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PART Ⅰ ADMIRALTY JURISDICTION AND PROCEDURE3

INTRODUCTION3

1 INTRODUCTORY ELEMENTS5

1 The jurisdiction of the Admiralty Court-Historical overview5

2 Admiralty jurisdiction at the present time9

3 Foreign aspects and extent of Admiralty jurisdiction10

4 The civil law and common law approaches10

5 Unique aspects of the Admiralty jurisdiction11

6 The Admiralty Court13

7 Limits of exercise of Admiralty jurisdiction14

8 What is a ship?14

8.1 Why is it important to define it?15

8.2 Old definition15

8.3 Modern definitions17

8.3.1 Physical appearance17

8.3.2 Used in navigation18

2 NATURE OF THE ADMIRALTY JURISDICTION21

1 Introduction21

2 Maritime liens contrasted with other statutory rights in rem22

3 Maritime claims under s20(2)of the SCA 198125

3.1 (a)Any claim to the possession or ownership of a ship or to the ownership of a share therein25

3.2 (b)Any question arising between the co-owners of a ship as to possession,employment or earnings of that ship28

3.3 (c)Any claim in respect of a mortgage of or a charge on a ship or any share therein29

3.4 (d)Any claim for damage received by a ship31

3.5 (e)Claim for damage done by a ship31

3.5.1 Extent of the nature of this claim31

3.5.2 Does it cover enforcement of claims for pure economic loss?33

3.6 (f)Any claim for loss of life,personal injury34

3.6.1 Origins of this provision34

3.6.2 Wrongful act,neglect or default in the navigation or management of a ship37

3.6.3 Incidents that occurred on board another ship37

3.6.4 Defect in a ship,her apparel or equipment under para(f)38

3.6.5 Claims in the Admiralty Court by foreigners against a foreign ship for a tort committed on the high seas41

3.7 (g)Any claim for loss of or damage to goods carried on a ship42

3.8 (h)Any claim arising out of an agreement relating to the carriage of goods on a ship or to the use or hire of a ship43

3.8.1 General principle43

3.8.2 Claims in negligence or deceit for ante-dated bills of lading45

3.8.3 Claims under an agreement for the mooring and unmooring of a vessel46

3.8.4 Claims against salvors for negligence during the salvage services47

3.8.5 Claims for indemnity against a shipowner under a towage contract for the loss of a tug48

3.8.6 Claims for wrongful detention of goods49

3.9 Excluded claims from para(h)49

3.9.1 Non-payment of insurance premiums or brokerage49

3.9.2 Non-payment of container hire or damage to containers under a container leasing agreement52

3.9.3 The enforcement of an arbitration award obtained in relation to a charterparty dispute52

3.10 (j)Any claim under the Salvage Convention 198953

3.11 (k)Any claim in the nature of towage in respect of a ship or aircraft54

3.12 (1)Any claim in the nature of pilotage in respect of a ship or an aircraft54

3.13 (m)Any claim in respect of goods or materials supplied to a ship for her operations or maintenance55

3.14 (n)Any claim in respect of the construction,repair or equipment of a ship or dock charges or dues57

3.15 (o)Any claim by master or crew of a ship for wages57

3.15.1 The breadth of seamen's wages58

3.15.2 Wages in lieu of notice,when a seaman is wrongly dismissed,and emoluments61

3.15.3 Severance payments(redundancy pay)were not considered to be part of wages62

3.16 (p)Any claim by a master,shipper,charterer or agent in respect of disbursements on account of a ship65

3.17 (q)Any claim arising out of an act which is claimed to be a general average act67

3.18 (r)Any claim arising out of bottomry67

3.19 (s)Any claim for the forfeiture or condemnation of a ship or for the restoration of a ship or goods after seizure or for droits of admiralty68

