latin (and some French) there were a host of esoteric terms which were deemed in England and Wales in the late 1990s to prevent the average person being able to use and understand the court system and litigation in general. The government commissions an investigation and report by Lord Woolf (a former barrister and senior judge) which resulted in the Civil Procedure Rules of 1998. This report and these rules, amongst other things, swept away many of the old fashioned terms used by the profession and courts, in favour of everyday words readily understandable to the public.

However, it is still the case with older practitioners in England and Wales, when reading old case law, or when dealing with jurisdictions where the reforms have never taken place (Scotland, Ireland, USA India etc.), that the old terms still need to be understood. So we have prepared the following list as a guide.

Old Term - New Term

Action - Claim

Affidavit - Witness Statement

Anton Piller Order - Search Order

Calderbank Offer - Part 36 Offer

Decree Absolute - Final Order

Decree Nisi - Conditional Order

Discovery - Disclosure

Ex Parte - Without Notice

In Camera - In Private

Interlocutory - Interim

Mareva Injunction - Asset Freezing

Plaintiff - Claimant

Pleadings - Statement of Case

Subpoena - Witness Summons

Writ - Claim Form

How to Resolve a Maritime Dispute?

Maritime disputes tend to be international and commercial in their nature and often highly complex. Thankfully today court litigation is not the only method for resolving a dispute. There are essentially six modern methods of dispute resolution, as follows:

Negotiation – This is where the parties get together and try to negotiate a settlement of the issues and perhaps claims between them. It can be effective because the dispute will be elevated to a higher level within the firms in question, perhaps taking the dispute out of the hands of the individuals who are at loggerheads. Commercial considerations begin to be more at play and there can be a greater appetite to compromise. It is also the most cost effective method costing nothing, other than perhaps the cost of supporting legal advice or assistance with the negotiation process.

Mediation – Mediation essentially involves the appointment of an individual to go between the parties and see if they can find common ground or tease out settlement terms that would be acceptable to both sides.

Conciliation – Tends to be reserved for employment disputes.

Adjudication – Tends to be reserved for construction disputes. This method is very quick because often there is a strict timetable for submitting evidence and providing an Award. The adjudicator in Construction disputes in the UK must provide a decision within 28 days of the instruction. This has been intentionally designed for construction disputes where daily costs are often being incurred of hundreds of thousands and if a project were to be delayed for a series of months it would cause considerable economic impact. So the parties sacrifice the ability to present their case and analyse it in granular detail for the right to obtain a swift judgment.

Arbitration – This where the parties appoint an arbitrator or a panel of three arbitrators to listen to their case and give a judgment in much the same way that a court would, but without the strict rules of evidence, delays, formality and the need for lawyers. Also, importantly, it can be done and normally is in private. So the media and the public never become aware of the facts or judgment. The parties can go to arbitration by having a standard term in their contract agreeing to do so, or by agreeing to resolve a dispute that has otherwise arisen by arbitration. They may decide on almost every element of how the arbitration should be conducted, but tend to choose a standard form of rules such as the UNCITRAL, CIArb, CII Rules etc., which provide adaptable templates for Arbitration procedures. Arbitration is by far the most common way to resolve maritime disputes and frequently the LMAA (or London Maritime Arbitrators’ Association) Rules are used.

Litigation – If all else fails the parties always have their original recourse to a court of law.

Which Countries are Currently Under US Sanctions?

A reader wrote in to ask which countries,  other than Iran and North Korea, they should be wary of trading with because of potential US Sanctions problems; as they are just about to enter a contract with a US entity and want to ensure compliance with all US regulations. The answer is an awful lot of countries.

The USA currently sanctions involving the following countries and regions of the world:

- Balkans
- Belarus
- Burma
- Central African Republic
- Cuba
- Democratic Republic of Congo
- Ivory Coast
- Iran
- Iraq
- Lebanon
- Moldova (Magnitsky sanctions)
- North Korea
- Russia
- Somalia
- Sudan
- South Sudan
- Syria
- Ukraine
- Yemen
- Zimbabwe

The content of these sanctions differs from country to country and some are extra-geographic (not country specific), such as the diamond trade sanctions and restrictions on criminal organisations, however, it is important to ensure compliance in the above regions, particularly when trading in US Dollars.

