no .1 | 2021
TRANSCRIPT
Crane collapse:Damage, disruption and dealingwith the consequences
Ten years in Norway and counting - new energy ahead
New cyber security regulations
No.1 | 2021
The Swedish Club Triton is published three times a year and distributed free of charge. The Swedish Club Triton is an editoriallyindependent newsletter and opinions expressed by external contributors are not necessarily those of The Swedish Club. Articlesherein are not intended to provide legal advice and the Club does not accept responsibility for errors or omissions or theirconsequences. For further information regarding any issue raised herein, please contact our head office in Gothenburg.
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© 2021 The Swedish Club Articles or extracts may be quoted provided thatThe Swedish Club is credited as the source.
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ContentsLeaderTaking the long term view ......................................................................................................3
Loss PreventionPilot forgot about moved buoy ..............................................................................................4Webinars direct to you from Studio Mutual, Gothenburg ....................................................6The Swedish Club Casebook ................................................................................................8New loss prevention training – online and with you at all times ........................................9Crane collapse: Damage, disruption and dealing with the consequences ......................10New TELP Bunker Alerts ......................................................................................................12
LegalThe importance of Eternal Bliss ..........................................................................................13Oil and water don’t mix ........................................................................................................16
FeaturesCyber security: Recognising and tackling the multiple risks ............................................20Ten years in Norway and counting - new energy ahead ....................................................24
P&INew insights into bills of lading ..........................................................................................28Pitfalls and uncertainties: Disease Clause for Time Charter Parties ................................33
Member InsightThe Sedov - celebrating one hundred years of history ......................................................36
ESGThe COVID-19 effect ............................................................................................................37
Club InformationNotice board..........................................................................................................................38Staff news ............................................................................................................................38Calendar/Quiz ......................................................................................................................39
The views contained within this publication are those of the respective authors and are not necessarily those of The Swedish Club.
Triton 1 2021 \ 3
The COVID-19 pandemic continues toaffect our personal lives, the businessenvironment and The Swedish Club in allrespects. At the Club, we have adapted tothe new reality in how we communicate,support our members and conductrenewals. The transition to digitalisationhas been seamless but, of course, wemiss the touch and nuance of personalmeetings. However, spirits are highamongst the staff, and we look forwardto stepping back to normality graduallyonce the vaccine maturity in societyallows.
The new way of working demanded fromthe current situation has generatedvaluable opportunities to reflect on ourhabits. A clear success has been theoutreach we have experienced in relationto our loss prevention webinars. Manymore members and business partnershave shown an interest in the Club’slatest insights into casualties than we
thought possible. The aim of the seminarseries has been quality before quantity interms of lessons learnt. Digitaldistribution this way is here to stay.
The Club produced an operating surplusof USD 3 million in 2020 supported bystrong investment returns. Volatility wasexperienced in both underwriting and onthe investment front. Closing the year, thereturn on assets offset the deficit on theunderwriting side. P&I, particularly, faceda challenging year with claims in theInternational Group’s pool systemperhaps at the highest level on record.Underwriting should deliver sustainableresults over time as the market adapts tothe shift in exposure trends.
The Swedish Club has had a goodunderwriting record over the last tenyears – a testament to both the quality ofthe membership and stable pricing of riskover time.
Last year we were able to celebrate the40th anniversary of our Greek office inPiraeus. An anniversary supplement inTriton marked the event, with testimoniesfrom high-level members and brokers. In2021 we herald a full ten years of localpresence in Norway. Building sustainablerelationships is a long-term project. Wehave the time and patience to do that.
Many interesting topics and articles arefeatured in this edition of the Triton.There are never two Tritons alike. I hopeyou enjoy reading this issue.
Taking the long term view
Lars RhodinManaging Director
LEADER
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CASE STUDY
It was evening and the vessel hadcompleted loading and was ready fordeparture. All pre-departure checklistshad been completed. The Second Officerhad checked the tide in the harbour anddeparture was scheduled for just afterlow tide. The tide was running between1.5 – 2.5 knots with a height of 0.4metres. The maximum draft for vesselsentering the port was 9 metres. Afterloading the maximum draft was 8.2metres, which was aft.
Two pilots boarded the vessel and metthe Chief Officer on the bridge, whopresented the departure calculationsand gave them the pilot card. TheMaster, who had visited the portnumerous times before, arrived on thebridge just before departure. He hadbeen delayed because he had tocomplete the final paperwork with theagent. No pilot briefing was held as theMaster wanted to leave port as soon as
possible. A helmsman was also presenton the bridge.
The vessel departed, the pilot was giventhe conn and the Master stoodalongside monitoring. The pilot startedto swing the vessel with the bowtowards the quay. One tug assisted thevessel and was positioned pushing onthe port quarter.
The Second Officer, who was on thestern, reported that the vessel wasswinging 80 metres clear of the buoythat marked the channel. The ThirdOfficer was on the bow and reportedthat the bow was about 100 metresclear of the wharf. The vessel had aspeed of little more than 1 knot astern.
The channel was about 250 metreswide, about 1.5 times the vessel’slength. The Chief Officer was in thecockpit and monitoring the radar andelectronic chart. At that point theelectronic chart indicated that the vesselwas inside the 6 metre contour. The
Chief Officer did not inform the Masteror pilot about this discrepancy.
The pilot ordered dead slow ahead.Suddenly a loud noise was heard fromthe stern and the Master realised thatthe vessel had grounded, and heinformed the pilot. The pilot did notrespond. The vessel was now swingingquickly to port and the pilot tried to stopthe swing by using both the rudder andbow thruster, but the vessel continued toturn and once again touched the bottom.The Master again informed the pilot thatthe vessel had touched the bottom. Thepilot did not acknowledge this and was
Each month the Club’s Loss prevention team issues a new safetyscenario to assist members in their efforts to comply with internationalsafety regulations and to follow best practice. visit Swedish ClubonLine (SCoL) for more examples.
By Joakim Enström, Loss Prevention Officer
The buoy had beenmoved further out from itsoriginal position becausethe channel was beingdredged.
pilot forgot aboutmoved buoy
Safety scenario
LoSS pREvEnTion
Triton 1 2021 \ 5
clearly shocked. The vessel continued toswing to port.
The pilot struggled to stop the swingand tried to straighten up the vessel inthe river but did not manage to do this.The bow hit the bottom for the thirdtime, but this time on the port side, andthe vessel heeled 2 degrees tostarboard, finally coming to rest. The tug
managed to push the vessel free whilethe vessel also used its bow and sternthrusters and the engine forward andastern.
Following refloating, the vesselproceeded to the pilot station with somedifficulty because the bridge team hadnot realised that the rudder was stuck atan angle of 35 degrees to port.
It was later discovered that the buoy hadbeen moved further out from its originalposition because the channel was beingdredged. The pilot had been informedabout the dredging operation by the portcaptain but did not inform the Master orthe rest of the bridge team aboutthis.
• What were the immediate causes of this accident?
• is there a risk that this kind of accident could happen onour vessel?
• How could this accident have been prevented?
• According to our procedures what should we have done?
• What are our requirements for the pilot briefing?
• What are our procedures regarding bridge roles duringarrival and departure, what information should the ooWgive the Master and pilot?
• Could training about assertiveness be improved upon?
• What sections of our SMS would have been breached ifany?
• Does our SMS address these risks?
• How could we improve our SMS to address these issues?
• What do you think was the root cause of this accident?
• is there any kind of training that we should do thataddresses these issues?
DiscussionWhen discussing this case please consider that the actions taken at the time made sense for all involved. Donot only judge but also ask why you think these actions were taken and could this happen on your vessel?
Ask yourself:
LoSS pREvEnTion
Introduced by Lorraine Hager, LossPrevention & Marketing Advisor, andpresented by Joakim Enström, LossPrevention Officer, the webinar aimed atproviding participants with an analysisof the navigational claims that havebeen handled by the Club over the lastten years and delivering practical adviceon how to avoid them. Reference wasmade to the Club’s recent NavigationalClaims publication, as well as the newLoss Prevention Training Online (formore information please see page 9). AsThe Swedish Club offers all classes ofinsurance, it has the breadth ofexperience and the depth of expertise toprovide valuable insights into all aspectsof this category of claim.
Following the webinar, Joakim Enströmthen was put to the test with a widerange of interesting and variedquestions posed by webinarparticipants. Examples included:
Q. The statistics show that tankers haveless navigational claims than bulkers.Why is this?
A. Over the years the tanker sector hasinvested a great deal in training. Thisalong with very specific requirementsfrom charterers, and guidance frompublications such as the InternationalSafety Guide for Oil Tankers and Terminals(ISGOTT) make for a very good safetyrecord, proving that training does work.
Q. Looking at the various causes behindcollisions and groundings, do you thinkthat officers are poorly trained inCOLREGS?
A. No. Every OOW will have received theproper levels of training to be certified. Itis more about how they use theinformation they have – we often seepoor communication and a lack ofsituational awareness – the so called‘human factor’.
Q. Are there statistics about specificdangerous waters where collisions andgroundings take place frequently?
A. Yes, we use our statistics to identifyaccident hotspots around the world –for example there are issues withnavigational claims for bulk carriers inIndonesia, as they carry out a lot ofloading at anchor and face strongcurrents in the area. Club members cansign up to our TELP system and receivepersonalised alerts as they headtowards these hotspots.
Q. If a pilot is on board and the Masterhas a different view on how the passageplan should be conducted who has thelast word?
A. The Master is in charge of the vesseland ultimately anything that happens onboard is his responsibility. Before youapproach the berth you need a plan thatboth Master and pilot are happy with.My experience is that it’s all aboutcommunication. Following discussionwith the pilot you might find that theyare not familiar with your vesselcharacteristics, and with goodcommunication you can gainagreement. Saying that, I have sailed onvessels where we have relieved thepilot.
