risk watch€¦ · as always, we welcome your feedback on our new initiatives and on any of the...

BRIDGE RESOURCE MANAGEMENT AVOIDING HUMAN ERROR

RISK WATCH

NEW LOSS PREVENTION STRATEGYBSAFE LAUNCH LONE WATCHKEEPING

JULY 2020

A NEW VISION

NEW PROACTIVE SAFETY CAMPAIGN

LATEST BSAFE POSTER

COMPETENCE MANAGEMENT SYSTEMS HOW THEY WORK

CLAIMS AND LEGAL IMPORTANT CASES DISCUSSED

RISK WATCH | JULY 2020

BRITANNIA’S MISSION IS TO BE THE FINEST P&I CLUB IN THE WORLD.

In these exceptional times of COVID-19, with many of us working in unfamiliarways, (both on shore and at sea) we are very pleased to be able to introduce anew vision of how the Club will approach loss prevention in the future. TheBritannia Loss Prevention team have conducted a fundamental review of alltheir activities and on page 4 you will find out more about how this will help usto provide the highest levels of service that our Members expect and deserve.There is a focus on navigation in this edition, with articles on Bridge ResourceManagement and passage planning, together with a case study analysing agrounding incident.

We are also very pleased to announce that our Exclusive Correspondent in theUSA, B Americas P&I LLC, opened for business (remotely!) on 30 March 2020. It is headed by Michael Unger, a leading maritime lawyer with extensivelitigation and arbitration experience, who has been known to the Club for manyyears. B Americas will boost Britannia’s global footprint, enhancing the Club’sability to provide a round-the-clock claims service to all its Members, whilealso focusing on the needs of Britannia’s North American Members. Mike kicksoff our Claims and Legal section with an article on safe port/berth warrantiesunder US law on page 13.

Also in this edition of Risk Watch, we launch the BSafe campaign, which isaimed specifically at seafarers on board our Members’ ships. The LossPrevention department, supported by the People Risks team, will be providinga variety of materials aimed specifically at seafarers, including case studiesand posters. Seafarers will be supported by our team of experienced maritimeprofessionals, with the aim of preventing onboard injuries and losses. Ourlatest BSafe poster focuses on lone watchkeeping and is included with thehard copy of this magazine. If you would like any additional copies, please letus know and we will send them to you.

As always, we welcome your feedback on our new initiatives and on any of theother topics covered in this latest edition of Risk Watch.

CLAIRE MyATTEditor

A MESSAGE FROM THE EDITOR

We hope you enjoy this copy of Risk Watch. We will be looking for ways to maintain andincrease the usefulness, relevance and general interest of the articles. If you have any ideas or comments please send them to: [email protected]

LOSS PREvENTION –A NEW vISION

more focussed loss prevention interventions.This is supported by the development of a moreanalytical and systematic methodology toenhance the efficiency and effectiveness of thedepartment’s activities.

Going forward, this will also include a greaterprioritisation of research-based activities, suchas causal analyses and initiatives, therebyaligning with two of the department’s keyaspirations of being:

INNOvATIvE, By EMBRACINg THE LATESTDEvELOPMENTS AND TECHNOLOgIES TOSUPPORT THE SERvICES PROvIDED; AND

PROACTIvE, By CONTINUALLy LOOKINg TOIDENTIFy ISSUES, TRENDS ANDDEvELOPMENTS TO HELP PREvENT LOSSES.

The ultimate aim is to provide a greater degreeof useful loss prevention information and todeliver enhanced value to Members in order tohelp prevent claims and losses.

Traditional loss prevention activities, such as theManagement Reviews carried out when newMembers enter the Association and conditionsurveys are conducted to assess the physicalcondition of Members’ ships remain a key part ofthe department’s activities, albeit with a morefocussed and systematic approach. Likewise, ourprogramme of loss prevention seminars,supplemented recently by our first ever webinar,will continue, with the aim of raising safetyawareness amongst our Members and theirseafarers by drawing on the Association’s ownclaims and loss prevention experience, as wellas the expertise of recognised professionalswithin the industry.

One key element of our mission is to provideinformative and credible information to ourMembers. In the coming months we will becontinuing to develop our range of lossprevention publications using our enhancedKnowledge Base area on the Britannia website(https://britanniapandi.com/knowledge/). We are also excited to be launching our new BSafeinitiative, as detailed on page 3 of this edition,further reflecting one of the aims of the revisedstrategy to increase our sharing of knowledge.

OUR vISION

RECOgNISED AS A CENTRE OFExCELLENCE, TRUSTED AS THEINDUSTRY’S PREFERRED PROvIDEROF P&I LOSS PREvENTION SERvICES.

OUR MISSION

TO PROvIDE INFORMATIvE ANDCREDIBLE ADvICE TO OUR MEMBERSAND STAKEHOLDERS, DELIvERED INTHE MOST EFFICIENT MANNER TOHELP PREvENT LOSSES, WHILESUPPORTINg SAFE AND EFFECTIvEOPERATIONS.

OUR LOSS PREvENTION DEPARTMENT HAS RECENTLY COMPLETED A COMPREHENSIvE STRATEgIC REvIEW IN ORDERTO OPTIMISE THE USE OF ITS RESOURCES AND ENHANCE THE SERvICE PROvIDED TO MEMBERS.

As part of Britannia’s ongoing commitment toprovide the highest level of service to ourMembers, our Loss Prevention department hasundertaken a fundamental review of its activities.This has resulted in a redefined strategic directionfor the department, with clear vision and missionstatements expressing our aspirations and generaloverall purpose for this key business function tobe recognised as a centre of excellence.

Central to this strategy is the adoption of a morerisk-based approach, which is intended to helpidentify areas of risk that would benefit from

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Our loss prevention presence in Asia is provided by LOSS PREVENTION MANAGER, jACOB DAMgAARD who has been based inBritannia’s Singapore Regional Hub since August2019. Jacob is an experienced dual-qualified Deck and Engineering Officer, with shoresideexperience as Designated Person and CompanySecurity officer for a fleet of container ships andpure car and truck carriers, as well as a Flag andPort State Inspector.

An additional LOSS PREVENTION MANAGER,SLAv OSTROWICKI, joined the Loss Prevention(Risk Insights & Analytics) team in February2020. Slav is a Master Mariner, with experienceon bulk carriers, container and general cargovessels, as well as in a number of shoresidevetting and auditing roles.

In March 2020, we also welcomed the arrival ofNICHA KANDASAMY in the new position ofLOSS PREVENTION ANALyST within LossPrevention (Risk Insights & Analytics) to helpdevelop our data analysis and visualisationcapability. Nicha has worked in a number ofanalytical roles evaluating business data usingvarious analytical software packages, and iscurrently studying for an MSc in BusinessIntelligence and Analytics.

