North - Signals 38 - January 2000

Safe sailing into the new Millennium
Farewell to ‘Tugg’
Philippine crew claims survey
New rules for Tanzanian stowaways
Crew deserters – Canada raises the stakes
Group recommendations on carriage of calcium hypochlorite
California block stowage warning
The Woolf reforms and the London Admiralty Court
LMAA publishes procedural guidelines
Splitting bills of lading
Hot coal from Maputo – a warning
Stevedore damage claims in Algeria
Certificates for ships carrying dangerous goods
Concerns over ballast water exchange
Black boxes
Preservation of documents
The Mariner’s Guide to Marine Insurance
Bill of lading problems
Delivery without production of bills of lading
Claused mates’ receipts/ clean bills of lading-warning!!
Last poster in the SWAPP series issued
Louisiana – alcohol related offences
Training courses in P & I insurance and loss prevention – 2000
Reporting in Greece
Congratulations!
Signals Swot quiz winners
Distance Learning Course student Captain Cookson...
Signals Swot Quiz

Safe sailing into the new Millennium

The managers and staff of North of England P & I Association wish all readers of Signals a happy, safe and prosperous new year. As the Club moves into the new millennium, it is probably an appropriate time to reflect briefly upon where it has come from and where it is going.

North of England Iron Steamship Protection Association was established in Newcastle upon Tyne in 1860. Originally the Clubs did not cover cargo liabilities but, in 1874, at the urgent request of a number of prominent shipowners on the quayside at Newcastle, a marine underwriter by the name of J. Stanley Mitcalfe established what proved to be the first indemnity association on a mutual basis to cover various cargo liabilities. This first indemnity Club and North of England Protection Association were very closely connected from those early days and in 1886 the two associations amalgamated to form the first full P&I Club – North of England P&I Association – under the management of Stanley Mitcalfe and Ralph Carr.

In 1890 Mr Mitcalfe retired and made way for his nephew J. Stanley Todd. Mr Todd was instrumental in forming the Shipping Federation the same year and he also served as its first (unpaid) secretary.

In 1898 Mr Todd was approached by a local shipowner who was concerned at the increased premium being quoted by hull underwriters covering the risks excluded from the hull policy by the FC&S clause as a result of, according to Mr Todd in his book ‘Memories’, “…South American republics indulging in their bi-monthly revolution…” As a result of this meeting and further discussions with other shipowners, North of England Club formed a new class to cover war risks and became the first to offer this type of mutual insurance to British shipowners.

From those early pioneer days, North of England P&I Club continued to lead the way and to be at the forefront of innovation and change within the shipping and marine insurance industries.

Following the ‘claims explosion’ which shook the P&I world to its foundations in the late 1980s, and following a number of influential reports, a conclusion was reached that most of the claims were directly or indirectly caused by human errors of one form or another. It is a commonly held view within the industry that North of England P&I Association again led the way in responding to this problem by establishing the first dedicated loss prevention department within its organisation to provide a programme of education and training for its membership. This perception is not completely true – it all started a very long time before that! In 1878 Mr Mitcalfe was the author of the first North of England loss prevention guide – ‘Suggestions to Managing Owners and their Captains’.

In the preface to the third edition of ‘Suggestions…’, published in 1886, Mr Mitcalfe makes the following offer:

“…our Directors have resolved to offer Prizes of the aggregate value of £100 for the best papers written by Captains, Officers, or Marine Superintendents, of Steamers entered in this Association, on any of the following subjects, viz.:

The best means of reducing loss arising from improper navigation.

The best means of preventing claims for damage to cargo by alleged boiler heating.

The best means of preventing claims for short delivery, damage, pilferage, etc. of cargoes…”

We enter this new century with similar messages and goals: to do everything we can to reduce accidents and claims for the benefit of all. Safe sailing!