4 Further jurisdiction of the Admiralty court is given by s20(1)(b)and(3)68

5 Power of the Court to grant injunctions69

3 MODE OF EXERCISE OF JURISDICTION73

1 Introduction73

2 Claims in personam-s21(1)of the Supreme Court Act 198174

3 The in rem claim(or the old action in rem)75

3.1 The origins of non-rruly in rem claims75

3.2 Functions of the in rem proceedings75

3.2.1 The crystallisation of non-truly in rem claims on the property76

3.2.2 Does’action brought’mean institution of claim?81

3.3 Who is the defendant in the in rem proceedings?82

3.4 Nature and features of the in rem claim prior to The Indian Grace(No 2)84

3.5 The nature of the in rem claim after The Indian Grace(No 2)85

3.5.1 The decision85

3.5.1.1 Factual background85

3.5.1.2 Ratio decidendi86

3.5.1.3 The reasons86

3.5.2 Criticisms of the decision in The Indian Grace(No 2)89

3.5.2.1 The misapplication of the procedural theory decisions89

3.5.2.2 The sovereign immunity cases-an inappropriate parallel91

3.5.2.3 The service of proceedings is important in the context of the Brussels/Lugano Convention92

3.5.3 Consequences of The Indian Grace93

3.5.3.1 The Indian Grace may have indirectly undermined The Monica S94

3.5.3.2 The effect of The Indian Grace on other assets of the defendant who would be liable in personam96

3.5.3.3 Risk management issues96

3.6 Extent to which the features of the in rem action are affected by The Indian Grace97

3.7 Another point of view100

3.8 Conclusion101

4 The relevant conditions of bringing in rem claims102

4.1 No conditions in truly in rem claims102

4.2 Non-truly in rem:in personam link when the cause of action arose103

4.3 Non-truly in rem:ownership criteria when the action is brought105

4.3.1 Beneficial ownership and arrest of the relevant ship or a sister ship105

4.3.2 Minority shareholding in a ship not sufficient for the purpose of arrest110

4.3.3 Investigation of who is the real beneficial owner:is it permitted?111

4.3.4 When the corporate veil has been pierced114

4.3.5 When the corporate veil was not pierced116

4.3.6 Beneficial ownership and privatisation of State owned corporations120

4.3.7 Beneficial ownership and risk management122

5 Property against which an in rem claim may be brought123

4 PROCEDURE(OVERVIEW)125

1 Issue of the in rem claim form125

2 Effect of issue126

3 Service of the in rem claim form126

4 Arrest by issue and execution of a warrant127

5 The aftermath of arrest128

5.1 Rights of third parties128

5.2 Provision of security for the claim and release from arrest130

5.3 Release in particular circumstances131

5.4 Wrongful arrest132

5.5 Can there be a re-arrest?133

5.5.1 Prior to judgment on liability there can be re-arrest with the leave of the court133

5.5.2 No re-arrest after a judgment on liability has been given134

5.5.3 A foreign in rem judgment can be executed by re-arrest in this jurisdiction136

5.5.4 Prohibition of re-arrest by s21(8)of the SCA 1981137

5.5.5 Re-arrest and risk management138

5.6 Appraisement and sale by the court139

5.6.1 When it can be ordered139

5.6.2 Sale by the admiralty marshal and effect139

5.6.3 Sale pendente lite141

6 Competition of claims brought in Admiralty and Company Courts143

7 Priorities in payment of claims out of the court fund144

7.1 Statutory powers of port authorities for detention and sale145

7.1.1 Effect of sale by the admiralty marshal upon the right of the port authority145

7.1.2 Effect of constituting limitation fund on the right of the port authority146

7.1.3 The Scottish approach147

7.1.4 Reconciliation of approaches147

7.1.5 Port authorities'statutory right of sale and risk management148

7.2 The ship-repairers'lien and risk management149

8 Distribution of the court fund by the court152

9 Applicable law to maritime liens and conflict of laws154

10 Extinction of maritime liens159

11 Are maritime liens transferable by assignment of the claim to,or payment by,a third party?159

11.1 Assignment159

11.2 Voluntary payment of claims161

5 RULES AND DOCTRINES RESTRICTING THE JURISDICTION OF THE ADMIRALTY COURT TO ADJUDICATE ON THE MERITS OF A CASE163

1 Introduction163

2 Jurisdiction bases163

3 Occasions when jurisdiction may not be exercised or be maintained164

3.1 Discontinuance of proceedings on ground of time bars165

3.1.1 Cargo claims against the carrying ship or her owners165

3.1.2 Indemnity claims for liability to cargo owners167

3.1.3 Claims for loss of life or personal injury against the carrying ship168

3.1.4 Claims of passengers carried on passenger vessels168

3.1.5 Property or personal injury/loss of life claims against another ship at fault168

3.1.6 Claims for contribution169

3.1.7 Salvage claims169

3.1.8 Claims for wages169

3.2 No assumption of jurisdiction if a claim in personam is not within Ord 11169

3.3 Stay on the ground of forum non-conveniens170

3.3.1 Historical perspective and'the 1936 rule'170

3.3.2 Why was the 1936 rule distinct from the doctrine of forum non-conveniens?172

3.3.3 The gradual incorporation of the Scottish doctrine into English law173