The combined Loss Prevention department iswell placed to support our Members and internalstakeholders on a wide range of matters. Theteam offers experience and expertise covering the broad range of major ship types andoperations, as well as the nautical, engineeringand naval architecture professions. We are alsogrowing our analytical capability, aspiring to meetour stakeholders' needs more fully by exploitingthe use of data.

In a time of global uncertainty and unprecedentedchallenges, we are confident that our new risk-based and proactive approach to loss preventionpositions us perfectly to provide the highestlevel of service to our Members, both now and inthe future.

For more details please contact the BritanniaLoss Prevention team: [email protected]

One key change as part of the implementation of the strategy has been to refocus our Loss Preventiondepartment into two divisions in order to consolidate our activities:

LOSS PREvENTION (OPERATIONS) –RESPONSIBLE FOR MANAgINg THECONDITION SURvEy PROgRAMME, AS WELLAS LEADINg ON MANAgEMENT REvIEWS,LOSS PREvENTION SEMINARS ANDENHANCINg AND OPTIMISINg THE LOSSPREvENTION DEPARTMENT’S ENgAgEMENTWITH MEMBERS.

This division is headed by NEALE RODRIgUES,DIVISIONAL DIRECTOR, a Master Mariner withexperience on container, RoRo, bulk, tanker,reefer and multipurpose ships, as well asshoreside roles spanning marine surveying,quality assurance and ship management.

Supporting the work of the department is LOSS PREVENTION MANAGER SHAjED KHAN,a Master Mariner with experience on productand chemical tankers, general cargo and bulkcarriers, as well as working as a surveyorundertaking cargo, damage, warranty, heavy lift,quality and safety surveys.

LOSS PREVENTION ADMINISTRATOR ASHLEY BOYCE completes the team and isresponsible for managing the condition surveyprogramme. Ashley holds a BA (Hons) inBusiness Administration and has previouslyworked as a claims administrator in Britannia’sClaims and People Risk departments.

LOSS PREvENTION (RISK INSIGHTS & ANALYTICS) – RESPONSIBLE FOR LEADINgAND MANAgINg THE ANALyTICAL ANDRESEARCH-BASED ACTIvITIES SUPPORTINgTHE RISK-BASED APPROACH. THISINCLUDES LEADINg ON THE PREPARATIONOF PUBLICATIONS TO SHARE THEDEPARTMENT’S KNOWLEDgE AND INSIgHTS.

This division is led by gRAHAM WILSON,DIVISIONAL DIRECTOR, a Chartered NavalArchitect and former UK Flag State AccidentInvestigator and Maritime Risk andInvestigations Director for a major passengership operator, as well as a Senior Lecturer inmarine accident investigation.

2 | RISK WATCH | JULY 2020

SEAFARERS ARE A KEy ELEMENT OF A SUCCESSFULSHIPPINg INDUSTRy. AT BRITANNIA WE RECOgNISETHE DEMANDS AND PRESSURES ON THE MEN ANDWOMEN WHO WORK AROUND THE CLOCK AT SEA.

SAFE

WE ARE TRULy ExCITED ABOUT BSAFE.OUR AIM IS SIMPLE – TO HELP OURMEMBERS’ SEAFARERS TO BE HEALTHy; TO BE SECURE; TO BSAFE.

In the fast-changing modern world, with aseemingly constant stream of new emergingrisks and rapid advances in technology, the needto share information about best practices hasnever been greater.

At Britannia, we understand this. Which is whywe are excited and proud tto be launching ournew BSafe campaign soon..

PROACTIvEBSafe is a proactive safety campaign targeted atseafarers on board our Members’ ships.Developed by our Loss Prevention team, with thesupport of our People Risks department, the aimis to help influence behaviours and preventonboard injuries and losses.

The intention, from the outset, was to keep thecampaign dynamic and alive. We will be launchingnew material and initiatives as BSafe develops,with the clear aim of supporting seafarers.

INFORMATIvEBy sharing relevant information and developinginitiatives to support various aspects of onboardoperations, our mission is to help our Members’crew BSafe. Our aim is not only to provide ahome for all our crew-related content andmaterial, but to become recognised as one of the‘go-to’ sites for all such information, withrelevant, useful and practical content.

SUPPORTIvEBeing safe in its broadest sense is not just aboutonboard safety. It’s also about being healthy andsecure, elements which are both fundamental topeople’s wellbeing and efficiency. So rather thanjust focus on pure safety, we have identified threemain subjects to be covered under the BSafeumbrella: Onboard Safety; Seafarer Health;Onboard Security.

REFLECTIvEReflecting and learning from previous events iswidely acknowledged as an effective way ofpositively influencing behaviours. It’s aboutconsidering why something happened and thenrelating the identified learning points to your ownpersonal situation.

In addition to providing a variety of reflective-based content as the campaign evolves, eachmonth we will produce a new BSafe IncidentCase Study (BICS) available on our BSafewebpages. This will be based on a real accidentor claim, with the key lessons identified as astarting point.

you can read more about our first navigational-based BSafe case study on page 4, where theLoss Prevention department analyses agrounding incident. For each case study, we willalso be developing presentation material andreflective learning aids which can be used in anyway Members or their crew see fit. For example,these could be used to support onboard safetymeetings or crew seminars, or just for individualreflection on the issues raised.

EFFECTIvEWith our experience in loss prevention andmaritime safety, we are confident that BSafe willgrow and be a success. However, as with anycampaign, the true success will be measured bythe interaction and feedback that we receive –from our Members and, most importantly, theirseafarers. We have lots of ideas, but we are alsoopen to suggestions and comments, so pleasecontact the Britannia Loss Prevention team via:[email protected] to engage with us.

A NEW BRITANNIA INITIATIVE FOR SEAFARERS

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BRITANNIA BELIEvES IN THE IMPORTANCE OFANALySINg PAST INCIDENTS, LOOKINg AT WHATLESSONS CAN BE LEARNED IN ORDER TO TRy ANDPREvENT SUCH INCIDENTS HAPPENINg AgAIN. THEREARE MANy WAyS THAT THESE LESSONS CAN BESHARED WITH OUR MEMBERS AND CASE STUDIES AREALWAyS AN EFFECTIvE WAy OF REFLECTINg ONINCIDENTS, HIgHLIgHTINg THE ISSUES AND THENWORKINg THROUgH THE PRACTICAL LESSONS THATCAN BE LEARNED. AS PART OF OUR NEW BSAFECAMPAIgN THE LOSS PREvENTION DEPARTMENT WILLBE ISSUINg A NEW CASE STUDy BASED ON AN ACTUALINCIDENT. THIS WILL INCLUDE REFLECTIvE LEARNINgMATERIAL THAT CAN BE USED AS AN EDUCATIONALTOOL ON BOARD AND CAN ALSO POSSIBLy BEINCORPORATED INTO A MEMBER’S OWN SAFETyTRAININg PROgRAMME AS APPROPRIATE.