Farewell to ‘Tugg’

Members should already have received this year’s loss prevention calendar. North of England calendar has become one of the most popular calendars in the maritime world with its highly original and humorous cartoon illustrations. ‘Tugg’ Willson has been illustrating the calendar for the last eight years and his seagulls and rats have become talking points across the seven seas!

Unfortunately all good things must come to an end and it is with much sadness we must announce that this will be the last ‘Tugg’ illustrated calendar. The genius and very special character behind the illustrations is putting away his paints and brushes to enjoy a little of the good life in retirement.

It is with great sincerity and gratitude for bringing so much fun and laughter to such a serious subject that we wish ‘Tugg’ a very long, happy and healthy retirement.

Philippine crew claims survey

A questionnaire relating to the employment of Filipino seafarers was sent out with the July 1999 issue of Signals. The Association would like to thank all those who responded and also those who provided further comments based on their own particular experience.

Completed forms were received from 57 Members which employ Filipino seafarers. There was a broad range in the numbers employed by individual operators, extending from 1 to in excess of 3,000. Of the companies employing Filipino seafarers, 19 had a direct interest in the running of the manning agency used to employ the seafarers whereas the balance of 38 companies used the service of third party manning agencies. A special edition of Signals will be issued shortly which will focus on some of the criteria which can assist a Member in running or identifying a suitable manning agency.

As indicated in the questionnaire, there is general concern over the number and level of crew claims being lodged in respect of illnesses, many of which could have been detected by more thorough pre-employment medical examinations. This concern was echoed in the comments received from a number of Members. Further, many Members are already investing in enhanced pre-employment medical examinations as a loss prevention measure. The special edition of Signals will provide Members with recommendations to assist in identifying suitable clinics and choosing the most appropriate tests to be performed.

Recent developments connected with the employment of Filipino seafarers include the regulatory requirements of the latest STCW Convention, the revision of the POEA and the bilateral agreement between the Philippines and Panama relating to jurisdiction for crew claims. The special edition will also be reporting on the up-to-date status of these matters.

The assistance, advice and guidance of Members in this investigation is very much appreciated and extremely valuable.

New rules for Tanzanian stowaways

The Tanzanian immigration authorities have issued a new directive regarding the return of Tanzanian nationals to their homeland.

Previously, if a stowaway claimed to be Tanzanian, it was usually possible to obtain appropriate documentation from the local Tanzanian Consul with relative ease. Repatriation was generally still difficult however due to lack of co-operation at the port of disembarkation.

However, in order to ensure that a stowaway returned to Dar es Salaam is Tanzanian, the new directive requires a far more thorough check into the individual’s identity. The stowaway is now required to complete a questionnaire in Swahili, to be submitted along with a photograph and fingerprints. Relatives of the stowaway will then be approached for verification and, should the authorities remain uncertain, they may request that Members place an advert in a local Tanzanian newspaper inviting any additional information.

Further, if there are five or more stowaways due to be returned, it will be mandatory for the immigration officer(s) to vet them at the point of departure and all related costs to be borne by the shipowner.

Members wishing to see a copy of the questionnaire should contact Belinda Ward at the Association.

Crew deserters – Canada raises the stakes

Members may be aware that the Canadian authorities require a cash deposit for stowaways and ship deserters who escape into Canada. The standard levy is currently C$15,000 and is intended to cover administration costs and removal fees should the individual concerned eventually be found.

Recently however, the Port of Entry Management Enforcement Branch has announced that an immigration officer can vary the levy if he or she believes it to be appropriate. It may be, for example, that the illegal immigrant is considered aggressive or that related removal costs are anticipated to be particularly high.

The Association has experience of the required deposit being as much as C$20,000 per person, but there is apparently no upper limit on what an immigration officer may choose to impose. It is usually possible to request a partial reimbursement, but only some years later when the Canadian authorities are satisfied that they will not incur any additional expense.

Members are advised therefore to be particularly vigilant in Canadian waters, to prevent such occurrences, as costs can be substantial.