3.3.4 The application of forum non-conveniens principles and service out of the jurisdiction under RSC Ord 11178

3.3.5 The present formula of forum non-conveniens179

3.3.5.1 General principle180

3.3.5.2 Burden of proof180

3.3.5.3 Effect of founding jurisdiction as of right180

3.3.5.4 Connecting factors(first stage test)181

3.3.5.5 Second stage test(all the circumstances)181

3.3.5.6 Treatment of a legitimate personal juridical advantage181

3.3.6 Order 11 and forum non-conveniens compared183

3.3.7 What change did The Spiliada bring to the doctrine of forum non-conveniens?184

3.3.8 Forum shopping by way of limitation actions184

3.4 Stay on the ground of a foreign jurisdiction agreement188

3.4.1 General principle188

3.4.2 What is a strong cause or reason for the court to refuse stay of proceedings?189

3.4.2.1 Availability of factual evidence in England is not in itself a strong cause189

3.4.2.2 Time bar in the contractual jurisdiction is not in itself a strong cause191

3.4.2.3 Expert evidence in England would be a strong cause193

3.4.2.4 Multiplicity of proceedings is a strong cause194

3.4.2.5 The Spiliada connecting factors provide a strong cause196

3.4.2.6 Forum shopping in breach of a jurisdiction agreement and risk management197

3.5 Stay on the ground of an arbitration agreement200

3.5.1 General principles under s9 of the Arbitration Act 1996200

3.5.2 Application of principles in recent cases201

3.5.3 The scope of s 11 of the AA 1996203

6 CONVENTION JURISDICTION BASES AND MULTIPLE PROCEEDINGS IN ADMIRALTY205

1 Introduction205

1.1 The Athens Convention 1974205

1.2 Convention relating to Contracts for International Carriage of Goods by Road 1956(CMR)205

1.3 The International Convention on Civil Liability for Oil Pollution Damage 1992206

1.4 The International Convention Relating to the Arrest of Sea-going Ships 1952206

1.5 The International Convention on Civil Jurisdiction in matters of Collisions 1952206

1.6 The Brussels and Lugano Conventions207

2 The ECJCs209

2.1 Application of the Conventions209

2.1.1 The domicile rule and allocation of jurisdiction209

2.1.2 Mandatory versus optional derogation from the domicile rule210

2.1.3 Inapplicability of certain national jurisdictional rules211

2.1.4 Convention allocation to other Convention jurisdiction211

2.2 Community versus national law concepts211

2.3 Conflicts of jurisdiction-multiple proceedings within Contracting States213

2.3.1 When does a court of a Contracting State have an obligation to decline its jurisdiction?213

2.3.2 When does a court of a Contracting State have an obligation to stay its proceedings?214

2.3.3 When does a court of a Contracting State have discretion to decline or stay its proceedings214

2.3.4 How do the Convention rules resolve lis alibi pendens?215

2.3.4.1 English lis pendens versus Convention Us pendens215

2.3.4.2 When is a court seised216

2.3.4.3 When is there a'pending action'under the Convention rules?222

2.3.4.4 The'same cause of action'and'between the same parties'222

3 How do the Convention rules delegate jurisdiction on the merits?228

3.1 The window of Art 57229

3.1.1 The flight to the Arrest Convention 1952230

3.1.2 How has the trap of The Deichland been prevented?232

3.1.3 Submission to jurisdiction and bail234

3.1.4 The new Arrest Convention 1999235

3.1.5 The flight to the Collision Convention 1952236

3.2 Return to the general Convention ground of jurisdiction237

3.2.1 Operation of Arts 21 and 22237

3.2.2 Definition of related actions238

4 Can principles of forum non-conveniens be permitted in the ECJC Regime?239

4.1 The Convention approach239

4.2 When the defendant is not domiciled in a Contracting State241

4.2.1 The effect of Art 4 of the Conventions241

4.2.2 Limitation actions within the Conventions regime and risk management244

4.3 When the competing court is in a non-contracting State245

5 Jurisdiction Agreements,Art 17248

5.1 Is jurisdiction under Art 17 exclusive,in a sense of being mandatory?248

5.2 Why is the status of Art 17 important?251

5.3 Is there a conflict between Arts 57 and 17?254

5.3.1 When does jurisdiction under Art 17 apply?255

6 An overview of remedies for breach of jurisdiction agreements258

7 ANTI-SUIT INJUNCTIONS261

1 Underlying principles261

2 When an anti-suit injunction can be granted263

2.1 The’breach of contract'cases263

2.1.1 General principles263

2.1.2 Breach of an arbitration agreement265

2.1.3 Breach of an English jurisdiction agreement267

2.1.4 Discretion of the judge in’breach of contract'cases268

2.2 The’non-breach of contract’cases and anti-suit injunctions269

2.2.1 Historical overview269

2.2.2 The new formula-stricter approach having regard to comity271

2.2.2.1 Brief facts of Airbus v Patel271

2.2.2.2 Airbus v Patel(general principle)272

2.3 Jurisdiction allocated by a convention and anti-suit injunctions(in’non-contract'cases)273

2.4 Mixture of’contract'and’non-contract'cases274

2.5 Are there any common considerations applicable to the various categories?275

2.5.1 ‘Vexatious or oppressive'-an offensive element in the pursuit of justice275