SAFE#1gROUNDINg

INCIDENT CASE STUDIES

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The first case study is based on a UK Marine Accident Investigation Branch(MAIB) investigation of an accident involving the general cargo vesselPRISCILLA. The vessel grounded at the Pentland Skerries off the OrkneyIslands Scotland at night while going from Klaipeda, Lithuania to Silloth,England. At the time of the grounding, there was only one person on thebridge of the PRISCILLA. During the watch, this sole officer had beendistracted by other non-navigational activities and did not notice that theship was drifting to the south of its planned track and was heading straighttowards the shallow waters of Pentland Skerries. It was only when a VHFwarning was received from the local VTS that the officer realised thedanger ahead. However, because he was not fully aware of the situation,he took the wrong decision and the ship ran aground.

This incident highlights several key issues about navigational safety andprovides some interesting and practical lessons that can be used tounderstand the risks associated with lone watchkeeping. The case studyalso looks at how navigational equipment should be used to help makedecisions in such circumstances and how it can help to maintain situationalawareness.

The full Case Study will be available in the new BSafe area of the Britanniawebsite: https://britanniapandi.com/

If you have any questions or would like further advice on the safe conduct of navigation, then please feel free to contact the Britannia LossPrevention team: [email protected]


© Crown copyright – MAIB Accident Report 12/2019.

LONE WATCHKEEPER WHAT TO LOOK OUT FOR

The latest in our series of BSafeposters accompanying thisedition focuses on the dangersof being alone on the bridge.This is only allowed in verylimited circumstances, forexample, in clear daylightconditions, and with anappropriate risk assessment in place. It is evident that lonewatchkeeping increases therisk of an incident occurring,by removing a second pair of eyes and by leaving thebridge unattended if thewatchkeeper becomesincapacitated.

WHAT IS A ‘PROPER’LOOKOUT? The main regulationscovering the need for alookout on a ship are TheInternational Regulationsfor Preventing Collisionsat Sea (COLREGs) andThe InternationalConvention and Codeon Standards ofTraining, Certificationand Watchkeeping forSeafarers (STCW).

RULE 5 OF THE COLREgS STATES THAT:

“Every vessel shall at all times maintain a proper look-out by sight and hearing as well asby all available means appropriate in theprevailing circumstances and conditions so asto make a full appraisal of the situation and ofthe risk of collision.”Chapter VIII of the STCW Code sets out thestandards for watchkeeping and the need for aproper lookout as per the COLREGS. Thelookout should maintain a continuous state ofvigilance in order to fully appraise the situationand the risk of dangers to safe navigation.

WHEN CAN YOU HAvE A LONE WATCHKEEPER?The composition of the navigation watch willvary according to a number of factors, details ofwhich are included in the STCW Code and

DESPITE THE AvAILABILITy OF INCREASINgLy SOPHISTICATED BRIDgE SySTEMS, NAvIgATIONAL INCIDENTSCONTINUE TO REMAIN AN AREA OF CONCERN AND, IN MANy CASES, THE CAUSES ARE RELATED TO WATCHKEEPINgISSUES. AS THE CASE STUDy IN THIS EDITION OF RISK WATCH HIgHLIgHTS, SUCH INCIDENTS ARE ALSO REgULARLyATTRIBUTED TO THE PRESENCE OF A SINgLE WATCHKEEPER ON THE BRIDgE

For more advice watch ourvideo: Bridge Operations –A Human Approach.Available on the Britanniawebsite.

guidance on these should always be included inthe ship’s Safety Management System (SMS)and in the master’s standing orders.

The STCW Code does allow for the officer of thewatch (OOW) to be the sole lookout duringdaylight under certain circumstances, but only ifthere has been an assessment that it is safe todo so. Factors to take into consideration include:

- STATE OF WEATHER- VISIBILITy- TRAFFIC DENSITy- PROxIMITy OF DANGERS TO NAVIGATION- WHEN NAVIGATING IN OR NEAR TRAFFIC

SEPARATION SCHEMES- FATIGUE AND REST PERIODS

However, the decision to reduce staffing levelsto just a lone watchkeeper needs to be takenwith care, and all the associated risks must beproperly assessed and documented.

THE ROLE OF BRIDgE ALARMS As required by Chapter V of the InternationalConvention for the Safety of Life at Sea (SOLAS),bridge navigation watch alarm systems (BNWAS)are intended to monitor the awareness of theOOW and provide regular alarms to alert adistracted lone OOW or to alert the master oranother qualified OOW automatically if theOOW becomes incapacitated. IMO ResolutionMSC.128(75) sets the performance standards forBNWAS. IMO Circular MSC.1/Circ.1474 in 2014provides further guidance relating to the automaticfunction of some systems, which the IMO agreedshould no longer be used on SOLAS ships.

A BNWAS provides a key safety barrier and it isessential that the system is working efficiently andeffectively to help prevent navigation accidentswhen a watchkeeper is alone on the bridge.

BUT IT IS IMPORTANT TO REMEMBER THAT A BRIDgE ALARM IS NO SUBSTITUTEFOR AN EFFECTIvE LOOKOUT.

For further information and advice, pleasecontact the Loss Prevention [email protected]

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Jacob [email protected]

IN THE MAY 2019 EDITION OF RISK WATCH, BRITANNIA DESCRIBED THE LEgAL CONSEqUENCESOF THE ADMIRALTY COURT’S DECISION IN THE CASE OF THE CMA CGM LIBRA gROUNDINg. THE COURT DECIDED THAT THE PASSAgE PLAN WAS DEFECTIvE AND THIS CAUSED THEgROUNDINg. FURTHERMORE, IT DECIDED THAT A DEFECTIvE PASSAgE PLAN RENDERS THESHIP UNSEAWORTHY, WHICH CONSEqUENTLY PREvENTS MEMBERS FROM RELYINg ON THENEgLIgENT NAvIgATION DEFENCE IN THE HAgUE/HAgUE-vISBY RULES. THIS jUDgEMENT WASSUBSEqUENTLY UPHELD BY THE COURT OF APPEAL IN MARCH 2020.