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LoSS pREvEnTion
27 January 2021Navigational claims and how to avoid them
Webinars direct to you from Studio Mutual, Gothenburg:
The Swedish Club joined with industry leading cargo consultants, CWA International, to deliver a webinar introducing the Club’snew Cargo Advice series which, written in conjunction with CWA, provides expert advice and information on the carriage of awide range of cargoes that have proven to be problematic. Dr Caline Sahyoun, James Blythe and Pierre de Jager from CWASingapore and CWA International joined Joakim Enström, Loss Prevention Officer at the Club and Victor Johansson, Head ofClaims, P&I and FD&D, Team Gothenburg, to discuss common cargo claims and share expertise on how to manage them.
The new Cargo Advice series givesoperators a unique, in depth insightinto the proper handling and carriageof cargoes that are frequently subjectto claims, with detailed advice on thebasic characteristics of each cargotype and the measures to be takenduring each stage of carriage. Theseries highlights the preventativeactions which must be taken tominimise the risks associated withcarriage, both in terms of safety andensuring delivery of the cargo inproper condition.
Lars Malm, Director StrategicBusiness Development & ClientRelations at The Swedish Club seesmany benefits in the collaborationwith CWA. Forewarned is forearmed,he says. “We see the same problems
with the same cargoes in the samelocations time and time again – andthis new initiative gives every one ofour members access to detailed lossprevention advice from industryleading consultants.”
The Cargo Advice series includesadvice on the carriage of refrigeratedcargoes in reefer containers, baggedrice, soybeans, hazardous chemicals,vegetable oils, petroleum, coal, andsteel. In addition, reflecting thepressures faced by operators forrapid turnaround at port, the seriesalso features advice on properprocedures for cargo hold cleaning.
Members can download thefactsheets directly from The SwedishClub’s SCOL platform.
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LoSS pREvEnTion
24 February 2021Transporting cargo: Managing the risks
Introducing the Club’s new Cargo Advice series
The Club has long earned a reputationfor the quality of its cases. Publishedonline, included in loss preventionpublications and widely reproduced inthe maritime press, feedback from Clubmembers has always been positive.
A great deal of work does in fact, go intothese deceptively simple one or twopages of copy. As Joakim Enström, LossPrevention Officer explains: “The Club’sloss prevention team sifts throughhundreds of surveyors’ reports, oftenthemselves hundreds of pages long, toidentify those incidents which are thebest examples of some of the morecommon situations faced on board. Weare looking for those which will providecrews with the most opportunity forreflection and learning.”
Once identified, they are then summarisedand rewritten in language which is easilyaccessible to all nationalities and in aformat which can be used in monthlysafety training meetings. “It is important
that the incidents we choose areseen as directly to relevant to anindividual’s own experiences,” saysEnström. “This way, when the casestudies are used in training, theseafarer can identify with theproblems faced, and some of thedifficult decisions that those onboard have had to make. Whendebating the case study with theircrew colleagues, the reality of thesituations makes discussions morerelevant, and learning outcomesmore likely to applied should theythemselves face a similar situation.”
The Club has now pulled together itsmost interesting case studies, andpublished The Swedish Club Casebook, aportfolio of case studies covering someof the most common incidents seen bythe Club. These include incidentsconcerning heavy weather, fire, injury,stowaways, collision and machineryfailure.
The Swedish Club Casebook is availableonline and can be downloaded athttps://www.swedishclub.com/loss-prevention/cases/case-studies/. AddsEnström: “We will continue to addinteresting and relevant new cases asthey present themselves to us, and weare considering the option of makinghard copies available to members foruse on board ship.”
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LoSS pREvEnTion
The SwedishClub Casebook
The Swedish Club has launched a newonline training programme, aimed atdelivering proactive loss preventionservices directly to our members andtheir crews wherever they are in theworld. Loss Prevention Training – Onlinewill enable seafarers and those onshoreto benefit from the Club’s skills training,despite the restrictions of the currentpandemic, by providing trainingresources that can be delivered at themost convenient and efficient time forcourse facilitators and participants.
The programme features five modules,each centred around an animated videobased on a typical onboard scenariorelating to the crew’s daily operationsand demonstrates how such accidentsor incidents can be prevented. Inaddition, the modules feature a fullsynopsis, and voice-over PowerPointslides which include guide questions fordiscussion and workshop participation,and lessons learnt. A facilitator guide isalso included to assist those leading thetraining.
Case studies cover a range of scenarioswhich are taken from real life examples
and feature an onboard accident duringmooring, collision in restricted visibility,container fire due to misdeclared cargo,unexpected stowaways and dealing witha piracy attack.
An exchange of ideas is invited throughgroup discussions, and a new onlinetraining platform provides easy onlineaccess to course materials, any time,anywhere.
We are currently carrying out a pilotprogramme with three members, andplan to fully roll out the programme to allmembers of The Swedish Club duringthe summer months.
Our hope is that once the online lossprevention training modules arecompleted, our members will continuetraining their seafarers and equippingthem with the key learning points fromthese cases, thereby reaching ourultimate goal of achieving greater safetylevels in their fleets. The trainingmaterials have been carefully designedto provide added value to our membersand to help them reduce their number ofclaims.
For more information on the new onlineloss prevention training initiative, and tofind out how to join the programme,please [email protected]
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LoSS pREvEnTion
New loss prevention training – online and with you at all times
The trainingmaterials havebeen carefullydesigned to provideadded value to ourmembers
Lorraine M. Hager, Loss Prevention & Marketing Advisor
It makes for compulsive viewing: whoamong us hasn’t watched, with acombination of fascination and horror,video footage of a giant quay cranecrumpling and collapsing after beingstruck by a ship coming alongside?
Such incidents are, thankfully, rare. Butwhen they do happen, the implications –both immediate and knock-on – arealarming. Waves Group, an independentconsultancy firm advising the maritime,shipping and offshore industries, hasfirst-hand experience of dealing with thefallout.
Joint webinar with The SwedishClub
Consultant maritime civil engineer RobWilliams spoke about ship-to-shore craneincidents at a recent webinar organised inpartnership with The Swedish Club,discussing the significance of cranes,how damage can happen, how it can berepaired, and the steps needed to assessthe scale of business interruption claims.
Talking to Triton, he says: “Cranes havecome a long way in recent decades. Aswe know, container vessels have grownfrom around 1,500 TEU in the 1960s tothe 20,000+ TEU ultra large vessels oftoday. The sustained growth in vesselsize has resulted in a parallel evolution ofthe size of shore-based cranes.”
A crucial link
He offers two standout facts: first, thecrane is a crucial link in the fast-moving,critically timed operational chain of aport, with crane downtime inevitablyresulting in disruption, sometimesextreme. Second, thanks to evolvingcrane design, manufacturer capabilitiesand materials, today’s larger cranes arefabricated with comparatively thinner,more slender steel sections. That makeslarger cranes vulnerable to deformationand buckling if they come into contactwith a vessel during berthing orunberthing.
“This can consequently lead to disruptiveand expensive repairs, significantcomponent replacement or, at worst, thecatastrophic collapse of the crane," saysWilliams. "Also, bear in mind that the sizeof these cranes comes at a cost - theirsignificant weight requires a moresubstantial supporting structure."
Avoiding incidents
The bow flare of a large vessel cansignificantly overhang the wharf structurewhen approaching the berth at an angleand can therefore come into contact withthe crane legs, even though the cranes
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LoSS pREvEnTion
Crane collapse: Damage,disruption and dealing with theconsequences
A crane collapse is generally a catastrophe –and always has knock-on effects. Rob Williams,consultant maritime civil engineer at WavesGroup, talks to Triton about damage, disruptionand dealing with what comes next.
are generally set back 4-5 metres fromthe berthing line. “A parallel approach tothe berth is intended and is typicallyconsidered good operational practice toavoid a potential contact by the bow orstern of the vessel,” says Williams.
But things can go wrong. What happensnext?
Damage to cranes
The extent of damage can varyconsiderably – there could be localisedbuckling and comparatively slight damage,extensive localised damage to the cranelegs, displacement of crane bogies or asignificant derailment. Depending on theseverity of the damage, stabilisation oranchoring works can be required.
“The worst case is the total collapse of thecrane, which will likely result in the totalloss of the crane and cause damage to thewharf structure and pavement below.”
Crane repair costs alone after a collisioncan range from USD 50,000 up to morethan USD 10 million – sometimes morethan the actual cost of replacement.Sometimes the crane manufacturer wantsthe crane returned to their facility forrepairs, adding significant transport costs.There can be damage to the wharfstructure and even to the supporting piles.
Obtaining evidence
Swift and detailed investigations by anexperienced engineer are vital to assessthe actual damage, says Williams. In lightof COVID-19 travel restrictions, this hasincluded working with local surveyorsand using drone and mobile phonefootage; evidence can be digitalised andthe damage can be remotely processedand assessed, including through thecreation of a 3D model.
Such evidence is required for assessingthe scale of overall potential damages,any stabilisation measures required andoptions for repair or replacement, heexplained. Some repairs can be limitedto cutting out and replacing a section inthe frame or a leg section, or jacking acrane back on to the rails after a smallderailment.
At the other end of the scale, the entirecrane might need dismantling to installreplacement sections; a large floatingcrane might be needed to assist; theberth might be out of action for manyweeks; a barge needed to remove orrelocate the damaged crane to aseparate, remote working area; anddepending on the location chosen, thislast option might cut capacity in thestacking area or reduce efficiency inother ways.
Calculating loss
Finally, there are the business interruptioncosts, and making a fair assessment.
“If a terminal is normally operating close tooptimum efficiency, as soon as cranedamage occurs, there is disruption and areduction in throughput is likely to occur.How we go about recording this disruptionis important,” says Williams. “Revenuelosses could occur due to reduced availablequay length, fewer available cranes, reducedvessel calls, and longer vessel turnroundand waiting times. This can lead to anincreased cost of handling each container,third party costs such as demurrage,impact on market share, and so on.”
As he says, a container terminal operatingclose to full capacity is a complexinteraction of multiple operations andactivities. Hence, the most complex claimsrequire expert input.
As always, it’s about attention to detail. Forexample, AIS data can be used to assessvessel numbers before and after theincident, and berth occupancy assessmentscan be used to identify possible sparecapacity and flexibility within the terminal.