2.5.2 The second common consideration is’comity'276

2.6 Practical considerations and risk management277

2.7 Conclusion279

PART Ⅱ ACQUIRING OWNERSHIP IN SHIPS283

OVERVIEW283

8 OWNERSHIP,REGISTRATION AND MANAGEMENT OF SHIPS285

1 Introduction285

1.1 Importance and role of the ship's flag285

1.2 Flags of convenience286

1.3 The regulatory regime287

1.3.1 The Flag and Port State Controls287

1.3.2 The role of classification societies in the safety of ships289

1.3.3 The role of the ISMC and further initiatives on safety289

1.3.4 The missing link in the equation of safety291

2 Statutory overview of ownership and registration of British ships293

2.1 The effect of the Merchant Shipping Acts prior to l995293

2.2 Who can own and register a British ship under the present statute?296

2.2.1 Eligibility to own a British ship under the MSA 1995296

2.2.2 Eligibility to own a British fishing vessel297

2.3 The decline of British shipping297

3 Ownership principles299

4 Management of ships303

4.1 General overview303

4.2 The framework of management of ships305

4.3 Authority of ship managers and risk management306

4.4 Duties arising from the management agreement311

4.5 Consequences of breach by the manager and contractual exclusion or limitation of liability314

4.6 Indemnity and’Himalaya'clauses315

4.7 Insurance316

4.8 Safety aspects and the manager's obligations under the ISMC316

5 Legal implications of the ISMC319

5.1 Effect of non-compliance319

5.2 The rule of attribution320

5.3 The due diligence provision of the HVR322

5.4 Privity of the assured under s 39(5)of the MIA 1906324

5.5 Limitation of liability328

5.5.1 From an English law perspective328

5.5.2 From a US perspective330

5.6 Criminal liability334

5.6.1 Statutory offences under the MSAs334

5.6.2 Criminal liability under SI 1998/1561336

5.6.3 Criminal liability of a company for involuntary manslaughter338

5.6.3.1 The test for gross negligence manslaughter against individuals339

5.6.3.2 Attributing liability for gross negligence manslaughter of individuals to the company340

5.6.3.3 The future of corporate manslaughter344

9 SHIP MORTGAGES347

1 Introduction347

2 What is the nature of a ship mortgage in English law?348

2.1 The property transfer theory348

2.2 The statutory nature of a ship mortgage perfected by registration350

3 Effect of the statutory scheme of registration353

4 Unregistered ships and status of an unregistered mortgage355

5 Comparison of a ship mortgage with other types of security357

5.1 Charge357

5.2 A pledge358

5.3 Common law possessory lien359

6 Priorities of mortgages359

6.1 Priorities between mortgages359

6.2 Further advances361

6.3 Harbour authority claims and risk management by the mortgagee362

7 Conflict of laws363

7.1 Law governing the mortgage and law of the agreement to grant a mortgage363

7.2 Priorities between foreign liens and mortgages365

7.3 Proposed solutions and risk management issues369

8 Rights and obligations of the mortgagor370

8.1 The mortgagor is bound by contractual covenants370

8.1.1 An obligation to insure370

8.1.2 An obligation to maintain the ship in good condition and repair371

8.1.3 An obligation to notify the mortgagee372

8.1.4 An obligation to discharge claims or liens372

8.1.5 An obligation not to sell or grant a charge on the ship373

8.1.6 An obligation of legal trading373

8.1.7 A covenant as to charterparties373

8.2 The mortgagor's statutory obligations373

8.3 The mortgagor's right of ownership of the mortgaged ship373

8.4 The mortgagor's right to redeem the ship375

9 Mortgagee's rights and obligations379

9.1 The right to take possession379

9.1.1 What would amount to default?380

9.1.2 When would the security be impaired?380

9.2 Mode of exercising his powers382

9.3 Mortgagee's rights and obligations in possession383

9.3.1 Right to freight383

9.3.2 Obligation during operation and management384

9.4 Power of sale385

9.4.1 Source of power385

9.4.2 Role of the mortgagee in the sale of the ship385

9.4.3 Nature of duty of the mortgagee in the exercise of his power of sale386

9.4.4 Effect of sale by the mortgagee391

9.5 Appointment of a receiver391

9.6 Foreclosure392

10 Effect of mortgagee's exercise of rights upon charterparties393

10.1 The issues393

10.2 Charterparty subsequent to the mortgage(leading cases)394

10.3 Charterparty entered into prior to the mortgage(leading cases)396

10.4 Can a purchaser of a ship be bound by a pre-existing charterparty?(A related matter)399

10.5 An injunction on the ground of tort of knowing interference with contractual rights400

10.6 Conclusion403

10.6.1 A post-mortgage charterparty:the impairment factor403

10.6.2 A pre-mortgage charterparty:the knowledge factor403

10.6.3 Exception to De Mattos principle404

10.6.4 The tort of wrongful interference with a contract404

11 Risk management and insurance issues of the mortgagee406

10 SHIPBUILDING409

1 Introduction409

2 Nature of shipbuilding contracts409

3 Pre-contract stage415

4 Significance of representations during negotiations and risk management416

5 The making of a shipbuilding contract and risk management417