SAFE PASSAGE PLANNING:DETAILED GUIDANCE

A comprehensive passage plan has always beenan essential part of safe navigation, but thecourt judgement relating to the CMA CGM LIBRAgrounding really emphasises the importance ofthe passage plan and the consequences it mayhave for Members if the plan is defective or notfollowed. Preparing a passage plan that coversall aspects of safe navigation for the forthcomingvoyage is a substantial task, which requires asystematic approach to ensure that all relevantinformation is assessed and included. In order toassist our Members, the Loss PreventionDepartment has prepared guidance on passageplanning which sets out the best practices andprovides advice on:

● SOLAS requirements for passage planning

● Providing sufficient onboard nautical charts and publications

● How to keep nautical charts and publications updated

● Actual passage planning and minimum information to be gathered

● Audit and training

The guidance is intended to be used on board to assist the bridge team and it can also be usedto help ensure that Members’ own passageplanning procedures are appropriate and robust.

The full Guidance on Safe Passage Planning willbe available on the Britannia website in the nextfew weeks and in the meantime if you have anyquestions or would like further advice on safepassage planning, then please feel free tocontact the Britannia Loss Prevention team:[email protected]


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Slav Ostrowicki [email protected] Prevention, London

BRIDGERESOURCEMANAGEMENT (BRM)

MARITIME RESOURCE MANAgEMENT (MRM) IS A MARITIME INDUSTRy TRAININg PROgRAMME, AIMED ATPREvENTINg INCIDENTS CAUSED By HUMAN FACTORS.THE OBJECTIvE IS TO MOTIvATE THE TEAM TO CHANgE ITS BEHAvIOUR TO gOOD RESOURCE MANAgEMENTPRACTICES DURINg EvERyDAy OPERATIONS. MRM IS HUMAN FACTORS TRAININg, FOCUSINg ON NON-TECHNICAL SKILLS – ALSO CALLED SOFT SKILLS.

The genesis for this type of training was in theaviation sector, when it became clear thatdespite technological improvements, humanerrors in the cockpit were the leading cause ofsome of the deadliest air accidents. Theseaccidents were attributed to a failure to detectand stop a developing error chain, or a loss ofsituational awareness.

Since then, a number of industries have adoptedsimilar programmes. The maritime version calledBridge Resource Management (BRM) waslaunched in 1993. The programme evolvedthrough the years, to match industry challengessuch as the ever-increasing cultural diversity ofseafarers and the complexity of teaminteractions. In 2003 the programme wasrenamed Maritime Resource Management (MRM)to encourage participation of all target groupsincluding masters, deck officers, engineers,maritime pilots and shore-based personnel.Alongside BRM, Engine Room ResourceManagement (ERM) is the twin programmefocused on the engine room team.

The 2010 Manila Amendments to the InternationalConvention on Standards of Training, Certificationand Watchkeeping for Seafarers (STCW), fullyimplemented from 1 January 2017, introducedspecific requirements for officer training inbridge/engine resource management, leadership,teamwork and managerial skills.

In order to meet these requirements, individualsmust demonstrate their knowledge by havinghad approved BRM or ERM training, approved in-service experience, or approved simulatortraining. Many national administrations will onlyaccept an approved course for this purpose.

THIS LATIN SAyINgSUMMARIzES THESPIRIT OF WHATBRIDgE RESOURCEMANAgEMENT ISINTENDED TOPREvENT. ASHUMANS, WE ALL AREPRONE TO MAKEMISTAKES, WHICHUNFORTUNATELy ONOCCASION CAN LEADTO INCIDENTSUNLESS CAUgHT ANDCORRECTED IN TIME.

BRM AIMS TO REDUCE THIS RISK By HELPINgTHE BRIDgE TEAM TO FORESEE AND CORRECTLyRESPOND TO THEIR SHIP’S CHANgINgSITUATION AND THEREFORE PREvENT ANAvIgATIONAL INCIDENT FROM ARISINg.

Table A-II/1 of the STCW Code lists the following key principles of BRM:

● Allocation, assignment, and prioritization of resources

● Effective communication● Assertiveness and leadership● Obtaining and maintaining situational

awareness● Consideration of team experience


BRIDGE RESOURCE MANAGEMENT (BRM)

‘TO ERR ISHUMAN, BUTTO PERSISTIN ERROR ISDIABOLICAL’

Let us have a closer look at the critical elementsof BRM.

ALLOCATION OF RESOURCESThe key part of BRM is the ability to use allavailable resources effectively to make the bestpossible decisions. As an example, humanresources available on the bridge includelookouts, additional officers, marine pilots andeven vessel traffic system (VTS) officers.Technical/information resources include thepassage plan, charts, navigation equipment andradio etc.

To enable optimal decision-making, the resourcesneed to be available in good time and used totheir full potential. This can be achieved throughforesight and planning, for example by includingthe appropriate manning level and operationaltask responsibilities in the passage plan.

The passage plan and bridge procedures may notprovide a solution for every possible scenario ina changing environment. Good BRM skillsachieved through training and experience arealso required for the optimal assignment andprioritization of resources, in particular indynamic situations of increased complexity. Forexample, tasks should be continually delegatedbetween team members so that all relevantinformation is understood and communicated.

COMMUNICATION AND TEAMWORKAn essential component of good BRM requires the team to be able to work together andcommunicate effectively. Information should beunderstood, acknowledged and clarified if needed.The principles of BRM can and should extendbeyond the bridge, where the information flow iscritical for correct decision-making – for example,communication with tugs and mooring stations.

Closed-loop communication helps eliminateerrors and mistakes. When repeating orders toacknowledge them, good practice is to assess anorder to make sure that it makes sense. It is theduty of all officers and crew members to cross-check and cross-question.

Effective BRM requires assertiveness. PACE isone of the models that can be used to escalatelevels of intervention as part of the effectiveimplementation of BRM:

PROBE:“Do you know that…?”

ALERT:“Can we re-assess the situation…?”

CHALLENgE:“Please stop what you are doing while…”

EMERgENCy:“STOP what you are doing!”

It is also important to maintain the commononboard working language and standard marinephrases in team communications, for example byusing the IMO Standard Marine CommunicationPhrases (SMCP). This is particularly importantwhen communications are required with externalparties, such as marine pilots and tugs.

DECISION MAKINgGood team interactions and communication leadsto good decision making: it is essential to gatherrelevant and valid information before making adeliberate and purposeful decision.

It should always be clear who in the bridge teamhas the overall responsibility for the decisionmaking. However, it is equally important that allmembers of the team stay alert and actively followthe progress of the ship. If a team memberidentifies a potential error or a deviation from theagreed plan, he/she should not hesitate tochallenge in a timely manner and confirm that theresponsible officer is aware. BRM practices shouldinclude a means of verification to detect a slip ormemory error, e.g. cross-checking or callouts.

SITUATIONAL AWARENESSOn the bridge, situational awareness is critical for safe navigation and collision avoidance.Situational awareness can be succinctly and simplydefined as “knowing what is going on around us”(Flin et al, 2008). However, many casualtyinvestigation reports cite loss of situationalawareness as one of the contributory factors.