Finally, he emphasises: “Earlyengagement and good constructivedialogue is essential.”
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LoSS pREvEnTion
Repair costs after acollision can rangefrom USD 50,000 upto more than USD 10million – sometimesmore than the actualcost of replacement.
As members’ take up of TELP continuesto increase, The Swedish Club has addeda brand-new service to its TELP portfolio,Bunker Alerts. Vessels heading for portwill now receive alerts through the TELPsystem, warning of fuel quality issuesthat have been reported in the area.
The Swedish Club has partnered withindustry leaders, VPS, the largest bunkerfuel testing company for ship operatorsin the world, to provide this new service,which is free of charge to members ofThe Swedish Club.
Examples of poor fuel quality issuesinclude cat fines, chemicalcontamination (for example polymers orcorrosive chemicals), high sodium levels,water contamination and fuel that is oftoo high a density.
Advance warning
Peter Stålberg, Senior Technical Advisor,explains the benefits of the new service:“It’s really all about following bestpractice, and optimum loss prevention
processes,” he says, “A vessel heading fora port with fuel quality concerns needs tobe extra vigilant. Receiving advancewarning of potential issues with fuelquality really puts the spotlight on theimportance of good sampling routines.Doing things 'by the book’, and taking carenot to burn the new fuel until you havereceived the first test report, will ensurethat if you do experience problems withthe bunker fuel and have a case, you willhave gone through proper procedures.”
Correct sampling is extremely importantto today’s operations, he says.“Nowadays, with the new environmentalstandards for fuel, we no longer havestraight run bunkers. Today’s fuels areextremely complex and the potential forissues when blending has increased.”
An intelligent system
Offering this kind of personalised serviceis only available because of thecapabilities of the TELP system.Information comes into the Club fromVPS and is fed into TELP. The system
broadcasts for vessels heading toaffected ports, using AIS to identifythose within a few days of arrival. Thesystem continues broadcasting,supporting individual vessels enteringthe area, until the affected fuel is nolonger an issue.
Unique to members
Whilst it is possible for companies toaccess bunkering reports, only membersof The Swedish Club have access to theTELP system, with information deliveredonly when relevant and timely to thevessels current voyage pattern. PeterStålberg says: “This avoids the danger ofinformation overkill, and coupled withthe other personalised services we areable to deliver to members during avoyage – information on dangeroushotspots, correspondents updates onlocal issues, and advice on COVID-19restrictions – we are really seeing TELPcoming into its own as a major force inthe drive to improve loss prevention.
Sign up todayIf you are a Swedish Club member andwant to take advantage of the benefitsthat TELP offers please visithttps://www.swedishclub.com/loss-prevention/trade-enabling-loss-prevention-telp/ and sign up today.
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LoSS pREvEnTion
New TELP Bunker Alerts Peter Stålberg,
Senior Technical Advisor
Background facts
K Line Pte Ltd (‘Owners’) fixed theirvessel ‘Eternal Bliss’ with PrimindsShipping (HK) Co Ltd (‘Charterers’) for ashipment of soyabeans from Brazil toChina. The contract was an amendedNorgrain 1974 form, which provided interalia for a contractual discharge rate of8,000 metric tonnes per day, withdemurrage payable at an agreed rate iflaytime was exceeded.
Pursuant to Charterers’ orders, thevessel loaded about 70,000 metrictonnes of soya beans at Turabão andproceeded to Longkou to discharge.Upon arrival at Longkou, severecongestion and a lack of storagefacilities within the port meant thevessel was forced to wait for a period inexcess of one month. By the time thevessel was finally able to berth anddischarge, the cargo had sufferedsignificant physical damage. Ownersand their liability underwriters werecompelled to provide security in thesum of USD 6 million to the receivers inorder to prevent an arrest of the vessel.The cargo damage claims weresubsequently settled for USD 1.1million. Owners then commencedarbitration proceedings againstCharterers seeking compensation forthe full amount paid to cargo interests.Charterers rejected liability, arguing thatdemurrage represented Owners’ onlyremedy for the breach of contract (thatbreach being the failure to dischargethe cargo within the permitted laytimeperiod).
The parties agreed to refer the matter tothe High Court under section 45 of theArbitration Act. The case was heard byAndrew Baker J. Various facts wereassumed for the purposes of the hearing:
• The vessel was detained at thedischarge port beyond the contractuallaytime period due to port congestionand lack of storage.
• Charterers were in breach of charterfor failing to discharge the vesselwithin the allowed laytime.
• The cargo sustained damage due toits prolonged retention on board thevessel and not due to any fault on thepart of Owners.
• The cargo damage claims brought bycargo interests were reasonablysettled by Owners.
• The losses suffered by Owners wereconsequences of Charterers’ orders toload, carry and discharge the cargo.
On the basis of these assumed facts, theparties agreed that the specific questionfor determination by the court should beas follows:
Were Charterers liable tocompensate or indemnify Owners inrespect of the losses Ownersincurred in relation to the cargodamage; either by of way ofdamages for Charterers’ failure tocomplete discharge within thepermitted laytime, or an indemnity inrespect of the consequences ofcomplying with Charterers’ orders toload, carry and discharge the cargo?
Triton 1 2021 \ 13
LEGAL
The importance of Eternal BlissIn ‘The Eternal Bliss’, the English High Court decided that demurrage is not theexclusive remedy for a shipowner in circumstances where their voyage chartererexceeds the contractual laytime period.
The judgment
The first observation made by Mr JusticeBaker was that this was fundamentally amatter of contractual interpretation. Inother words, it was possible for partiesto a charterparty to contract in suchterms so that their demurrage clausewould answer the issue presently beforethe court. However, the Norgraincharterparty used in the ‘Eternal Bliss’did not contain any clarification in thisregard, merely providing that‘Demurrage… if incurred’ was to be paidat a certain rate. The judge remarkedthat this was a “familiar phenomenon” instandard voyage charter forms.
Mr Justice Baker considered the type ofloss claimed by Owners. Charterers’case was that Owners’ claim waseffectively only a claim for detention ofthe vessel, being that the cargo damageresulted from delay at Longkou. Ownersaccepted that the cargo liability was aby-product of the delay but submittedthat this did not stop the damage inquestion being a different kind of loss.The judge considered both argumentsbut ultimately preferred Owners’submission, finding that “the damage tothe cargo was quite distinct in its naturefrom, and is additional to, the detentionof the ship, as a type of loss”.
The court asked the question: ‘Whatdoes the law take to be covered by ademurrage rate? What does demurrageliquidate?’ The court decided that thedemurrage rate is intended to liquidatethe vessel owner’s loss of use of the shipto earn freight by further employment inrespect of delay to the ship after theexpiry of laytime. It is not intended to domore. It does not seek to liquidate anyclaim for different kinds of loss;whatever the basis for any such claim.Demurrage, therefore, is agreeddamages compensating the shipownersolely for the value of the ship’s losttime. It is (only) a temporal remedy.
Mr Justice Baker held that, had thematter been from free from judicialauthority, he would have considered thatOwners had the better of the argument“by a clear margin”. Nevertheless, thegoverning authorities were contradictory,and it was necessary for Mr JusticeBaker to undertake a thorough review ofthe existing legal authorities. In doing so,the judge was required to tackle anenduring debate as to whether it wasnecessary for there to be one or twobreaches of contract by the charterer inorder for a shipowner to successfullyrecover damages for a loss that isdifferent in kind to that which demurragecompensates.
The ‘two breach’ school of thought wasbased on the Court of Appeal decision inAktieselskabet Reidar v Arcos [1927].That case concerned a claim fordeadfreight which arose due to thevoyage charterers’ failure to load thevessel during the applicable laytimeperiod. All three Court of Appeal judgesin Reidar v Arcos agreed that theOwners’ claim should succeed. Whatthey disagreed upon was how manybreaches there had been. Two of thejudges considered there had been twoseparate breaches: (1) to load a fullcargo, and (2) to load within theallowable laytime. The third judge(Bankes LJ) decided that the charterershad only committed a single breach ofcontract: failing to load within theallowed time.
Mr Justice Baker concluded that Reidar vArcos was not in fact authority for theproposition that a separate breach ofcharter (i.e. in addition to a breach of thelaytime provision) was required in orderfor a shipowner to claim damages for anadditional and different head of loss. Hethen went on to consider The Bonde[1991]. In that case, the presiding judge(Potter J) had come to the conclusion(based on his reading of Reidar v Arcos)that a separate breach was necessary.Mr Justice Baker held after completing
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LEGAL
his own thorough review of theauthorities that The Bonde was wronglydecided and should not be followed. Thisleft Mr Justice Baker free to decide theissue before him, without beingconstrained in any way by judicialprecedent. He did so, ruling in favour ofOwners.
Comment
As a result of Mr Justice Baker’sdecision in the ‘Eternal Bliss’, the currentposition is that, where a charterer hasfailed to load or discharge a vesselwithin the allowable laytime period andthe shipowner suffers a different type ofloss (i.e. in addition to their loss of useof the vessel during the period it isdetained), the shipowner is not requiredto prove a separate breach of charter inorder to recover damages for that loss.
The ‘Eternal Bliss’ is a positive decisionfor the shipowning community, pavingthe way, as it does, for them to recoverdamages beyond demurrage incircumstances where laytime has beenexceeded and they suffer additionallosses as a result. We may expect tosee various different types of lossclaimed by shipowners, ranging fromdeadfreight to cargo damage to hullfouling, all said to have been incurred asa result of their charterers’ failure toload or discharge during the permittedlaytime period.
Voyage charterers, on the other hand, willbe distinctly unenthusiastic about thepotential implications of this decision, asthey now have a clear exposure to cargoliabilities if delays in cargo operations forwhich they are responsible result in anydamage to or deterioration of the cargo.
But as Mr Justice Baker observed in hisjudgment, demurrage is a contractualissue. It is perfectly possible for theparties to a voyage charterparty to clearlydefine the extent of demurrage. So, forexample, a voyage charterer may wish toconsider whether they agree terms whichexpressly provide that demurrage is theexclusive remedy for any loss due toexceeding laytime.
