- Recognise the importance of Shipping Law and its critical application to International Trade and the Carriage of Goods by Sea.
- Understand the fundamentals of the Law of Contract, Agency and Tort (Negligence) in relation to Shipping Contracts.
Key Learning Outcomes
- Appreciate the critical importance of Shipping Law to risk reduction and profitability when formulating International Trade and Shipment contracts
- Understand the application of INCOTERMS in relation to interconnected Sale of Goods, Charterparty and Bill of Lading contracts
- Benefit from interactive reviews and case study discussions of Voyage (GENCON) and Time (NYPE) Charter Party negotiations, fixtures and standard terms
- Comprehend the legal functions of the Bill of Lading and the regulatory incorporation of the Hague, Hague Visby or Hamburg Rules defences and liabilities
- Recognise the special circumstances and liabilities that arise when Bills of Lading are issued in connection with Charterparties
- Raise awareness of the use of Cargo Insurance, Shipowners & Charterers P&I and H&M Insurance to protect the parties to International Trade and Shipment contracts.
- Understand the use of Jurisdiction and Law clauses and the processes of
- Mediation, Arbitration and Litigation to resolve maritime trade disputes.
Who Should Attend
- Executives employed in the shipping industry wanting to expand their knowledge of legal and commercial matters
- Employees who work for commodity traders or any form of trader who use shipping for exporting or importing commodities and goods
- Governments or Government Authorities involved with the international shipping industry and wishing to learn more about the legal and commercial framework
- Anyone who desires to gain a deeper understanding of the legal and contractual framework of the Asian maritime industry
- Lawyers and Executives in P&I clubs and Insurance companies
- Bank Executives dealing with the Shipping and Maritime Industry
SHIPPING LAW INTRODUCTION
- Shipping (Dry) Law vs. Maritime (Wet) Law vs. Admiralty (Procedural) Law
- Common Law and Civil Law jurisdictions in Asia
- Maritime Conventions and the Regulation of Shipping
- Salvage, General Average and Limitation of Liability
- Does ‘International Shipping law’ actually exist?
BASICS OF ENGLISH COMMERCIAL LAW
- English common law system, its application and commercial influence.
- Contract law principles and the scope of ‘freedom of contract’.
- Tort law, the ‘duty of care’ and ‘vicarious liability’.
- Restitution and the ‘reasonable foreseeability’ test.
- Contract term exclusions and ‘Force majeure’.
- CASE STUDY: Charterparty negotiations, binding offers and binding contracts.
INCOTERMS AND INTERNATIONAL SALE AND SHIPPING CONTRACTS
- Identification of the sale and shipment parties: the seller/ shipper, the buyer/consignee, the shipper/charterer and the shipowner/carrier
- INCOTERMS and allocation of risk under CIF, CFR or FOB terms
- Use of bank issued Letters of Credit and MCP terms
- Interconnection with shipment contracts inclusive of Voyage and Time Charterparties, COA’s and Bills of Lading.
- Marine insurance aspects inclusive of Cargo, P&I and H&M insurance.
LAW AND PRACTICE OF CHARTERPARTY CONTRACTS
- Voyage and Time Charter common obligations
- Owners’ absolute obligation to provide a seaworthy (fit for purpose) vessel
- Voyages must be completed with ‘utmost dispatch’
- No deviation from direct route except as may be justifiable or agreed by the Liberty clause
- Charterer must nominate a safe berth (Voyage C/P) or a safe port (Time C/P)
- Shipper/Charterer undertakes not to ship dangerous goods
- Agreement to any GA adjustment at an agreed place under the York Antwerp Rules
- Incorporation and agreement of the New Jason and Both to Blame Collision clauses.
- Consequences of breach of contract or anticipatory breach
- Effect of frustration of the contract
- Choice of Jurisdiction and Law clause
CASE STUDY: Hong Kong Fir v NKK – chartered vessel’s alleged unseaworthiness & charterer’s right to withdraw from time charter.
- Voyage Charters (including GENCON C/P terms review) Statement of cargo type, weight and load max/min tolerance
- Freight revenue (gross or net) and whether in advance or on delivery + Deadfreight terms
- Agreement of Laytime period and Demurrage and Dispatch rates
- Date of Expected Readiness to Load and Canceling Date.
- Tender of Notice of Readiness (NOR) and terms for acceptance
- Starting the Laytime clock and agreed interruptions (e.g. weather, strikes, holidays, etc.)
- Statement of Facts for load and discharge port
- Calculation of Laytime and Demurrage or Dispatch
CASE STUDY: The Johanna Oldendorff – whether vessel anchored off a port was an ‘arrived ship’ such that the NOR tendered started the Laytime clock.
Time Charters (including NYPE C/P terms review)
- Vessel description, including Load Capacity, Speed and Fuel Consumption
- Charter period inclusive of Redelivery Underlap and Overlap provisions
- Payment of Hire in advance and right of withdrawal for non-payment
- Hire terms application of Currency, Escalator and Anti-Technicality Clauses
- Off-hire if full use of vessel is not available to Charterer and deduction from hire payment
- Employment clause entitling Charterer’s control within the agreed trading area
- Charterer’s entitlement to require the Master to sign B/L’s not be in conformance with C/P terms
- Charterer’s obligation to indemnify Shipowner against additional liabilities
- Charterer’s obligation to return vessel ‘in same good order…fair wear and tear excepted’
- On-hire and End-hire survey and bunker fuel measurement
CASE STUDY: Charterer’s ‘absolute’ obligation to provide bunkers as specified and Shipowner’s claim for engine damage due to provision of contaminated bunkers.