Ideally, every team member should have goodsituational awareness. On a busy bridge, it maybe necessary for the officer in charge to delegatetasks to team members to focus solely onnavigation, lookout, communication etc. In suchcases, team members need to communicateeffectively to share the “mental image” of thesituation. All relevant resources, includingnavigation equipment and external informationsuch as VTS, should receive appropriate attentionfrom the team to achieve situational awareness.

CHALLENgE AND RESPONSEAn appropriate “Challenge and Response” techniqueis at the core of good BRM. A meaningful challengeto any action or non-action should be respected andconsidered, regardless of who is challenging whom.

Another significant aspect influencing theeffectiveness of BRM is the “power distance”,which in the context of BRM can be described asa measure of how often subordinates are afraidto raise concerns or express disagreement.“Power distance” is strongly influenced bycultural background and it needs to be correctlymanaged in order to ensure that bridgecommunication is effective.

SUMMARyAlthough shipping is considered as one of the safest modes of transportation, casualtiescontinue to occur due to human error and poorleadership. Procedures do not replace softskills. Good BRM is not a one time trainingrequirement but a team skill, which should becontinually practised and rehearsed and, ofcourse, implemented.

REFERENCES:● STCW Convention and Code including 2010 Manila Amendments

(International Convention on Standards of Training, Certification and Watchkeeping for Seafarers)

● The Nautical Institute: The Navigator Feb/20 ‘Situational Awareness’● Maritime and Coastguard Agency ‘The Human Element - A Guide to

Human Behaviour in the Shipping Industry’● AMSA Marine Notice 11/2016 ‘Bridge Resource Management (BRM)

and Expected Actions of Bridge Teams in Australian Pilotage Waters’● AMSA Marine Notice 14/2017 ‘Fitness for Duty’ ● IMO Standard Marine Communication Phrases (SMCP)

website: ow.ly/oUqj30qFmMg● International Chamber of Shipping ‘Implementing an Effective

Safety Culture’● Flin R, O’Connor P, Crichton M. (2008), Safety at the Sharp End:

A Guide to Non-Technical Skills. Boca Raton, FL: CRC Press.

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Diagram reproduced courtesy of DNV-GL – ‘Competence ManagementSystems’ December 2019 edition.

Given the need to ensure the safe and efficientoperation of a ship in often demandingconditions, a competent, motivated crew andshoreside support team is essential. In themaritime industry, the concept of competency isenshrined in the International Convention onStandards of Training, Certification andWatchkeeping for Seafarers (STCW), 1978, asamended. Along with The 2010 ManilaAmendments to the Seafarers’ Training,Certification and Watchkeeping (STCW) Code,these define the agreed and well establishedinternational training and certification standardsfor seafarers.

With changing regulations and new requirements,combined with constant commercial pressuresand demands, the the need to demonstrate thecompetence of employees in the maritimeindustry has never been greater. This includesbeing able to prove a robust and auditable systemis in place, which defines competencerequirements for employees and can help ensurecompliance with future new requirements.

What is competence management?One means of achieving this is with the adoptionof a Competence Management System (CMS).Competence management is the process ofdefining, managing and developing employees’job-specific skills or competencies by identifyingthe key abilities required to improve performanceand achieve success. An effective CMS should beable to fill these gaps by implementing acontinuous process of skills development andimprovement.

WHAT IS COMPETENCE?COMPETENCE IS A COMMONLy USED TERM IN THE WORK ENvIRONMENT AND IS ‘THE ABILITy TOCARRy OUT A TASK TO AN EFFECTIvE STANDARD’. COMPETENCE IS TyPICALLy ASSOCIATED WITHA COMBINATION OF KNOWLEDgE, SKILL, UNDERSTANDINg AND PERHAPS, MOST IMPORTANTLy,ATTITUDE, IN ORDER TO UNDERTAKE A gIvEN ROLE SUCCESSFULLy. A COMBINATION OFExPERIENCE, TRAININg AND BOTH FORMAL AND INFORMAL LEARNINg ARE ALL FUNDAMENTAL TO THE DEvELOPMENT OF OUR LEvEL OF COMPETENCE.

COMPETENCEMANAgEMENTSySTEMS (CMS)


Other shore-based staff

Administrationof thecompetencemanagementsystem

Shore-basedpersonnelinvolved inmanagement of seafarerprovision

Competenceevaluation and continualimprovement ofseafarers

Othershore-basedstaff

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Requirements for competence managementIn addition to the specific competencyrequirements of the STCW Convention and Code,the International Safety Management (ISM) Codeeffectively requires that shipping companieshave a means of managing competence. As wellas stipulating the requirement for a structuredand documented Safety Management System(SMS), the ISM Code requires companies toensure that each of their ships is manned withqualified, certificated and medically fit seafarersin accordance with national and internationalrequirements. Furthermore, companies arerequired to establish and maintain proceduresfor identifying and providing any training whichmay be required in support of the SMS.In certain areas of the shipping industry,companies are encouraged to develop andassess their systems for managing competence.For example, the Oil Companies InternationalMarine Forum (OCIMF) Tanker Management SelfAssessment 3 (TMSA 3) program promotes acompetence management system as a tool forassessing and managing the recruitment,training and retention of both ship and shore-based personnel.

A means of managing competence should be anintegral part of shipping companies’ establishedSMS, and most major companies have existingmanning and crew management systems tohandle crew competence. However, while thesemay be effective, such systems are typicallystructured to satisfy the requirements of the ISMCode and STCW.

A dedicated and effective CMS can instead bedesigned to complement and enhance the coreSMS and to focus primarily on crew competenciesand associated training requirements. Whenimplemented and practiced effectively across thebusiness, both ashore and on board, CMS canprovide ship owners and managers with thenecessary tools to gauge the competence of their staff.

Several Classification Societies have developedCMS programmes, including DNV-GL, Rina, ABSand Lloyds Register, some of which are focussedon shipping companies. These programmes canoffer the attraction of a voluntary CMScertification scheme beyond the ISM Code andtherefore also provide the opportunity todifferentiate and position a company to a higherlevel of compliance and commitment. A numberof consultancy companies also work withshipping companies to help them gain theappropriate CMS accreditation.

By benchmarking CMS certification to anaccredited quality standard, this providesauthenticity and a strong credibility to humanresource management. Through a system ofannual internal audits by the management andexternal audits by the certification body,compliance to a high level can be demonstrated.

Capt. Jitender K [email protected]


What are the objectives of CMS?The ultimate goal of any CMS programme is tosupport the achievement of safe and efficientoperations across a fleet, however large or small.To work towards this goal, a CMS will help to:

- develop and maintain competence on board and ashore

- improve performance in terms of safety, environment and ship operations

- improve competence of individuals

How does a CMS programme work?The management start by creating statedbusiness goals and then setting out a plan forachieving these goals. The company monitors andevaluates staff performance to make sure that itfits in with their business goals. Inputs from fleetincident reports, near miss and other undesirableevent reports, audit reports and managementsafety meeting reports all provide signals toshore management on competence gaps andareas of concern.