6 The framework of the contract420

7 Types of contractual terms421

7.1 General421

7.2 Implied terms under the SOGA 1979421

7.2.1 Compliance with description(the law before 3 January 1995)422

7.2.2 The’taming'of the SOGA 1979 by the SSGA 1994424

7.2.3 The Demise of’merchantable quality'425

7.2.3.1 The law until 3 January 1995425

7.2.3.2 The law after 3 January 1995425

7.2.4 Fitness for purpose426

7.2.4.1 Reliance on the skill and judgment of the seller427

7.2.4.2 Idiosyncrasy of the subject matter428

7.3 Exclusion clauses and the Unfair Contract Terms Act 1977429

8 The specification430

9 Increase of price431

9.1 Lack of consideration and risk management431

9.2 Economic duress and risk management434

10 Basic rights and obligations of the parties435

10.1 Payment,transfer of title and protection of the builder in the event of non-payment436

10.1.1 Title and risk436

10.1.2 Statutory protection of the builder in the event of buyer's default436

10.1.3 Buyer's default and contractual protection of builder437

10.1.4 Repudiation of contract and risk management437

10.1.5 What is to happen to the vessel on rescission by the builder?438

10.1.6 Rights of the builder under the guarantee for payment of instalments439

10.1.7 Acceleration in payment and penalty clauses441

10.2 Builder's guarantee,trials and risk management443

10.3 Default by builder-the buyer's right to reject the ship or rescind the contract445

10.4 Delay in delivery and force majeure446

10.5 Effect of buyer's rescission448

10.6 Can specific performance be ordered?449

11 Insurance and management of risks450

12 Manufacturer's or builder's liability to third parties for defective products451

11 SHIP SALE AND PURCHASE455

1 Introduction455

SECTION A THE NEGOTIATIONS AND CONTRACT STAGE457

2 The making of the contract and good faith457

3 The parties’obligation to avoid misrepresentations458

3.1 Untrue statements forming express terms of the contract458

3.2 Mere representation inducing the contract459

3.3 Brokers’role and risk management460

4 On the making of a binding contract and risk management461

4.1 Express your intention clearly461

4.2 The effect of non-signing a formal document upon the validity of the contract463

4.3 The effect of’buyer to be nominated'on the validity of the contract465

4.4 What do’subjects’mean?467

5 Classification of terms of a contract and their importance473

5.1 At common law473

5.2 Under the Sale of Goods Act 1979474

5.2.1 Sale by description475

5.2.2 The passing of property475

6 Contractual terms under standard forms of the sale contract477

6.1 When is the deposit payable?477

SECTION B THE INSPECTIONS STAGE479

6.2 Inspections by the buyer479

Section C THE COMPLETION STAGE480

6.3 Inspection by classification society(drydocking)480

6.4 Notice of readiness and risk management483

6.5 Essential documentation for exchange at delivery487

6.6 Sellers’obligations under cl 9487

6.6.1 Sellers’undertaking487

6.6.2 Construction of cl 9488

6.6.3 Comments on the wording of cl 9 in the 1987 and 1993 NSF490

6.6.4 Judicial interpretation of cl 9 NSF 1993490

6.6.5 Risk management in drafting and safeguarding against breach of cl 9492

6.7 Condition of vessel on delivery and risk management493

6.8 The closing meeting498

6.9 Post-delivery matters498

7 The parties’respective remedies for default499

7.1 Buyer's default499

7.1.1 The seller's contractual remedies499

7.1.2 The seller's statutory remedies500

7.2 Seller's default501

7.2.1 Delay in delivery or non-delivery as per contract501

7.2.2 Other breaches by the seller502

7.3 Causation and remoteness of loss503

7.4 Mitigation of loss by the buyer504

7.5 Currency of loss505

8 Legal and commercial risk management for the buyer506

8.1 Considerations before exercising the option to reject the ship506

8.2 Considerations before applying for a freezing injunction against the purchase money507

8.2.1 The underlying principles507

8.2.2 Limits of granting such an injunction to a buyer of a ship508

8.2.2.1 There must be an accrued cause of action508

8.2.2.2 Obligation to notify the sellers of the application prior to delivery512

9 Civil liability of Classification Societies to buyers and other third parties513

PART Ⅲ SAFETY REGULATIONS IN NAVIGATION AND LIABILITIES OVERVIEW529

12 COLLISIONS AT SEA AND LIABILITIES531

Introduction531

SECTION A531

1 The Collision Regulations and their application531

1.1 Origins of the regulations531

1.2 Statutory presumption of fault and its subsequent abolition532

1.3 The law and regulations at present533

1.4 Ships being subject to the Collision Regulations534

1.5 Definition of vessel and ship534

1.6 Types of Collision Regulations536

1.6.1 General536

1.6.2 Steering and sailing rules(Pt B,Section Ⅰ)536

1.6.3 Conduct of vessels in sight of each other(Pt B,Section Ⅱ)542

1.6.4 Conduct of vessels in restricted visibility (Pt B,Section Ⅲ)544

1.6.5 Lights and shapes (Pt C)546

1.6.6 Sound and signals (Pt D)547

SECTION B548

2 Criminal liability548

2.1 General548

2.2 Statutory offences under the MSA 1995548

2.2.1 Disobeying the Collision Regulations548