As Mr Justice Baker acknowledged, thisis an important decision, and one whichresolves a long-lasting debate on thisarea of law. However, the case is subjectto consideration by the Court of Appealin the autumn of 2021, and bothshipowners and charterers will bewaiting with interest for the outcome ofthe appeal.
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“From time to time, a case provides the opportunity toresolve a long-standing uncertainty on a point of law ofsignificance in a particular field of commerce. This issuch a case.” (Andrew Baker J).
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Oil and waterdon’t mixThe issue of water content in crude oil and other cargoes isnot a new one. But best practice in terms of identifying thewater, managing notification procedures, and putting in placethe necessary legal instruments is evolutionary, and aprocess that owners and cargo owners alike need to properlymanage in order to best protect their legal interests.
Peter Glover, Partner and Master Mariner at Reed Smith, Hong Kong.
Loss preventionHow does water get intocrude oil cargo tanks?
Extraction
The starting point when consideringsources and mechanisms for the ingressof water is the origin of the oil and theproduction or extraction process. Oil isproduced using different methods, withthese methods varying depending on thegeology of the region being exploited.
In broad terms, crude oil is extracted bycreating pressure gradients within thetarget reservoir which serves to propelthe liquid to the oil well. Oil recoverytakes places over two phases: primaryrecovery and secondary recovery.Primary recovery can take a number offorms, one of which is known as a ‘waterdrive,’ where the oil reservoir is fuelled bya water drive, or an aquifer, that interactswith the oil and provides the driveenergy. Another primary recoverymechanism is gravity drainage, whichrelies on density differences between oil,gas, and water. Axiomatically, theserepresent various mechanisms forintroducing water into crude oil.
Following primary recovery, many oilwells will be subject to secondaryrecovery. Secondary recovery commonlyinvolves waterflooding and gas injectionof the oil reservoir.
Stabilisation
While water can be introduced into thecrude oil column in these ways, it isnormal for crude oil to have a degree ofretention or stabilisation time in terminaltanks (shore side or FPSO) where gas isliberated and free water has time tocoalesce into droplet sizes sufficient todescend through the oil column and beremoved prior to export to a tanker. Itfollows that if the retention time isinsufficient, or the viscosity of the oil isincorrectly calculated, water may betrapped in the oil column and be loadedonto the export ship.
Human error and structuralfailure
While the oil production and stabilisationprocess is one mechanism forintroducing water into a ship’s tanks,another means is human error. Humanerror can manifest itself in a number ofways. These include:
• Terminal valve alignment error –permitting water to be drawn oreducted into a loading line.
• Terminal line contamination – where aloading line already contains waterwhich is displaced into one or moreship tanks prior to first oil beingreceived by the ship.
• Steam heating coil failure or damageand leaking – where condensed water
from a ship’s cargo heating systemdrains into a cargo tank, or steamescapes and condenses in the cargotank.
• Ballast tank or ballast line leakage.
• Crude oil washing system valveleakage or misalignment – permittingwater to enter a cargo oil tank.
• Hull failure – seawater ingress.
Detecting water in crude oil
There are a number of opportunities fora ship to detect water in oil during theloading and post loading phases.
Manifold samples
The first opportunity is the manifold.Owners should be alert to the fact thatan oil line may have been flushed withwater (salt or fresh) following loading ofthe previous export ship, and thepotential for this water to be loaded asthe first parcel in advance of thenominated grade. Means to guard thisare through first flow manifold samples,initially restricting loading to a singleship tank and taking first metre samplesof this tank.
During the loading process, time intervalsamples should be taken. These can bemanually taken if automatic in-linesampling is not arranged. If manualsamples are drawn, these should betaken under the supervision of a deckofficer, drawn directly into a clean and drysample bottle and the bottle then sealedwith a record of the time, date and placeof the sample, together with the namesof the persons involved in taking the
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sample. These details, and the sampleserial number, should be recorded in theship’s cargo operations book.
Tank sounding
The next opportunity to sample for wateris the first few metres sounding in eachtank. It is recommended that this takesplace by way of both a sounding stickwith water finding paste and use of anullage temperature interface (UTI) device.Both devices have advantages anddisadvantages. Any water reading, orsuspected water reading, should berepeated to guard against measurementerror.
At either the initial loading orintermediate stages, if free water (beingwater present that is not in suspension)is detected, or if it is suspected thatthere is free water or a detectablequantity of water in the as-loaded oilcolumn, the Master should record thisobservation in the ship’s cargooperations book, issue a letter of protest,notify the terminal, and inform hisprincipals. If a considerable volume offree water is found, consideration shouldbe given to suspending loading while thesource of the free water is identified.
The next opportunity is on completion ofloading. In addition to taking the usualmeasurements for ullage andtemperature, water finding paste shouldbe used to check for free water, and theUTI should be lowered through the oilcolumn to gauge any detectableconcentrations of water. Again, if free
water is detected, the gauging processshould be repeated to guard againstsampling error.
It is also considered good practice tocheck for free water on departure fromthe load port, and, if there are multipleload ports, between such load ports.Otherwise, a check for free water shouldbe done about three days after departurefrom the load port. Any free waterdetected, whether consistent with theload port records or not, should berecorded and the results communicatedto the ship’s owners and charterers.
Actions to be taken if free wateris detected
In all instances, the following should beconsidered if free water is detected inthe cargo tanks:
• Any gauging which detects free waterbeyond trace detection should beconfirmed with a second gauging.
• Where possible, any free waterdetected should be confirmed by bothsounding stick, water finding pasteand UTI measurement.
• The terminal representative should benotified and a record of the noticeshould be recorded in the ship’s cargooperations book. If free water isconfirmed, a letter of protest shouldbe issued by the ship to the terminal.
• The terminal representative should beinvited to participate in confirmationgauging. If the invitation is declined, ora terminal representative is notavailable, this fact should be recordedin the ship’s cargo operations book.
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Water in oil cargoes is not uncommon and may originatefrom a number of potential sources, including production,terminal operations, and the ship itself.
It should be possible to detect free water at various pointsthroughout a voyage and owners should take steps toensure that they are not exposed through a lack orabsence of appropriate testing.
It is critical that any water found be notified to the relevantparties as soon as possible, and appropriate action (suchas clausing bills of lading, correctly describing the cargo,and issuing letters of protest) should be promptly taken.
The source of water should be quickly and thoroughlyinvestigated. Gathering best, and preferably independent,evidence is critical to the prospects of successful claim ordefence management.
If the water itself contains other potentially harmful (to theenvironment, equipment, or machinery) elements such asmicrobial growth, additional steps should be taken tosegregate and correctly treat and/or dispose of the waterand contaminants.
Be wary of contractual time bars and what must bepresented within the time frame.
Conclusion
it is considered goodpractice to check forfree water ondeparture from theload port, and, ifthere are multipleload ports, betweensuch load ports.
There are a number of legal issues tobe considered in the event of free waterdetection.
If free water is suspected or detected,prompt notification of the same to theterminal, owners, and charterers mayprovide an opportunity to properlydescribe the cargo in the bill of lading.
If the bill of lading purports to excludefree water, when it is considered orknown that free water exists, theMaster (or in practice those authorisedto sign the bill of lading on their behalfand/or the supplying entity) should notsign the bill of lading until the owners’instructions have been obtained.Failure to properly describe the cargomay constitute a breach of the Hague-Visby Rules (H-V Rules) Article III rule3(c): the apparent order and conditionof the goods.
Determining the source of the freewater is critical. If the free water sourceis alleged to be the ship, owners maybe in breach of H-V Rules Article III rule1(c) in failing to exercise due diligenceto make the holds fit and safe for thecargo. In a worst-case scenario, theship may be found to be unseaworthy.Further, or alternatively, the ship may beexposed to a claim that it did notproperly and carefully load, handle,stow, carry, keep, care for, anddischarge the cargo as required underH-V Rules Article III rule 2. At thedischarge port, free water present inthe cargo but not detected at the loadport may give rise to quality and/or
quantity claims against the ship by thereceivers and/or the charterers.
The underlying sales contract for thecrude oil may state that the quality ofthe oil supplied thereunder shall be theproduction quality of the oil beingsupplied at the time and place ofloading. More usually, however, thesales contract will state that the qualityof the oil delivered shall be the qualityof the oil as usually made available atthe time and delivery point as specifiedin the contract. This is commonlyevidenced by the terminal presentingsample evidence drawn from theterminal tanks, and not from manifoldsamples or the ship’s tanks. It istherefore crucial that free water isdetected and proper sampling of the oilreceived is performed.
Further, any complaint of variation ofquality shall commonly be admissibleonly if made within a defined number ofdays, common limits being 30, 45 and60 days after discharge. It is notuncommon for sales contracts tocontain a requirement that independentsurvey or expert evidence be producedwithin such a time frame in support ofthe claim, which is commonly a difficulthurdle to overcome unless the affectedparties act quickly and decisively. Itfollows that the evidence that theaffected parties are able to obtain (andthe evidence trail) and the speed atwhich it may be obtained may be crucialin determining any quantity and/orquality claim made under the underlyingsales contract, or potentially claimsunder the relevant bills of lading.
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• Samples of the free water should beobtained. The samples should betaken into a clean and dry receptacle.Sampling should be performed undersupervision of a deck officer,witnessed, and sealed on taking thesample.
• In addition to samples of the freewater, samples of the oil column ineach tank should be taken, includingtop, middle, and bottom samples (tocapture evidence of emulsion orotherwise water in suspension).
• Sample seal numbers should berecorded in the cargo operations bookand in a seal record, which forms partof the load port documentationbundle.
• Samples should be securely storedon board the ship in a cool, dry placewhich is away from direct sunlight.
• Samples should always be stored inaccordance with the ship’s safetymanagement system (SMS)procedures to guard against anyinadvertent disposal of samples.
• If ballast operations are in progress,samples of the ballast water shouldbe taken. If ballast was loaded indifferent regions, representativesamples of each ballast water regionshould be taken. If materiallysignificant volumes of free water aredetected, the Master should considersuspending ballast operations.