The time frame for implementing a CMS willdepend on the size of the company and thequality of its existing staff management andtraining systems but could be between sixmonths and two years. The process starts with a gap analysis followed by recommendations onhow to improve existing procedures and thepossible adoption of new software-based crewmanagement systems.

The next step is to introduce theserecommendations to ships, allowing them to becomfortable with the extended staff evaluationsbefore starting the actual competencedevelopment plans. All such processes can besoftware-based using a centralised databasewhich can be produced as evidence during thecertification and future revalidation audits.

The CMS covers the whole process, fromrecruitment through to onboard performancemonitoring, including training both on board andashore. A variety of methods may be used in theCMS process, but the advantage is that they areall covered by a single robust system. If a shipmanager already has an established system, thepath to certification might be easier and can becompleted in a cost-effective manner with verylittle practical change in terms of manning andtraining costs.

What are the advantages of a CMS?Shipowners who have already implemented aCMS have reported experiencing a higher crewretention rate and found that they had animproved team of competent and loyal staff whowere able to carry out their tasks with a higherskill level. This in turn led to lower running costs,as planned maintenance programmes could bemore effective and down time was thereforereduced. Most importantly, the companiesreported fewer incidents, which in practical termsmeans less accidents, fewer injuries and reducedclaims – a message that everyone likes to hear.

We are grateful to Capt. Jitender K Seth ofMaritime Services Corporation (MSC) for hisassistance in preparing this article. MSC is aconsultancy service based in Toronto, Canadaand advises companies on how to adapt andimprove their crew management systems tocomply with CMS standards and then preparethem for certification.

www.maritimeservicescorp.ca

4.2(re-) definecompetence

needs

4.1Business

Goalsand KPIs

4.3Assesscurrent

competences

4.6Implement

closingof gaps

4.7Monitor,

review andassessresults

4.5Plan

closing of gaps

4.4Map

competencegaps

Diagram reproduced courtesyof DNV-GL – ‘CompetenceManagement Systems’December 2019 edition.

| 5

CLAIMS AND LEGALUS LAW – THE EFFECT OF A SAFE PORT/BERTH WARRANTY IN A CHARTERPARTY (The AThos I )

THE US SUPREME COURT HAS MADE ITS RULING IN THELONG RUNNING SAGA OF CITGO ASPHALT REFINING CO.(“CARCO”), ET AL. V. FRESCATI SHIPPING CO., LTD. ET AL.(“FRESCATI”) (THE ATHOS I) WHICH AROSE OUT OF ASIGNIFICANT OIL SPILL IN THE DELAWARE RIVER IN 2004.THE MAJORITY (7-2) UPHELD THE THIRD CIRCUIT COURTOF APPEALS DECISION THAT A PLAIN READING OF THESAFE PORT/BERTH CLAUSE IN THE ASBATANKVOYCHARTER FORM CREATES AN ABSOLUTE WARRANTY OFSAFETY RATHER THAN MERELY A DUTY OF DUE DILIGENCE.

It is important to note that the ship was the subject of twocharterparties. The first was a time charter from Frescati, asowner, to Star Tankers, a fleet operating entity, with Englishlaw and arbitration to apply and with a due diligence standardfor the safe port and berth clause. Star Tankers in turnvoyage chartered to CARCO under an amendedASBATANKVOY form which was subject to US law andjurisdiction, and under which CARCO warranted “The vesselshall load and discharge at any safe place or wharf… whichshall be designated and procured by the Charterer, providedthe vessel can proceed thereto, lie at, and depart therefromalways safely afloat.”

In addition to being the voyage charterer, CARCO was also theowner of the refinery the ship was approaching when its hullwas torn open by an anchor lying about 900 feet from theberth that had been lost/abandoned by an unknown vessel atthe bottom of a federally-maintained anchorage throughwhich the ship was transiting on the way to the berth. Anestimated 265,000 gallons of oil spilled into the riverimpacting over 280 miles of shoreline. The US Oil PollutionAct of 1990 required Frescati to fund the clean-up costs in thefirst instance (limited to USD45 million). The US FederalGovernment’s Oil Spill Liability Trust Fund reimbursed Frescati for an additional USD88 million in clean-up costs. Frescati and the US Government subsequently sued CARCO,alleging breaches of both the contractual safe berth clause inthe ASBATANKVOY charter party and of the maritime law dutyto properly maintain its berth and approaches. CARCO arguedthat it should not be responsible for the damages as it hadexercised due diligence to confirm the approach to the berthwas safe, pointing to the fact that the anchorage was federallymaintained and numerous ships had transited throughwithout incident. The case went through two trials, the resultsof which were appealed each time to the Third Circuit ofAppeals before the case was referred to the Supreme Court.

The issue before the Supreme Court was, “Whether underfederal maritime law a safe berth clause in a voyage chartercontract is a guarantee of a ship’s safety, as the Third Circuitand the Second Circuit have held, or a duty of due diligence,as the Fifth Circuit has held?”

In an opinion by Justice Sotomayor, joined by all but twodissenters (Alioto and Thomas, JJ), the Court appliedtraditional contract analysis principles adopted by the generalmaritime law and determined that no ambiguity existed in theASBATANKVOY language as to the agreement or intent of theparties. The Court reasoned that the use in the charterpartyof the words “shall… designate and procure” a “safe place orwharf” and “always safely afloat” created a strict contractualwarranty obligation upon the charterer as to the ship’s safety.The “due diligence” defence asserted by CARCO was rejectedon the basis that it is a tort concept that has no place in theanalysis as no such language was found anywhere in thecharterparty.

The majority also rejected the assertion that unless a “duediligence” limitation was read into the charterparty, acharterer would be “strictly liable” for damage caused bybreach of contract as contract law does not consider notionsof “fault.” Notably, the Court concluded that the parties couldeasily have agreed to limit or condition the charterer’s safeberth obligation if they had chosen to do so, pointing to othercharterparty forms which explicitly incorporate a duediligence limitation in their safe berth clauses. Charterersremain free to contract around unqualified language thatwould otherwise establish a warranty of safety, by expresslylimiting the extent of their obligations or liability.

A key underpinning of the Supreme Court’s decision wasadherence to the ruling of the Third Circuit Court of Appealsthat Frescati was a third party beneficiary of the “safe berth”warranty in the voyage charter between Star Tankers andCARCO to which it was not a party. This critical finding laid thefoundation for the rest of the analysis and appears to runcounter to English law which does not permit a ship owner toseek enforcement of a safe port/berth warranty directlyagainst a sub-charterer.