VOLUME CONTRACTS OF AFFREIGHTMENT (COA’S)
- Concept of ‘Industrial Chartering’ as a freight hedging tool
- Review of BIMCO’s VOLCOA standard form contract
- Carriage of a large cargo quantity under linked Voyage C/P’s
- Obligations and rights of the parties
CHARTER NEGOTIATION & ‘FIXING’
- Chartering process, market pricing and bargaining power.
- Intermediary role of the Chartering Broker, authority as ‘agent’ and their commission.
- Terminology including ‘Indication’, ‘Offers’, ‘Main Terms’, ‘Subjects’ and ‘Clean Fix’
- Use of BIMCO Standard C/P forms e.g. NYPE and GENCON
- Issues relating to ‘Rider Clauses’ and ‘Fixture Notes’
LAW AND PRACTICE OF BILLS OF LADING
- Three primary B/L functions
- Receipt for the cargo
- Evidence of carriage contract
- Document of title
- Three principal parties to B/L contract and impact of COGSA 1992
- Main B/L types and their use:
- ‘To Order’ B/L
- ‘ Straight’ B/L
- ‘Seaway’ B/L
- BIMCO standard form B/L’s, content review & comparison:
- CONGEN B/L 2016 (Dry Bulk)
- CONLINE B/L 2016 (Container)
- GENWAY B/L 2016 (Way bill)
BILL OF LADING PROBLEMS
- Shipper’s Letter of Indemnity (LOI) for issuing ‘Clean on Board’ B/L’s
- Shipper’s LOI for issuing Ante (Pre) and Post dated B/L’s
- Consignee’s LOI for collection without presentation of B/L
- Authority of ship’s agent to sign B/L’s on behalf of Master
- Identification of the contractual carrier and party liable for cargo claims.
CASE STUDY: The Nogar Marin – Master’s Charterparty obligation to sign clean on board B/L’s ‘as presented’ when steel cargo was rusty and damaged?
CARRIAGE OF GOODS BY SEA CONVENTIONS
- International cargo liability conventions:
- Hague Rules 1924
- Hague Visby Rules 1968
- Hamburg Rules 1978
- ‘Hybrid’ national law rules
- Rotterdam Rules 2008
- What Rules apply and when?
- Function of the B/L Clause Paramount
- Obligations and entitlements of the parties to the B/L
- Carriers’ exemptions from liability subject proof of due diligence to make vessel seaworthy
- Carriers’ HV Rules limitation of liability
- Cargo claims Time Bar and ‘stopping the clock’
MULTIMODAL AND THROUGH TRANSPORT CARRIAGE
- Containerization and advent of ‘door to door’ delivery
- Definitions and comparison of Unimodal, Multimodal and Through Transport
- Liner Trade – Multimodal B/L’s and the legal obligations of the ‘door to door’ single contracting carrier
- Example: MULTIDOC 2016
- Through B/L’s and the legal obligations of the ‘door to door’ contracting and subcontracting carriers
- Example: CONLINEBILL 2016
- Application of the Hague, Hague Visby and Hamburg Rules, together with the CMR, to exempt or limit carrier’s liability.
- Use of the Himalaya and/or Circular Indemnity Clauses to extend protection of the Rules to subcontractors
CASE STUDY: Container cargo damage scenario, onus of proof and application of B/L terms.
CARO, P&I AND HULL INSURANCE
- Application of the Marine Insurance Act 1906 and Insurance Act 2015
- Underlying insurance principles and definitions
- Cargo insurance policies: Cover provided by ICC Policies forms A, B and C
- Minimum cover required under INCOTERMS CIF sale and shipment
- Cargo underwriter’s subrogated recovery against a carrier and their P&I Club
- Shipowners’, Charterers’ and Traders’ P&I liability (P&I) insurance P&I Club Rules and the shipowners’ and charterers liabilities covered, inclusive of cargo damage and other losses.
- P&I exclusions from cover and warranties
- P&I recoveries against 3rd parties and contractors.
- P&I cover for unpaid cargo GA contributions
- Shipowners’ Hull and Machinery (H&M) insurance Cover provided by the ITCH 1983 Clauses, inclusive of Salvage, GA and Sue and Labour expenses.
- H&M exclusions from cover and warranties
- H&M recoveries against 3rd parties including cargo shipper interests and charterers.
CASE STUDY: MV Rena – container ship grounding resulting in pollution, cargo damage, salvage, GA and wreck removal.
JURISDICTION, LAW & DISPUTE RESOLUTION
- Choice of Jurisdiction and Law (J&L) clauses and incorporation into C/P and B/L contracts
- Issues of forum non conveniens to avoid agreed J&L clauses
- Resolution methodology review and comparison inclusive of: Negotiation
DISCUSSION: Factors impacting on choice of dispute resolution method and outcomes.
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