2.2.2 Not giving assistance to vessels after collision or to vessels or persons in distress550

2.2.3 Breach of documentation and reporting duties551

2.2.4 Dangerously unsafe ships and unsafe operation of ships552

2.2.5 Conduct endangering ships,structures or individuals553

2.2.6 Offence in relation to lighthouses,buoys or beacons555

2.2.7 Breach of duty to give directions after shipping casualties555

2.3 Involuntary manslaughter for breach of duty556

SECTION C559

3 Civil liability559

3.1 Introduction559

3.2 Who may be liable?560

3.2.1 The employer of the wrongdoer in personam560

3.2.2 Persons responsible for the management and operation of the ship562

3.2.3 Liability attaches on the ship562

3.2.4 Master and crew563

3.2.5 Tug or tow563

3.2.6 Salvors564

3.2.7 Pilots564

3.2.8 Port authority565

3.2.9 Shipbuilders and ship-repairers568

3.3 Actionable negligence568

3.4 Breach of the duty of care569

3.4.1 Standard of care and burden of proof569

3.4.2 Res ipsa loquitur571

3.5 Causation in fact573

3.6 Causation in law576

3.7 Defences available to the defendant577

3.7.1 Inevitable accident577

3.7.2 Contributory negligence579

3.7.2.1 The proportionate fault rule579

3.7.2.2 When and how does the rule apply?579

3.7.2.3 The effect of subsequent negligence by the claimant-multiple causes583

3.7.3 Actus novus interveniens588

3.7.4 Exceptions to the proportionate fault rule590

3.7.4.1 Alternative danger590

3.7.4.2 When a clear line can be drawn between two separate negligent acts591

3.7.4.3 When an innocent third ship claims against one of the tortfeasors593

3.7.4.4 Claims for personal injury or loss of life594

3.7.5 The defence of necessity594

3.7.6 Time bar defence594

3.8 How claims for loss of life and personal injury are dealt with595

3.9 Claims in relation to cargo damage596

3.10 Claims in relation to collision between a ship and other objects602

3.11 Contribution between joint tortfeasors605

3.11.1 The common law rule in non-admiralty cases605

3.11.2 Property claims in admiralty606

3.11.3 Non-property claims in admiralty606

3.11.4 When the common law rule applies in admiralty606

3.12 Remoteness of damages607

3.12.1 General principle607

3.12.2 The kind of damage617

3.12.3 Extent of damage618

3.12.4 Mitigation of loss or damage620

3.12.5 The idiosyncrasy of the claimant,remoteness and mitigation of damages621

4 Assessment of damages627

4.1 General principle:restitutio in integrum627

4.2 Total loss of a ship628

4.2.1 Value of the ship(how is it ascertained)628

4.2.2 Loss of a profitable charterparty629

4.3 Partial loss of the ship and incidental losses631

4.3.1 Cost of repairs631

4.3.2 Loss of profit631

4.3.3 Out of pocket expenses and financial loss632

4.3.4 Detention time and dock charges635

4.4 Pollution damage637

4.5 Damages in foreign currency639

5 Limitation of liability640

6 Limitation periods for commencement of claims640

7 Insurance issues and risks arising from collisions641

PART Ⅳ ASSISTANCE AT SEA AND IN PORTS647

OVERVIEW647

13 SALVAGE649

1 Introduction649

2 The Concept of Salvage under maritime law650

3 Salvage under contract651

4 The Salvage Conventions652

5 Preconditions of salvage654

5.1 The relevant waters for salvage prior to the Salvage Convention 1989654

5.2 The law under the Salvage Convention 1989657

5.3 What is a recognised subject of Salvage658

5.3.1 The law prior to the Convention658

5.3.2 The law after the Convention658

5.3.3 Hovercrafts/aircraft659

5.3.4 Bunkers660

5.3.5 Cargo660

5.3.6 Freight660

5.3.7 Life salvage660

6 Elements of salvage662

6.1 Danger662

6.1.1 General principles662

6.1.2 Future or contingent danger665

6.1.3 Effect of danger on a towage contract666

6.1.4 Threat or danger to the environment668

6.2 Voluntary services668

6.2.1 Pre-existing agreement preventing salvage668

6.2.2 Exemptions670

6.2.2.1 When would the services of the master and crew qualify for salvage award?670

6.2.2.2 When would the services of tugs under towage qualify for salvage award?670

6.2.2.3 When would the services of pilots qualify for salvage award?671

6.2.2.4 Would cargo-owners be able to claim a salvage award for services rendered?674

6.2.3 Could performance of duties arising under statute or official duty be a bar to salvage award?676

6.2.3.1 Duty to assist after a collision676

6.2.3.2 Duty to assist others in distress678

6.2.3.3 Salvage by officers under orders of a naval commander of the Royal Navy679

6.2.3.4 Salvage operations controlled by public authorities680

6.2.3.5 Salvage operations and HM coastguards682

6.2.3.6 Salvage by lifeboat crews of the RNLI682

6.3 Success683

6.3.1 Meritorious services683

6.3.2 Salvage services by standing by a vessel in danger686

6.3.3 Salvage and engaged services686

7 Salvage Agreements687

7.1 General687

7.2 Court's intervention689

7.2.1 When the agreement is reached by extortion or overbearing conduct690

7.2.2. Misrepresentation and non-disclosure690

8 The Master's authority to enter into salvage agreements692

8.1 Master's authority at common law692

8.1.1 The basis of the master's authority to bind his principal to a salvage contract693