• A sample of the load port watershould be taken. This sample shouldbe taken remote from the ballastdischarge (and preferably whenballast is not being discharged) andany engine room heat exchangepoints. A sample should also betaken from both sides of the ship.
• All sampling should be witnessedand a contemporaneous note madeof the sampling performed, includingrecording the date and time ofsampling, where the sample wastaken, and who took the sample.
• Samples should be taken in duplicatewherever possible.
Detecting free water - legal considerations
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Recognisingand tackling the multiple risks
The iMo’s new cyber securityregulations entered into force on 1January 2021. peter Sponer, Lloyd’sRegister marine and offshore cybersecurity expert, tells Triton why theyare so important for the industry.Imagine you are buying a new car. It needs to befunctional – of course it does. But it also has to be safeto drive. “You always think of safety when you look at acar,” says Peter Sponer. “We believe we do the samewhen we consider the running of a ship – but we mustalso really start considering cyber security as part of thatsafety package. It needs to be at the heart of everythingwe do because cyber threats are a very serious challengeto the industry.
“Owners and operators really need to think of cybersecurity as part of every activity they carry out, whetherbuilding a new vessel, implementing a new system onboard, working with suppliers and third parties, orconsidering the potential actions of their crew,” he says.
Peter Sponer,, Lloyd’s Register marine and offshorecyber security expert
IMO regulations
Sponer welcomes the implementation ofthe IMO’s new cyber security regulations,introduced through ResolutionMSC.428(98) on Maritime Cyber RiskManagement in Safety ManagementSystems. The resolution encouragesadministrations to ensure that cyberrisks are appropriately addressed inexisting safety management systems, asdefined in the International SafetyManagement (ISM) Code.
“For shipowners and operators, thedeadline is to get this done in time forthe first annual DoC (Document ofCompliance) audit on or after 1 January.So the deadline will be different for eachcompany,” he says. “From theconversations we have been having withcompanies, most of them have beenaware of the deadline. They have eitherstarted working towards fulfilling therequirements themselves, if they haveinternal resources, or have hired in anexternal party to help them either tovalidate the approach they have taken, orto perform some of those activities ontheir behalf.
“Only a very few companies, from myexperience, have either done nothing orhave not given those requirements anypriority – that would probably resulteventually in them encountering a majornon-conformity at audit.”
A willingness to learn
Sponer says plenty of companies are‘not very mature’ when it comes to cyberrisk management and understanding.“This is quite common with shippingcompanies. But they do confirm to usthat it has been a really good learningexperience for them to go through theIMO 2021 requirements.
“They have not only understood theimpact that a cyber breach could
potentially have on their operations but,more importantly, understood what itcould actually cost them in terms ofdisruptions per day if they were unable tooperate. It has helped them tounderstand the importance of definingwhat their critical assets are and how toprotect them; to better define cybersecurity responsibilities within theirorganisation, something that was veryoften missing; and to understand whatrisks third parties could pose for them. Inthe end, they have been able to create arisk management framework that is notonly compliant with IMO 2021 but alsomakes them better prepared shouldthere be any cyber security issue.”
Danger of confusion
Interestingly, he says the biggestchallenge for ship owners and operatorsis that the IMO resolution is actuallyquite generic. “It doesn’t really statespecifically what you have to do or definethe actions you have to take, so it mighthave created a bit of confusion for shipoperators. However, there are severalways to address those requirements,
including the guidelines on maritimecyber risk which were released in parallelby the IMO and feature a set of bestpractices on how to tackle compliance.”
Other industry guidelines will also help,he says, including those from BIMCO.“These are very good because they arebased on the industry standard and thefive-point framework – identify, protect,detect, respond and recover.”
The human factor
Many companies tend to focus onaddressing only the technical controls ofsecurity – for example, making sure thatfirewalls have been deployed on board orsecurity configurations properlyimplemented. “However, the biggest riskfactor when it comes to breaches is notthe technology – it is actually the peoplethat operate it,” says Sponer. “When welook at good cyber risk management, weshould always focus on the big picture –not only looking at the tech but also thepeople and processes.”
There should always be regular cybersecurity awareness training, not only ofoffice staff but also of crew members,he said. Policies and procedures mustbe in place setting out how crewmembers are able to use their owndevices on board, for example, as wellas procedures to follow should there bea cyber breach.
Increasing sophistication
High-profile hacks such as those thataffected Maersk Line, crippled by aPetya cyberattack in 2017, CMA CGM,hit by a ransomware cyber attack in2020, and the IMO, which was forced toshut down key systems due to a cyberattack a few days later, are well knownin the industry.
However, the nature and intent of targetsevolves, and the sophistication of the
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‘The biggest risk factor when it comes tobreaches is not the technology – it isactually the people that operate it”
“We have seenincidents wherethere has beenmanipulation ofGpS signals – forexample, todeliberately divert atanker in the Straitof Hormuz offcourse towardshijackers”
hackers continues to increase. Therehave been some disturbing targetedattacks towards the industry, such asmalware that targets ECDIS. “We haveseen incidents where there has beenmanipulation of GPS signals – forexample, to deliberately divert a tanker inthe Strait of Hormuz off course towardshijackers. So the threat landscape hasreally changed.”
Penetration testing
An important part of any cyber riskmanagement framework is regularlyconducting penetration tests, not only inthe office but also on board. This givesoperators a much better visibility into thecyber risk, says Sponer. “The testers willidentify risks and also actively try toexploit the vulnerabilities that exist in theinfrastructure.
“By doing a penetration test, you want toensure that the critical systems areisolated from the rest and that even ifthere is an incident on board, thesesystems cannot be compromised.”
The tests should be carried out byoutside experts, he adds: “Even thoughsome companies have expertise in-house, it is really important to have anindependent expert look at their cybersecurity posture.”
Lack of control
Some owners and operators haveadmitted privately to their systems beingbreached repeatedly; one relatively smalloperator was hit by the CryptoLockerransomware. “It happened to them twiceand as a result all their navigationsystems were encrypted; not a problem interms of having control over the vesselbut if you are at sea and relying ontechnology you cannot use, that is a bigproblem.”
Some shipping companies haveadmitted to Lloyds Register that whilethe cyber threat is one of the top five
risks they face, it is one they feel theydon’t have a lot of control over, saysSponer.
“In terms of the IMO resolution, it isdefinitely a good first step to ensure thatthere are some basic cyber securitycontrols in the industry – but there is stilldefinitely a long way for companies to go.
Regulation
“It is important to mention that the IMOis not the only stakeholder that is doingsomething about cyber security in theindustry. For example, the EuropeanUnion implemented the GDPR (GeneralData Protection Regulation) in 2018, andthere is also the EU’s less well-known
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“There is stilldefinitely a long wayfor companies to go”
You must constantlymonitor whetheryour strategy stillworks and if it needsupdating.”
NIS (Security of Network and InformationSystems) Directive which came into forcein 2016.
“In addition, the International Association ofClassification Societies (IACS) published aset of 12 cyber recommendations whichhave since been consolidated into onedocument.”
Getting through the DoC audit is not whereit ends, of course. “Cyber security is anongoing process and never stops. Youmust constantly monitor whether yourstrategy still works and if it needsupdating.”
Multiple consequences
In conclusion, ship owners and operators needalways to look at the big picture and considerthat there are multiple fronts to be protectedand multiple possibilities where a breach couldhappen. “The IMO is looking at cyber securitymostly from the point of view of safety ofnavigation at sea. But you only need to go alittle bit beyond that to understand that thereare other consequences to consider in abreach, including loss of data, disruption, costsand damage to reputation. That tends to putthings in context.”
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The increased connectivity of ships has,of course, made the industry morevulnerable. Not only is there increasedactivity on the part of attackers but alsothe ‘attack surface’ itself has increased.
Connectivity
Most vessels are now connected by VSATor 4G. Components on board such as thepropulsion system often have a remotetechnical capability so the manufacturercan perform remote maintenance.Companies are deploying IoT (Internet ofThings) devices on board to collect datafor performance optimisation or to reducetheir CO2 footprint and all these createadditional cyber risk.
Third parties
Operators need to consider thirdparties, including any kind of contractorcoming on board to inspect systems. It
is important that the company has aclear policy on contractors and that thepolicy clearly defines the level of useraccess – e.g. a contractor can onlyaccess the specific system that theycame on board to inspect.
Employees
Many believe that there is a far higherrisk of systems being compromisedfrom the ‘inside’ than through a targetedattack from outside. The crew memberconnecting their tablet or mobile phoneto the ship’s network can put the vesselat risk by unknowingly downloadingmalware. There needs to be a propersegregation of the network, with thecrew network properly divided from thebusiness and operational network, toavoid the risk that this malware couldspread from one network to anotherand potentially compromise any of thecritical systems on board.
The ‘attack surface’
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Ten years inNorway andcounting -new energyaheadinterview with Tore Forsmo, Area Manager for Team norway
Uncertainty is said to be the only certaintyin life – and the development of TheSwedish Club’s Norway office seems aperfect reflection of that.
When the Club’s Board met in Dubai in2010 and unanimously backed a plan toenter the global property and loss of hireinsurance market for drilling rigs,accommodation rigs, service rigs andfloating production/storage units, couldanyone have foreseen the rollercoasterjourney ahead?
During the decade since Team Norwayopened for business, oil prices have swungfrom peaks of USD 120 per barrel to lowsof around USD 20. In its early days, TeamNorway’s business was 100% focused onthe energy (oil & gas) segment; today, theenergy portion makes up 20% of theportfolio.
Taking a gamble
Area Manager for Team Norway is ToreForsmo, who joined the Club in 2012: “I haveworked in the maritime industry for my wholecareer. For ten years I was CEO of a tradeassociation for Nordic marine insurance, and Ihad a lot of contact with The Swedish Club’smanagement team,” he says. “The SwedishClub has always had a high standing in mybook, for what it does and how it operates –including, for example, the fact that lossprevention is a part of its DNA. That is why Iwas attracted to the Club.”