Mike [email protected]

| 13


THE NEED TO ENSURE THAT CHARTERPARTY TERMSARE BACK TO BACK (BILGENT SHIPPING PTE LTD VADM INTERNATIONAL SARL (The ALphA hARMony )QBD [2019] EWHC 2522 (COMM))

THE OWNERS OF THE ALPHA HARMONY LET THE SHIP TOHEAD CHARTERERS ON AN AMENDED NORGRAIN 1973CHARTERPARTY FORM (THE “heAd ChARTeR”) FOR TWOVOYAGES. HEAD CHARTERERS, IN TURN, VOYAGECHARTERED THE SHIP TO SUB-CHARTERERS ON ABALTIMORE FORM C BERTH GRAIN CHARTERPARTY (THE“suB-ChARTeR”) FOR A VOYAGE FROM BRAzIL TO CHINA.

The Head Charter, as it related to two voyages, contained twoseparate laycan periods, the second one of which ended on 31 May 2015. The Sub-Charter concerned only one laycan,which also ended on 31 May 2015. On 2 April 2015, Sub-Charterers narrowed the laycan down to a period between 1 to 10 May 2015 and Head Charterers did the same under theHead Charter.

At 07:04 on 10 May 2015 (which was a Sunday), the shiptendered its NOR by email stating that the ship had arrived at02:50 that day.

Both charters provided that the NOR was to be tenderedbetween 08:00 and 17:00 from Monday to Friday and 08:00 to11:00 on a Saturday. No provision was made for tendering theNOR on a Sunday. Under both charters, laytime was tocommence the following working day after tendering the NORat 08:00 provided that a “valid” NOR had been tendered.

Sub-Charterers cancelled the Sub-Charter at 20:47 on Sunday10 May 2015 and Head Charterers cancelled the Head Charterat 05:55 on Monday 11 May 2015.

The matters were referred to arbitration for it to be decidedwhether the cancellations were lawful or not. The key issuewas whether the NOR had been validly tendered during thehours permitted under the respective charters.

The arbitrators, in both references, decided that thecancellations were not valid. Both Sub-Charterers and HeadCharterers appealed to the Commercial Court.

Under the Sub-Charter, the relevant clauses were:

CLAUSE 14“Notification of the vessel's readiness to load at the loadingport must be delivered by mail/fax at the office of [Sub]Charterers or their agents, between 0800 hours and 1700hours from Monday to Friday, between 0800 hours and 1100hours on Saturday, Vessel also having been entered at theCustoms House. Laytime is to commence 0800 hours the nextworking day...”

CLAUSE 16“Should the Notice of Readiness at loading port not bedelivered as per Clause 14 by twelve o’clock noon on the 31stday of May 2015, the [Sub] Charterers or their Agents shall atsaid hour and at any time thereafter, but not later than thepresentation of Notice of Readiness together with the requiredcertificates at said office, have the option of cancelling thisCharter Party. [Sub] Charterers to narrow into ‘10’ days spreadlatest in 40 days advance prior to first layday.”

Sub-Charterers argued that clause 16 gave them an optionand, hence, the right to cancel the charter, if the NOR was notdelivered “as per Clause 14” i.e. by 11:00 on 9 May 2015.Clause 14 required the NOR to be delivered within certainhours during weekdays and on a Saturday. As the NOR wasnot delivered within those days and/or hours (it wasdelivered on Sunday at 07:04), Sub-Charterers argued thatthey had a right to cancel. Head Charterers, however, arguedthat only the parts of clause 14 which were not in “tension”with clause 16 would apply to the latter so that, despite thewording “as per Clause 14” found in clause 16, the officehours requirements should not be incorporated as these werein “tension” with the right to cancel if no NOR had beendelivered before 12:00 on Sunday 10 May. The Court preferredsub-Charterers’ view in that the words were to be given theirordinary and natural meaning to promote certainty. Thecancellation under the Sub- Charter was, therefore, lawful.

CLAIMS AND LEGAL | 15

Christine [email protected]

CONCLUSIONThis is a classic example of how different charters, containingdifferent clauses (or materially different wording), generatedifferent outcomes, leaving an intermediate charterer unableto pass any liability up (or down) the charter chain and,therefore, leaving it fully exposed to liability. It is, therefore, ofparamount importance that an intermediate charterer shouldensure that the wording of most (if not all) of the charterpartyclauses are materially the same in both charters so that, if adispute arises under one charter, this can be passed alongthe charterparty chain on a back-to-back basis.

The relevant clauses under the Head Charter were:

CLAUSE 4“Laytime for loading, if required by [Head] Charterers, not tocommence before 0001 on 01st day of April/May 2015. Shouldthe vessel’s notice of readiness not be tendered and acceptedas per Clause 17 before 2359 on the 30th/31st day ofApril/May of 2015, the [Head] Charterers or their Agents shallat any time thereafter, but not later than one hour after thenotice of readiness is tendered, have the option of cancellingthis Charterparty. [Head] Charterers to narrow Laycan into a10 days spread latest 30 days prior first Layday .”

CLAUSE 17“Notice of readiness…shall be delivered in writing or bycable/telex/email to [Head] Charterers/Receivers (or theirAgents). See Also Clause 70.”

CLAUSE 70“…the Notice of readiness to be tendered within office hours0800-1700 hours Monday to Friday and 0800-1100 hoursSaturday. Laytime to commence at 0800 hours the nextworking day after valid Notice of Readiness being tendered…”

Owners argued that clause 4 included an option to cancel ifthe NOR was not tendered as per clause 17 before 23:59 onthe cancelling date, i.e. 10 May 2015. There was norequirement under clause 17 to tender within office hoursand, as such, the right to cancel arose only if no NOR hadbeen tendered before 23:59 on 10 May. As the NOR wastendered at 07:04 on 10 May, there was no right to cancel.Head Charterers, on the other hand, argued that the words“See also Clause 70” in clause 17 had the effect ofincorporating the office hours into clause 17 and hence clause 4. This meant that as the NOR was tendered out ofoffice hours, the right to cancel arose at 23:59 on Sunday 10 May 2015. As NOR was tendered at 07:04 on 10 May 2015,there was no right to cancel and the court accepted thisargument. The cancellation under the Head Charter was,therefore, unlawful.

USUAL AND CUSTOMARY ROUTE The sAnTA IsABeLLA [2019]EWHC 3152 (COMM)


Denise [email protected]

DEVIATION FROM THE CONTRACTUAL ROUTE OF A VOYAGEIS A FUNDAMENTAL BREACH OF A CARRIAGE CONTRACTWHICH, IF PROVEN, CAN DEPRIVE A SHIP OF THEDEFENCES AND LIMITATION RIGHTS AFFORDED BY THEHAGUE VISBY RULES.