8.1.2 The basis of the master's authority to bind cargo interests to a salvage contract693

8.2 Master's authority under the Convention702

9 Duties and conduct of salvors704

9.1 Best endeavours704

9.2 Due care705

9.3 Negligent misconduct706

9.4 Unresolved issues715

9.5 Negligence occurring before salvage services were rendered717

10 The position of several salvors719

10.1 Dispossession of one salvor by another under maritime law salvage719

10.2 Dismissal of a salvor under contract by the master of the vessel being salved721

10.3 The position of several salvors under the Salvage Convention 1989724

11 Duties of the Salved724

11.1 Duty to co-operate724

11.2 Obligation to provide security to salvors726

12 Assessment of the award and special compensation727

12.1 The underlying principles and developments727

12.2 The criteria of assessing the salvage award and special compensation730

12.3 The decision in The Nagasaki Spirit732

13 Problems arising from the drafting of the Convention734

13.1 Territorial limits735

13.2 Substantial physical damage735

13.3 Threatened damage735

13.4 Fair rate736

13.5 The increment736

13.6 Security for special compensation737

13.7 The solution provided by the SCOPIC-government intervention737

14 Apportionment740

15 LOF 2000 overview740

16 An overview of environmental salvage741

Successful saving of The Castor and related problems743

17 Jurisdiction744

18 Time limits745

14 TOWAGE747

1 Introduction747

2 Definitions747

3 Towage versus salvage749

4 The making of a binding contract753

4.1 Authority of the master to bind the shipowners753

4.2 Authority of the master to bind the cargo-owners755

4.3 Authority of the tugmaster756

4.4 Pre-contractual duties757

4.5 Unfair contract terms758

5 Commencement of towage,interruption and termination759

5.1 Commencement759

5.2 Interruption of towing763

5.3 Termination of towing765

6 Duties of the tugowner766

6.1 Fitness of the tug for the purpose for which she is required766

6.1.1 Cases in favour of an absolute warranty of fitness767

6.1.2 The view that there is no absolute warranty of fitness of the tug772

6.1.3 What do the contractual terms of standard towage contracts provide?774

6.2 The position of fitness when a specific tug is requested775

6.2.1 One school of thought:no absolute warranty of fitness775

6.2.2 Second school of thought:there can be no general rule about absence of a warranty of fitness778

6.2.3 Tug fitness and risk management779

6.3 To use best endeavours to complete the towage779

6.4 The duty to exercise proper skill and diligence throughout780

7 Duties of the tow781

7.1 Duty to specify what is required and to disclose the condition of the tow781

7.2 The tow to exercise due care and skill during the towage783

7.3 To pay remuneration to the tug783

8 Relationhip between tug and tow and their liabilities to third parties784

8.1 Tug and tow784

8.2 Tug,tow and third parties785

8.2.1 Tug in control of a particular manoeuvre786

8.2.2 Contrast between the’unit’and the’control’theories787

8.2.2.1 The unit theory(the notion of identity)787

8.2.2.2 The control theory789

8.2.2.3 Application of the control theory for risk management791

8.2.3 Joint tortfeasors(the common law rule)792

8.2.4 Contribution between joint tortfeasors by statute795

9 Exclusion from liability and indemnity clauses(risk management issues)797

9.1 The ambit of the exception from liability clauses798

9.2 Indemnity clause802

9.3 Limitations to exclusion and indemnity clauses804

10 The substitution and Himalaya Clause of the UKSTC808

10.1 Substitution808

10.2 The Himalaya provision and the Contracts (Rights of Third Parties) Act 1999809

11 Limitation of Liability812

15 HARBOURS AND PILOTAGE815

Introduction815

SECTION A-ASPECTS OF LAW AFFECTING HARBOURS817

1 Sources of powers and definitions817

1.1 Statutes and regulations regulating harbours’powers817

1.2 Definitions818

2 Types of harbour authorities819

3 Powers,duties and liabilities of harbour authorities820

3.1 Powers of harbour authorities820

3.2 Duties and rights of harbour authorities821

3.2.1 Duty to operate the port821

3.2.2 Statutory duty to provide navigational safety,and other safety procedures825

3.2.2.1 Abandonment of wreck by its owner and powers of harbour authorities827

3.2.2.2 Legal risks management in drafting831

3.2.2.3 The duty to mark wrecks and liability to third parties arising from unmarked wrecks risk management issues832

3.2.3 Statutory duty to maintain the port in good condition and risk management835

3.2.4 Common law duty of care to make the port safe for users and risk management836

3.2.5 Contractual duty to make the port reasonably safe839

3.2.6 The duty to provide efficient pilotage services840

4 Liability of shipowners for damage caused to harbours842

5 Harbour dues853

SECTION B-PILOTAGE LAW853

1 Introduction853

2 Duties of a competent harbour authority in relation to pilotage855

2.1 Consideration and provision of pilotage service855

2.2 Authorisation of pilots856

3 Charges by the competent harbour authority857

4 Duties of masters and pilots in a compulsory pilotage area857