When he was approached by Lars Rhodin tosee if he was interested in leading Team Oslo,he accepted. “The Club had a good reputationand many exciting things were going on. It wasa bit of a gamble – you can’t build somethingcompletely new in a day – but it’s a decisionI’ve never regretted.”
Major upheavals
And then came the upheavals in the oil & gasmarket. “If you look on the premiums side, westarted with energy and it was 100% of ourbusiness. Our overall volumes have obviouslyincreased since then, but nevertheless theenergy portion now stands at around 20%.”
According to the Norwegian Shipowners’Association’s Outlook Report for 2021,Norwegian shipowners had more than 200vessels in layup at the turn of the year –exceeding the highest layup figures during theoffshore crisis in 2016-2017. Hardest hit arethe offshore service and rig segments, alongwith passenger ferries, due to the COVID-19crisis.
A new approach
Uncertainty is freedom, says Forsmo. “Many ofour members are already looking at renewablesas an alternative option to the oil & gasindustry. Those servicing oil & gas can alsoservice the renewables sector, which needsaccommodation and service vessels, crewvessels and installation vessels for windturbines. Many are able to use the competenceand skills they have acquired in the oil & gasindustry in this way.”
In terms of operational vessels, Team Norwayis looking at floating (moored) wind turbinesrather than those fixed on the seabed. “Floatingturbines are more comparable to what we arealready doing in the energy side, i.e. likeFPSOs,” says Tore.
“We can insure FPSOs without having to takeon the downstream infrastructure such aspipelines, refinery, etc. Right now, therenewables sector tends to be more of apackage deal where you have to take yourshare in both upstream and downstream. Weare not looking to insure pipelines andrefineries on the energy side and similarly notlooking to insure renewables, such as electricalcables to shore. Floating turbines are where wewould set the boundaries, but also where I thinkthe growth will be, because of the flexibility andeconomies of scale.”
Looking seawards
Team Norway has also been looking at thepotential in the aquaculture sector, althoughthese are early days. “The aquaculture sectorwill be going further and further offshore withtheir constructions looking more and more likeships,” he says. “The volume is low at presentbut the sea is increasingly going to be a majorsupplier of foodstuffs for the world, and it issomething we have in mind.”
Core business
In addition to the energy business, TeamNorway has a strong focus on the developmentof P&I and Marine lines in Norway. “BecauseOslo is such a small office, we are able to get toknow our customers well,” Tore explains. “Mycolleagues and I are used to travelling andmeeting customers face-to-face, though thishas been limited during the COVID-19
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“Those servicing oil &gas can also servicethe renewablessector, which needsaccommodation andservice vessels, crewvessels andinstallation vesselsfor wind turbines.”
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pandemic. Relationship building hascontinued via Skype and Teams, but weare looking forward to the day when wecan meet again face to face.”
Staying close
The past year has, of course, been verydifferent in terms of how The SwedishClub has been able to support itsmembers. “We have been trying tocompensate for not being able to travelby actively promoting our loss preventionproducts and services – for example, with
Gothenburg –– Piraeus –– Hong Kong –– Tokyo –– Oslo –– London
www.swedishclub.com
The Swedish Club • 10 Years in Norway
“Diversity makes aculture the best itcan be. The broaderthe perspective, thebetter the decisionsand the workenvironment.”
TELP, working to establish our presencewithin our member community on thoseparticular topics. As for support ingeneral – yes, that is what we do. We area service provider and we support ourmembers, especially in difficult times.”
Teamwork
Offering a full-service business, there is astrong focus on teamwork in TeamNorway. Tore says: “There are six of usemployed in the Oslo office at present.We’re in an open-plan office and we worktogether closely. Decision paths are shortand there’s a great deal going on.
“Besides our relationships withcustomers, relationships betweenemployees are extremely valuable. It’simportant to have respect for one anotherand for our differences. Within the teamwe have an age range between 30 and 60,and people come from different
professional backgrounds. Diversitymakes a culture the best it can be. Thebroader the perspective, the better thedecisions and the work environment.”
Of course, Team Norway does not existalone, and when circumstances demand,is closely supported by the expertiseavailable across the Club. “The best thingabout working at The Swedish Club is thepeople at the company. There’s achemistry between the offices andthough we’re scattered all over the world,everyone basically knows everyone else,”says Tore. “We are a relatively smallcompany. The Club feels like a family.”
Building relationships
As well as covering the worldwide energymarket, Team Norway also coversEastern Europe and Cyprus and is theonly office to cover construction vesselsfor The Swedish Club.
The Norwegian market itself can bedifficult to penetrate because of a cultureof longstanding relationships, but Tore isa firm believer in taking the long-termview. “It has been a challenging ten yearsbut we have firmly established ourpresence in the Norwegian market.Attracting new members is often theresult of several years of work, meetingpeople and building relationships. That initself is very fulfilling. And we keep trying!
The future
Shipping itself is currently facing a greentransition and Tore believes that being atthe leading edge and changing along withthe world is at the core of The SwedishClub’s identity. “Questions will arise infuture about how we as a company willposition ourselves when the worldswitches to more environmentally friendlyalternatives,” he says. “We’re alreadyseeing oil & gas being phased out infavour of wind power. The Club iscommitted to key UN environmentalgoals. We have a long history ofsafeguarding health, life and theenvironment at sea.”
He concludes: “If the past ten years inNorway has taught us anything, it is thatthe future is uncertain. If I were to makeone prediction, it would be that we willstill be here and we will still be offeringour members the highest possible levelsof service, but the environment in whichwe will be doing that will be very differentindeed.”
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Team Norway has traditionally held abreakfast seminar every March in Oslo. Thisyear it was replaced by a webinar attractinga somewhat wider audience than usual. Atotal of 55 participants representingshipowners, brokers, maritime lawyers andthe wider Norwegian shipping communityspent an hour together with Team Norwayon the morning of 8 April.
Managing Director Lars Rhodin shared hiscustomary State of Affairs review, and thiswas followed by an online lecture by award-winning Norwegian speaker Per HenrikStenstrøm on how to develop and maintainworking relationships. He also provided tipson how to deal with annoying colleagueswhen working from home, which provokedsmiles all round from the audience.
A change from breakfast for Oslo
“The best thingabout working atThe Swedish Clubis the people at thecompany.”
“It has been achallenging tenyears but we havefirmly establishedour presence in theNorwegian market.”
Tokyo –– ––
Over the last year, The Swedish Club hasbeen working on a new set ofpublications aimed at providing membersand brokers with a guide to the mostcommonly encountered situationsrelating to bills of lading.
The aim is to give members and brokerson the one hand – and The Swedish Clubon the other – a common platform todiscuss these topics and to find hands-onsolutions should a situation involving bills
of lading arise. This new advice seriesprovides yet another addition to thetoolbox of P&I solutions provided by TheSwedish Club.
The Club will present the advice in twodifferent formats:
Practical Guide
These are aimed at providing a morepractical take on how to deal with thetopic, with the aim of assisting the crew,as well as those dealing hands on withthe day to day issues ashore.
In Focus
These articles provide greater depth onthe particular topic – often touchingupon the legal framework that surroundsthe issue. In Focus articles have beenwritten with claims staff at members andbrokers, as well as in-house legal counselin mind.
The Club has identified a number oftopics which our members haveencountered. These include:
• Switch bills of lading • Ad valorem bills of lading• Freight prepaid bills of lading
Our partners
The articles have been written by TheSwedish Club in conjunction with anumber of shipping law firms. They havebeen written with English law in mind,since English law is still the predominantlaw in the context of charterparties – aswell as many bills of lading.
We appreciate, of course, that the laws ofother countries may also apply to bills oflading but, at least, the articles in thecases selected can be used as a startingpoint for further discussion.
We invite you to read the first article inthis issue of Triton. It covers the topic ofthe incorporation of charterparty termsinto bills of lading, and has been written inconjunction with Hill Dickinson (withspecial thanks to Siiri Duddington, Partnerand Rachel Hoyland, Senior Associate).
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New insights into bills of ladingIntroduction
Torbjörn Claesson, Senior Claims Executive, P&I and FD&D
Why is it important to identifywhich charterparty has beenincorporated into the bill of lading?
Where a bill of lading provides for theincorporation of a charterparty, such aprovision can have the effect of making thecharterparty terms part of the bill of ladingso that they govern the legal relationship ofthe parties to the bill of lading.
The terms of the charterparty that the billof lading seeks to incorporate maystipulate, for example, the freight payable,the payment terms, as well as which lawgoverns the bill, and which jurisdictionand modes of dispute resolution disputesare to be referred to. The wording the billof lading uses to incorporate thecharterparty will determine which of thecharterparty terms are incorporated -explained in more detail below.
Accordingly, in order for the parties to abill of lading to understand what termsgovern it, it is important to be able toidentify exactly which charterparty the billof lading has incorporated.
How is a charterpartyincorporated into a bill of lading?
Not all bills of lading seek to incorporate acharterparty.
Where a bill of lading seeks to incorporatea charterparty, it will usually contain asection on the front page where details ofthe charterparty, normally the date of thecharterparty, should be set out. A clauseon the reverse or face of the bill of ladingmay also operate to incorporate acharterparty.
Which charterparty has beenincorporated into the bill oflading?
As set out above, it is important to be ableto identify exactly which charterparty abill of lading seeks to incorporate. Thiswill not always be straightforward andvarious sets of circumstances may arise:
(i) The parties have insertedcharterparty details in the bill oflading
Where there is reference in a bill of ladingto a particular charterparty, the bill oflading will incorporate that charterparty. Ifthe charterparty is specified by date only -and there is more than one charterpartywith the same date - the general ruleunder English law is that the bill of ladingincorporates the head charterparty in thechain, to which the ship-owner is a party.This is on the basis that the lawpresumes the party issuing the bill oflading (the ship owner), mustcontemplate incorporating a charterpartyto which it is party, rather than any other.
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Which charterpartyis being incorporated into a bill of lading
Summary• It is important to identify exactly which charterparty the bill of lading has
incorporated, as some of the terms of the charterparty will apply to the bill oflading.
• A charterparty is incorporated into a bill of lading by way of reference in the billof lading to the charterparty.