The Risks of Trading in the Ukraine

Many shipowners are asking at present - what are the risks of trading in the Ukraine in the current circumstances?

Well apart from the dangerous security situation in the eastern and southern provinces, the principal risk is that of breaching the US and western sanctions. The full sanctions of the US are available here but in short, in response to events in the region in 2014 there were three rounds of international sanctions, both from the US and the EU and other western nations (Australia, Switzerland, Japan etc.). Most of these actions were restrictions on Russian individuals, companies and banks from trading, travelling etc. but some of the sanctions are so far reaching that, in order to ensure no breaches occur, a party trading with or in Ukraine must essentially choose to either trade with Crimea (now under Russian control) or with the remainder of Ukraine (Odessa or Kiev for instance).

If you move between a contested region and government controlled Ukraine, especially if you transport cargo between the two, you will be at risk of sanctions related penalties, vessel seizures and potentially confiscations. The risk is especially strong trading from Crimea to Odessa and there are reports of an increase in vessel arrests in the region generally. Shipowners beware.

The Maritime Labour Convention 2006: A basic guide to liabilities

The Maritime Labour Convention 2006 (MLC) is a new Convention which aims to bring together and update existing conventions regarding the employment of seafarers onboard commercial ships worldwide. Although there is much discussion about the Convention, and the document itself runs to over 100 pages, the principal new obligations regarding minimum standards in respect of liability can be simply summarised as follows:

1. NOTICE PERIODS
- Minimum of 7 days.

2. SICK WAGES
- Minimum of 16 weeks (4 months).

3. REPATRIATION
- You must repatriate seafarers in the event of:
a) termination or expiry of their employment,
b) ship's loss or foundering,
c) illness or injury or otherwise being unable to continue in their role,
d) ship's entry to a war zone and seafarer exercises option to leave,
e) in the event of the shipowner being unable to fulfil their obligations as employer.

3. FINANCIAL SECURITY
- You must have financial security' in place, to meet your liability to repatriate crewmembers and pay them any compensation due in the event of your inability to do so (for instance, even payable when you are insolvent).
- This is not a 'compulsory insurance' like CLC or Bunker Convention, but if you cannot prove (by lodging a bond to cover these costs or by showing ringfenced funds in some other way) that these costs would be met, then you will need to buy insurance to respond in these situations. If you have an International Group Mutual P&I Certificate that will do, otherwise you may need to buy an 'MLC top-up' insurance to add onto your commercial P&I Certificate.

4. SEAFARER EMPLOYMENT AGREEMENTS (SEAs)
- You must put certain basic things in the seafarer's employment contracts.
- You can use a pro-forma MLC-compliant contract called a Seafarer Employment Agreement or you can use your own contract so long as it contains all the minimum information required.

2014 EASING OF IRAN SANCTIONS

For years ship owners worldwide have had one principal country they are sure they need to avoid dealings with to remain on the right side of the law and their insurers, Iran. This country also happens to have a wealth of potential imports / exports and a huge oil industry, so there was always plenty of work available for ships in the region, had they only been able to take it up. The time has now come for the demand tap to be gradually turned back on.

The US,  five other major powers (UK, France, Germany, Russian and China) and the EU have now announced (20 January 2014) that they will begin easing sanctions against Iran and even providing relief to the country. This is in response to actions by Iran to wind down its ability to enrich uranium (and potentially develop nuclear weapons - the source of the sanctions to begin with).

Some sanctions are being suspended for 6 months, with the promise of them and others being lifted permanently if a final agreement can be reached between Iran and the countries on its cessation of uranium enrichment.

The sanctions which are now suspended are significant and include temporary lifting of financial sanctions, and restrictions on the buying and selling and associated services related to Iran's 'petrochemical products' (products derived from petroleum or oil, i.e. processed products). However, it must be noted that some of the highest-level sanctions remain in place in the meantime as normal, such as the block on buying Iranian crude oil and the freezing of the bank accounts of companies associated with the Iranian oil industry.

The full detail and guidance documents on the latest agreement is available here.