5 Pilot's authority and division of control between master and pilot859

6 Liability of a pilot862

7 Liability of harbour authorities with respect to pilotage863

8 Liability of the shipowner for negligence of the pilot864

PART Ⅴ MISCELLANEOUS875

OVERVIEW875

16 EXCLUSION AND LIMITATION OF LIABILITY877

1 Introduction877

2 The scope of tonnage limitation of liability under the 1976 Convention879

2.1 Reasons of acceptance of the 1976 Convention880

2.2 Application of the Convention and limitations881

2.2.1 Limitation to sea-going ships881

2.2.2 Hovercraft not included in the Convention882

2.2.3 Minimum tonnage882

2.2.4 Floating and drilling platforms excluded882

3 Persons entitled to limit882

3.1 Shipowners and others883

3.1.1 Owner,manager or operator883

3.1.2 Charterer884

3.1.3 Any person for whose act,neglect or default the shipowner or salvor is responsible885

3.2 Salvors886

3.3 The liability insurer887

3.3.1 When is there a right of action against the insurer?887

3.3.2 ‘Pay to be paid rule’under the rules of the liability insurer889

3.3.3 Insurer's contractual and statutory defences889

3.3.4 Implications for claimants in respect of personal injury,or loss of life890

3.3.5 What the future holds for passengers891

3.4 Harbour authorities892

4 Claims subject to limitation893

4.1 All claims whether for damages or for a debt or indemnity (Art 2(l)(2))893

4.2 Expenses incurred for wreck removal imposed by law (not being incurred contractually) (Art 2(l)(d)(e))894

4.3 Claims occurring on board or in direct connection with the operation of the ship or with salvage operations (Art 2(l)(a))895

4.4 Claims for consequential loss under Art 2(l)(a),and a possible anomaly896

4.5 Claims for loss resulting from delay (Art 2(l)(b))897

4.6 Claims for rights which have been infringed (Art 2(l)(c))897

4.7 Claims in respect of measures taken in order to avert or minimise loss (Art 2(l)(f))898

5 Claims excepted from limitation (Art 3(a)-(e))898

5.1 Salvage and contribution in general average claims899

5.2 Claims for oil pollution899

5.3 Nuclear damage claims900

5.4 Claims by the master and crew against employers900

5.5 Claims by harbour authorities for expenses in relation to wreck raising or removal in the UK902

5.6 Claims of contractors with shipowners in respect of steps taken to avert or minimise loss902

6 Exclusion of total liability903

7 Conduct barring limitation or exclusion of liability905

7.1 Comparison between the’fault and privity’system and the present systems of limitation907

7.1.1 Burden of proof907

7.1.2 Personal act or omission versus acts or omissions of others908

7.1.3 ‘Fault or privity’versus’intent or recklessly and with knowledge'909

7.1.4 Faults of ship-managers under the old system as compared with the present915

7.1.5 ‘Loss’and’such loss'917

8 Corporate personality and whose misconduct should be attributed to the company919

8.1 The concept of the’alter ego’of a corporation919

8.2 The’identification’doctrine924

8.3 The’Meridian rule of attribution’by interpretation of the substantive rule of law929

8.4 The effect of the ISMC on limitation and risk management930

9 Establishment of the limitation Fund934

9.1 Procedural matters under the Convention934

9.2 Counterclaims935

9.3 Amount of limitation935

9.4 Procedure in the Admiralty Court in relation to limitation (brief account)937

17 THE EUROPEAN COMMISSION AND MARITIME SAFETY939

Recent developments939

1 Introduction939

2 First set of proposals940

2.1 A proposed amendment to Directive (94/57/EC)on inspections of ships940

2.2 Phasing out single-hull tankers940

2.3 Amending the directive on Port State Control941

3 Second set of Proposals941

3.1 The proposed directive for a Community monitoring,control and information system942

3.2 The proposed regulation for establishment of a Maritime Safety Agency943

3.3 The proposed regulation on the establishment of a fund for compensation for oil pollution damage in European waters and reform of the liability regime944

3.3.1 The present system of compensation for oil pollution944

3.3.2 The Commission's proposals and reasons946

3.3.3 A brief commentary on the Commission's proposal947

18 RISK MANAGEMENT CULTURE AND COLLECTIVE RESPONSIBILITY951

1 Introduction951

2 Understanding infrastructures of shipping companies952

2.1 Internal infrastructures953

2.1.1 Vertical and horizontal structures953

2.1.2 Safety culture954

2.1.3 Risk tolerance954

2.2 Relational infrastructures954

2.2.1 Corporate interrelations954

2.2.3 Owners and others955

2.3 External infrastructures956

2.3.1 Regulatory and fiscal956

2.3.2 Third parties’factors956

2.3.3 Market forces957

3 Collective responsibility and commitment958

3.1 Risk exposure958

3.2 Risk profile959

3.3 Risk management standards for risk control960

3.3.1 At the incorporation stage960

3.3.2 At the technical and operational stage961

3.3.3 At the contract stage961

3.3.4 At the performance stage962

3.3.5 At the dispute resolution stage965

3.4 Enhanced safety culture965

3.4.1 Adopting a systematic process965

3.4.2 Funding risks966

3.4.3 Commitment to change and collective responsibility966

Index969