• There are rules for identifying which charterparty has been incorporated wherea charterparty has been described in the bill of lading but more than onecharterparty fits that description.
• There are rules for determining which charterparty has been incorporatedwhere no charterparty has been described in the bill of lading.
• Not all the terms of the incorporated charterparty will apply to the bill of lading.
• To incorporate law and jurisdiction and/or dispute resolution clauses, the bill oflading must contain wording which specifically refers to those clauses.
A charterparty isincorporated into abill of lading by wayof reference in thebill of lading to thecharterparty.
Rachel Hoyland,Senior Associate
Siiri Duddington, Partner
Written by Hill Dickinson LLP– with special thanks to
However, the general rule in favour ofincorporation of the head charterpartydoes not apply if there is both a timecharterparty and a voyage charterparty inthe chain and both charterparties fit thedescription in the bill of lading. In thesecircumstances, under English law, the billof lading will usually be deemed to haveincorporated the voyage charterparty.
(ii) The parties have not set outcharterparty details in the bill oflading
Where the parties have omitted thecharterparty details, this will notnecessarily prevent the relevantcharterparty from being incorporated.Where this is the case, English law seeksto determine which charterparty theparties intended to incorporate.
Where there is only one charterpartygoverning the voyage, the position issimple: that charterparty is treated ashaving been incorporated. Where there ismore than one potentially relevantcharterparty, the position is as set outabove: the head charterparty will takeprecedence unless there is a voyagecharterparty in the chain, in which casethe voyage charterparty will be deemed tobe incorporated.
Identifying what terms of thecharterparty have beenincorporated into the bill of lading
The fact that a bill of lading seeks toincorporate a charterparty does notautomatically mean that all of the termsof that charterparty will be incorporatedinto the bill of lading.
Precisely which terms of the charterpartythe bill of lading incorporates, will dependupon the following factors:
(i) Whether the bill of lading usesspecific or general words ofincorporation
If the bill of lading uses general words ofincorporation, such as ‘all terms as per cpdated….’, or ‘other conditions as percharterparty dated…’ then the bill of ladingwill only incorporate the charterpartyterms that relate directly to shipment,carriage and delivery. In order for the billof lading to incorporate any of thecharterparty terms that are not applicableto carriage or delivery of the cargo, the billof lading must contain specific words ofincorporation.
General words of incorporation, such asabove, will not be sufficient for the bill of
lading to incorporate, for example, thecharterparty law and jurisdiction clause ordispute resolution clause. In order for thebill to incorporate terms such as these,the bill must contain wording whichspecifically refers to these terms.
For example, the CONGENBILL 2016contains the following, specific, wording:
• ‘All terms and conditions, liberties andexceptions of the Charter Party, datedas overleaf, including the Law andArbitration clause/Dispute resolutionclause, are herewith incorporated.’
This type of wording is sufficient toincorporate into the bill of lading the lawand arbitration/dispute resolutionclauses.
(ii) Whether the charterparty that the billof lading seeks to incorporate (a) hasbeen concluded, (b) is in writing and(c) has been amended
(a) Where the bill of lading seeks toincorporate a charterparty thathas not been concluded/finalisedby the parties, the position underEnglish law is that theincorporation will not be effective.
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However, the parties can circumventthis by inserting wording into the billof lading that shows it is theirintention to incorporate acharterparty that the parties have notyet concluded.
(b) English law provides that a bill oflading can only incorporate the termsof a written charterparty. In thisrespect, a recap telex will suffice aslong as the terms of the charterpartycan be readily ascertained.
A bill of lading cannot incorporate anoral charterparty.
(c) Where the terms of the charterpartythat the bill of lading seeks toincorporate have been amended, thecharterparty terms as they were atthe date the bill of lading was issuedwill be incorporated, and not anylater amended version(s).
(iii) Whether the terms of the charterpartyare consistent with the terms of the billof lading
If any terms of the charterparty areinconsistent with the express terms of thebill of lading, the bill of lading will generallynot incorporate those terms. However, ifspecific words of incorporation have beenused, such as ‘including the arbitrationclause’ the incorporation will, in the firstinstance, be effective despite theinconsistency. However, a Court determiningthe overall effect of the two inconsistentprovisions may well conclude that the clausewas not, in fact, incorporated.
(iv) Whether a term would make sense ifincorporated into the bill of lading
It has been held by the English Court that acharterparty clause that requires only slightmanipulation of its wording in order to makesense in the context of the bill of lading, maybe incorporated. However, a clause whichwould not make sense within the bill oflading without extensive re-drafting, will notbe deemed to be incorporated.
Furthermore, a clause which would becontrary to commercial sense, such as onewith the effect of transferring to a consigneeof part of the cargo liability for all demurrageincurred by the vessel, is unlikely to bedeemed incorporated.
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Definition, definition, definition
Shipowners will have welcomed theClause more than most. On the face of it,the Clause purports to provideshipowners with blanket protection whenthe vessel proceeds to, or remains at,what is called an ‘Affected Area’. UnderSub-clause (h)(iii), ‘Any additional costs,expenses or liabilities whatsoever arisingout of the Vessel visiting or having visitedan Affected Area, including but not limitedto screening, cleaning, fumigating and/orquarantining the Vessel and its crew, shallbe for the Charterers’ account and theVessel shall remain on hire throughout.’Under Sub-clause (k), ‘The Charterersshall indemnify the Owners if after the
currency of this Charter Party any delays,costs, expenses or liabilities whatsoeverare incurred as a result of the Vesselhaving visited an Affected Area during thecurrency of this Charter Party.’
The nature of COVID
However, to rebut the obligation to payhire during delays and indemnify theowners for the additional costs andconsequences suffered by the vesselgenerally, charterers will be quick tochallenge the definitions appearing at thetop of the Clause. Few would argue thatCOVID-19 is not a ‘highly infectious orcontagious disease that is seriouslyharmful to humans’—though some have.
Affected area
More would argue, and have argued, thatthe vessel is, or was not, in an ‘AffectedArea’: that is, ‘any port or place wherethere is a risk of exposure to the Vessel,crew or other persons on board to theDisease and/or to a risk of quarantine orother restrictions being imposed inconnection with the Disease’. Argumentsare increasingly made that the entireworld is an ‘Affected Area’, and the risk atany given port is no greater thananywhere else.
Yet more have argued that whereas thevessel might currently be within anAffected Area, when the fixture was
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Pitfalls anduncertainties
Haris ZografakisPartner, Stephenson Harwood, London
Oliver HuttonSenior Claims Executive, Team Piraeus
Written by
BiMCo’s infectious or Contagious Diseases Clause for Time Charter parties (‘the Clause’) willhave been welcomed by the industry when it was published in response to Ebola in 2015. Butcan it be said to deal fully with disputes arising out of CoviD-19 in 2021, and beyond, and howfar does it address the peculiarities of a time charter party for a single trip? How does it decideissues of responsibility between shipowners and charterers, and how might it be amended tooffer shipowners greater protection?
Disease Clause for Time Charter Parties
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concluded (many months earlier), orwhen the orders were given for the vesselto proceed to the Affected Area (manyweeks earlier), the port or place where thevessel was eventually detained was not infact ‘Affected’. Back then, they argue,there was no risk of exposure orquarantine.
Known risks
And there is a fundamental point: what ifthe time charter trip is for one voyage, therisks of which were known by all at thetime of the fixture? The Clause wasdesigned to cover the unusual risks of amere possibility of calling at particularports over a period of time. So is itappropriate for the certainty of risks inconnection with a time charter trip duringthe pandemic in 2021?
Finding solutions
A potential solution is for the owners toattempt to redefine, or further define, keywords governing the application of the
Clause, so as to turn it into a COVID-specific clause for a period time charteror for a time charter trip. It would beprudent, for example, to include in thedefinition: ‘any viral respiratory diseasefalling within the definition of COVID-19and its variants, or similar’, bearing inmind that new terminology may emerge.
As to ‘Affected Area’, the existence ofsocial contact restrictions (as opposed to
‘other restrictions’ in the Clause, andprobably unthinkable in 2015) could beadded. Or the yardstick of whether a portis an ‘Affected Area’ could be whetherpersonal protective equipment iscompulsory.
There is also the temporal question: atwhat point in time is the risk to beassessed? At the time of the fixture, orwhen the order is given, or when thevessel arrives? And who takes the risk ofa change of circumstances? These are allpoints that give rise to disputes in relationto the Clause.
Take notice of your decision
Sub-clause (b) provides that ‘The Vesselshall not be obliged to proceed to orcontinue to or remain at any place which,in the reasonable judgement of theMaster/Owners, is an Affected Area.’And if (Sub-clause (c)) ‘the Ownersdecide in accordance with Sub-clause (b)that the Vessel shall not proceed orcontinue to an Affected Area they shall’,
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At what point in time isthe risk to beassessed? At the timeof the fixture, or whenthe order is given, orwhen the vesselarrives? And who takesthe risk of a change ofcircumstances?
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naturally, ‘immediately notify theCharterers.’ The charterers can thenissue alternative voyage orders pursuantto Sub-clause (e).
Notifying charterers
But what if the Vessel does proceed to, orcontinue to, or remain at an AffectedArea? And what if, because it is a timecharter trip, the charterers instruct thevessel to load in an Affected Area or todischarge in an Affected Area? Do theowners still need to notify the charterersthat they are complying with the onlyorder that the charterers could give?
Sub-clause (h)(i) states that, if the vesseldoes proceed to, or continue to, orremain at an Affected Area, then ‘TheOwners shall notify the Charterers oftheir decision’. The scheme of the Clauseessentially treats an Affected Area in amanner analogous to an unsafe port(meaning that the owners are notobliged to follow the charterers’ orders),but by Sub-clause (h)(i) the owners still need to ‘decide’ to comply or not comply
(which presupposes that the owners areaware that a place is an Affected Area).