So when the SANTA ISABELLA, a bulk carrier carrying maizefrom Mexico’s Pacific Coast to South Africa, sailed via CapeHorn rather than through the Panama Canal, and arrived withdamaged cargo, the ship’s charterers asserted that the shiphad not taken the contractual route. They argued that theMaster should have taken the shortest and most direct routeto the discharge port via the Panama Canal.

In their defence the owners argued that sailing via Cape Hornwas a usual and contractually permitted route for this voyage.

The dispute was heard by the English Commercial Court.Although the court decided the dispute against the owners forother reasons, they held that the route taken by the ship wasa contractual one and that owners were not deprived of theirdefences under the Hague Visby Rules.

The court stated that if a charterparty does not stipulate theroute that should be taken, the ship is required to a take aroute that is both ‘usual’ and ‘reasonable’.

The ‘usual’ route is presumed to be the direct geographicalroute. That presumption can, however, be set aside byevidence that the ‘usual’ route is not the most direct one andmight even be much longer. The ‘usual’ route could changeover time and there could be more than one ‘usual’ routebetween two ports.

Factors in determining whether a route is ‘usual’ includenavigational and commercial reasons. It is not necessary toprove that a ‘usual’ route is uniform and universal in aparticular trade. It may be enough that one shipping line hasestablished that route as ‘usual’, and ‘usual’ may also beinferred from a charterer’s lack of objection to the route.

If the most direct sea track is not taken, the ship has to take areasonable route. The route has to be reasonable in theinterests of all parties concerned in the voyage, includingcharterers and shippers. A range of factors may be taken intoaccount including the nature of the cargo and commercialconsiderations. Weather conditions may be relevant butowners do not need to carry out a detailed analysis of theconditions that are likely to be faced in deciding on aparticular route.

STATEMENT AS TO CARGO CONDITION IN DRAFT BILL OF LADING (The TAI pRIZe ) [2020] EWHC COMM 127

| 9

CLAIMS AND LEGAL |17

THE ENGLISH HIGH COURT RECENTLY CONSIDEREDWHETHER A STATEMENT AS TO CARGO CONDITIONINCLUDED IN A DRAFT BILL OF LADING PRESENTED BYCHARTERERS / SHIPPERS AMOUNTED TO A WARRANTYGIVING RISE TO AN INDEMNITY IF IT WAS INACCURATE.

The TAI PRIZE loaded a cargo of soya beans for carriage fromSantos to Guangzhou. A bill of lading was signed by agents onbehalf of the ship’s master which stated that the cargo wasloaded ‘clean on board’ and ‘shipped… in apparent good orderand condition’. Following cargo discharge the cargo receiversalleged that the cargo had suffered heat and mould damage.The receivers brought a claim in the Chinese court againstthe ship’s owners and obtained judgment for USD 543,282.35.The judgment sum was paid by the owners, who then soughtan indemnity from the ship’s head charterers, who settledowners’ claim for USD 500,000. The head charterers thencommenced arbitration proceedings as disponent ownersagainst their sub-charterers seeking to recover the amountthat they had paid to the ship’s owners.

The arbitration tribunal found that the cargo had been loadedin a damaged condition which would not have been visible tothe master on loading, but that it would have been discoveredby the shipper upon a reasonable inspection. The tribunalruled that the cargo was, therefore, not in apparent goodorder and condition when shipped.

Accordingly, the tribunal decided in favour of the disponentowners on the grounds that the shipper was to be consideredthe charterers’ agent and that the charterers had impliedlywarranted the accuracy of any statement as to the conditionof the goods in the bill of lading presented to the master forsignature. In the tribunal’s view, it followed that thecharterers had impliedly agreed to indemnify the disponentowners for liabilities arising as a consequence of anyinaccuracy of such statement. The tribunal remarked thatotherwise the disponent owners would be left withoutrecourse for the “wrongs of the parties who were on[charterers’] side of the line”.

The charterers appealed to the High Court which allowed theappeal and disagreed with the tribunal’s reasoning. The courtheld that when a charterer (or shipper on its behalf) presentsa bill of lading for signature by the master that contains astatement as to the apparent condition of the goods, thecharterer or shipper is not itself making any representation,but instead is merely inviting the ship’s owner, by its agentthe master, to make a representation of fact as to theapparent condition of the goods on shipment.

The court further commented that this legal position was wellunderstood within the shipping trade, i.e. that the master neednot sign a clean bill of lading just because one was tenderedand that it was the master's task to verify the condition of thegoods before he signed. In this way the bill of lading could berelied on by the consignee and all subsequent holders of thebill of lading as reflecting the reasonable judgment of areasonably competent and observant master.

As the Hague Rules were incorporated into both the bill oflading and the charterparty, the distinctions contained withinthe Hague Rules regarding cargo description were alsoconsidered. Article III, Rule 3 of the Hague Rules states thatinformation regarding the type of cargo and quantity is to befurnished in writing by the shipper. On the other hand,representations as to the apparent condition of cargo uponshipment inserted on the face of the bill of lading (as requiredunder the Hague Rules) do not need to be provided in writing,or at all, by the shipper. The court’s view was that the duty ofassessing the cargo’s condition lay exclusively with the ship’sowner via the master. Accordingly, in the court’s view, a rightto an indemnity exists for incorrect cargo informationsupplied by the shipper, but not in relation to statementsregarding the apparent condition of the cargo: the master must make his own assessment regarding thecondition and amend the presented bill of lading as he sees fit.

The court did agree with the tribunal that, on the facts, themaster in this case had made a valid assessment of thecargo’s condition and that the damage upon loading was notreasonably visible upon inspection. Accordingly, the cargo hadbeen shipped in apparent good order and condition and thebill of lading was accurate as a matter of law. The courtcommented that the tribunal’s concern that disponent ownerscould be left without recourse for the actions of charterersand shippers was misplaced and that it had been open to thedisponent owners to defend the claim brought by the headowners on the same grounds as sub-charterers had done.However, the court did not consider the position of headowners in that situation, where they may be unable to defendproceedings brought in the Chinese Court based on the factthat ‘apparent good order and condition’ was a correctrepresentation to have entered on to the bill of lading, butwould not be able to recover from head charterers, despitethe master not being at fault.

Derek Birch [email protected]

TINDALL RILEY (BRITANNIA) LIMITEDRegis House, 45 King William Street,London EC4R 9ANUnited KingdomT: +44 (0) 20 7407 3588britanniapandi.com

MANAGERS: THE BRITANNIA STEAM SHIP INSURANCE ASSOCIATION LIMITED Registered Office: Regis House, 45 King William Street, London EC4R 9AN United Kingdom

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