Complications for owners
This raises serious complications for theowners, since the charterers can easilyallege, and do easily allege, that theowners did not notify the charterers oftheir decision to proceed (or continue, orremain, as the case may be). If, then, thecharterers are correct that the owners didnot serve the required notice, theprotection afforded by the Clause canevaporate. This is incredibly convenientfor charterers seeking to avoid having topay hire and expenditure which canquickly run into millions—especially ifsome (or even all) of the crew have to behospitalised—and owners should be extra-careful to prevent charterers escapingmammoth liability on a technicality.
Contractual notice requirements
Sub-clause (h)(i) also contains theexpress qualification that ‘the Ownersshall not be deemed to have waived anyof their rights under this Charter Party’(which would of course include theprotection of the Clause itself). With thisqualification coming at the end of Sub-clause (h)(i) (about notice) and notSub-clause (h) (about the decision to
proceed), it is arguable that theprotection of Sub-clause (h) is notconditional upon the giving of a notice.There is also authority to the effect thatcontractual notice requirements need notbe complied with in obviouscircumstances. Indeed, Denning said:“The law never compels a person to dothat which is useless and unnecessary.”But blindly relying on a case about amotor-cyclist from 1966 is not enough.
Quite clearly, in every aspect ofnotification, the drafters of the Clause hadenvisaged a period time charter with theusual wide trading options, not a timecharter trip.
Measure for measure
Whichever ways the owners can orcannot amend the Clause to offermaximum protection, one obligation islikely to remain non-negotiable. Accordingto Sub-clause (h)(ii), ‘The Owners shallendeavour to take such reasonablemeasures in relation to the Disease asmay from time to time be recommendedby the World Health Organization.’ Thus, aprudent owner will keep fully up to datewith whatever reasonable measures arerecommended by the World HealthOrganization as the situationdevelops.
“The law nevercompels a person todo that which isuseless andunnecessary.” Butblindly relying on acase about a motor-cyclist from1966 is not enough.
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MEMBER nEWS
In March, the steel four masted trainingship Sedov celebrated its 100th birthdayin the port of Kaliningrad. Currentlyowned by the Baltic Fishing Fleet StateAcademy, this beautiful vessel has spentthe last 40 years training cadets in sailingthe world’s oceans.
The Sedov does however have asurprising history. Christened theMagdalene Vinnen when launched onMarch 23, 1921, it was the largestcommercial sailing ship in the world andwas originally built for Club member, F. A.Vinnen & Co.
"We are proud that the most famous shipin our 200-year company history is still inuse," says Michael Vinnen, owner of F. A.Vinnen & Co., and member of The
Swedish Club Board. “Even if the MagdaleneVinnen has not been part of our fleet for 85years, it is still part of our company historyand thus part of our family. We warmlycongratulate the Sedov on the 100thanniversary of its launch and we lookforward to another 100 years of sailing.”
Successfully sailing to South America andAustralia, the cargo-carrying sailing shipwas not only larger than all sailing shipsbuilt at that time but was also equippedwith a powerful auxiliary diesel engine.This made it able to travel much faster inthe doldrums (now known as the Inter-Tropical Convergence Zone) than waspossible with conventional sailing shipsand greatly simplified entry and exitmanoeuvres. In addition to othertechnical innovations, the Magdalene
Vinnen even had electric light and heating,which made life at sea much morecomfortable for the up to 42-strong crew.
In the mid 1930s, during the switch fromsail to steam, the Magdalene Vinnen wassold and saw a new life - and a new name- as the training ship the KommodoreJohnsen. At the end of the Second WorldWar, the ship was ultimately handed overto the Soviets, and named after thefamous Russian polar explorer, GeorgySedov.
At the time of the Iron Curtain, little wasknown about the whereabouts of theSedov, but in 1981 it was converted into atraining ship for the merchant navy andwent into service in 1982.
Since then the Sedov has been a familiarsight at major global windjammermeetings.
The Sedov - celebrating onehundred years of history
Member profile
Members of The Swedish Club since 2006, F. A. Vinnen & Co. is not only ashipowner, but also operates as both a third-party ship manager and a crewingmanager. A family owned and family run business, Managing Partner, MichaelVinnen is the seventh generation in the family who heads the business. Recentlycelebrating its 200th anniversary, F. A. Vinnen & Co. has seen the industry movefrom wooden sailing ships to today’s container vessels, via big steel five-masters,steamers, and general cargo ships.
Unsurprisingly, the ongoing developmentof the Club’s ESG policy was somewhatdelayed by the COVID-19 pandemic – butthe delay was short, the momentum wasnot lost and in many ways the focus wassharpened, says Högberg.
Making a formal commitment
Although the policy was completed intime for the March board meeting,inevitably it was overshadowed by theimmediate decisions that had to be madearound the pandemic. Ultimately, it wasadopted at the October board meeting.The policy establishes a common view onwhat sustainability means for the Club, aswell as providing guidance to employeesand members on what is being done inthis field and which areas the Club willfocus on next.
Back on the agenda
“ESG is about together takingresponsibility for a sustainable future,raising awareness and showingtransparency so members and, ultimately,the end consumer can make informedchoices. Despite the pandemic, at the endof the year ESG returned to the forefrontof the industry’s agenda - and actuallymore quickly than I expected,” says Malin.
The International Group
She welcomes the recent adoption of anESG framework by the InternationalGroup. “We acknowledge that the 13clubs can together do so much more thanjust one of us. Of course, each club willcontinue its own focus, but together wecan do really great things.”
Industry wide pressure
Even with the pandemic as a background,the industry is seeing continued pressure
from financial institutions and otherbusiness partners with initiatives like thePoseidon Principles and the Sea CargoCharter, says Högberg. “Despite COVID-19business goes on, and people want toinvest in an organisation that issustainable and committed and takesresponsibility.
“As a Club, we must continue to betransparent about the ESG risks we seeand how we work to limit that impact.We have to respond to more stringentlaws for financial reporting. Asbusinesses begin to emerge from thepandemic, more and more shipownerswill be asking what their suppliers aredoing in the area, and that - of course -includes us. We have many Boardmembers who are passionate on thistopic, so for The Swedish Club, the focuson ESG has continued throughout theturbulence of the past year.”
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Malin Hogberg faced a number of challenges asthe COVID-19 pandemic took hold in early 2020.Remote working has now become the norm formany of us, but she faced the task of ensuring thatboth Board meetings and the AGM were legallycompliant when held remotely, and that the Club’sBoard and members could hold legally validmeetings and take the decisions required to dobusiness as usual, when not meeting face to face.
Environmental, social and corporate governance(ESG) remained, however, at the heart of thebusiness.
ESG: Maintaining momentum through a pandemic
Malin Högberg, Director, Corporate Legal
ESG upDATE
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1. What isthe name ofthe firstsubmarine toreach theNorth Pole?1 Yellow X nautilus2 The Dolphin
2. WhichPortugueseexplorer wasthe first tosail aroundthe world? 1 vasco DaGamaX Amerigovespucci2 ferdinandMagellan
3. How longis a fathom?1 Two yardsX Two metre2 oneshackle
Winner of Quiz No 3-2020
Lena GöthbergGIGS by Lena GGothenburg, Sweden
Mail your answer to [email protected] The firstcorrect answer pulled out of the hat will win a prize.
The right answers to Club Quiz No 3-2020 are:
X unclear Why was the submarine yellow in the Beatles’ song?
2 USS George H W Bush What is the name of the world’s largest aircraft carrier?
1 Sirocco What is the name of the cold northerly wind from central France and the Alps to Mediterranean?
notice board
Convention on Limitation ofLiability for Maritime Claims,1976
The redesignation by theUnited States Governmentof Venezuela’s MaritimeAuthority (Instituto Nacionalde los Espacios Acuaticos(INEA))
The Protocol of 1996 to amend the Convention onLimitation of Liability for Maritime Claims, 1976 willenter into force for the United Arab Emirates on 23 May2021, in accordance with article 11(2) of the Protocol.
INEA was designated under Executive Order 13850 foroperating in the oil sector of Venezuela and providingassistance to Venezuela’s state-owned oil company,PdVSA. The designation led to understandableconfusion among shipowners who were exposed to thepossibility that they would offend certain provisions ofE.O. 13850 by utilising or paying for services provided byINEA at Venezuela ports on voyages unrelated to the oilor other targeted sectors.
To address this side effect of INEA’s designation, OFAChas now issued General License 30A which clarifies thedilemma. GL 30A has addressed INEAs designation byauthorising all transactions and activities prohibited byE.O. 13850 involving INEA (or any entity in which it owns50% or more) that are ordinarily incident and necessary tooperations or use of ports in Venezuela.
Further information can be found in P&I circular2666/2021, published 9 February 2021.
CLuB infoRMATionnoTiCEBoARD
GOTHENBURG
Amin MohamedAmin joined the IT departmentin Gothenburg on 11 January2021 as a Web Developer.
Staff news
Club Quiz
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Club Calendar 2021
CLuB infoRMATion
For the safety and wellbeing of our valued members, business partners and staff members, we have cancelled allface-to-face Club events until further notice.
We are running a programme of webinars, which you will find on our webhttps://www.swedishclub.com/training/webinars/
To take part, or to find out more, please contact [email protected].
Sadly, in line with the COVID-19 restrictions that remain in place, the Club's 2021 AGM activities will be heldvirtually. The Board meeting will be held on the 16 June and the Annual General Meeting will be held on 17 June.Please keep an eye on your inbox for information.
We all hope that you keep well, and we look forward to meeting again when circumstances permit.
The Swedish Club is a mutual marineinsurance company, owned and controlledby its members. The Club writes Protection& Indemnity, Freight, Demurrage & Defence,Charterers’ Liability, Hull & Machinery, WarRisks, Loss of Hire insurance and anyadditional insurance required byshipowners. The Club also writes Hull &Machinery, War Risks and Loss of Hire forMobile Offshore Units and FPSOs.
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Head Office GothenburgVisiting address: Gullbergs Strandgata 6, 411 04GothenburgPostal address: P.O. Box 171, SE-401 22 Gothenburg, SwedenTel: +46 31 638 400, Fax: +46 31 156 711E-mail: [email protected]: +46 31 151 328
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Contacts
www.swedishclub.com