Group recommendations on carriage of calcium hypochlorite

Over the last two years there have been several large fires in cargo ships which have been linked to the carriage of calcium hypochlorite.

Rather than banning the carriage of this cargo by sea, particularly given the product’s importance in providing clean water in disaster struck areas, the International Group of P&I Clubs established a working group with the aim of pooling information and obtaining scientific views in respect of this particular commodity.

The product is an IMDG Class 5.1 substance, manufactured in both high and low strengths. It reacts violently when contaminated by an organic material generating heat and oxygen which will fuel any resulting fire. Such impurities can be introduced by way of insufficient or damaged packing material or alternatively as a result of poor manufacturing standards.

The product is also self-reactive and sensitive to high temperatures, the sensitivity increasing as the package size increases. Recent research on hydrated HCH (UN 2880) indicates that a violent reaction can occur at temperatures that are encountered by ships transiting tropical areas. Although the IMDG Code today allows this particular product to be shipped below deck but "away from sources of heat where temperatures in excess of 55°C for a period of 24 hours or more will be encountered", results from the investigation into the thermal properties of hydrated HCH UN 2880 have led the International Group to the conclusion that this provision is inadequate.

The Group has therefore requested the IMO to review all entries in the IMDG Code concerning the requirements for transportation of all forms of calcium hypochlorite. There will be an obvious delay in the IMO adopting such recommendations and in the interim the International Group of P&I Clubs has decided to issue its own recommendations to enable the continued shipping of the product in a way that is hoped will lessen the risk to the ship and shipboard personnel.

The recommendations are as follows:

Cargoes of calcium hypochlorite classified as UN 3748, 2208 and 2880 should be carried on deck only, out of direct sunlight and clear of living quarters.
Cargoes of calcium hypochlorite classified as UN 3748, 2208 and 2880 should be packed in clean drums not exceeding 45 kg net weight. Calcium hypochlorite should never be packed for marine transportation in sacks or in bags.
On those voyages for which prolonged mean air temperatures can be anticipated to reach 35°C, additional measures for limiting temperatures within freight containers carrying calcium hypochlorite, classified as UN 3748 and UN 2880, should be adopted, for example by ventilation or mechanical cooling, alternatively the total weight of calcium hypochlorite should be limited to 14 tonnes per freight container.
Cargoes of calcium hypochlorite classified as UN 3748, 2208 and 2880 should not be carried in freight containers larger than 20ft.
It has been reported that some manufactured hydrated HCH contains water in excess of 10% which takes the product out of the specification for calcium hypochlorite hydrated UN 2880. This has resulted in the product being declared as UN 1479 (oxidising solid N.O.S), which has less onerous provisions for carriage. Research has shown that increased water content lowers the thermal stability of the product. It is recommended that calcium hypochlorite declared as UN 1479 should be subject to the same transport requirements as UN 2880.

California block stowage warning

Further to an article on California block stowage for steel cargo in the October 1996 issue of Signals, shipowners are once again coming under pressure to agree to this method of stowage.

The system involves loading steel slabs in stacks interlinked with square timber and securing only the top tiers. Whereas this method may be acceptable for ships with box-shaped holds, on a normal bulk carrier where the hold side plating slopes there may be an unacceptable risk of cargo shift that poses a serious threat not only to the safety of the cargo but also to the ship itself. Thomas on Stowage, arguably one of the leading authorities on the carriage of cargo, states that such stowage in a normal type of bulk carrier is not acceptable as it is a potential danger to both the ship and the crew.

In a recent case of a bulk carrier loading steel slabs in Italy using the California block stow method, the cargo in all five holds collapsed three days after sailing when the ship was in force 6-7 seas and a heavy swell. This caused a list and the ship had to go to a port of refuge so that the cargo could be restowed and resecured.

The reason why California block stowage is attractive to charterers is that it saves costs at loading and discharging. Given the concerns regarding the safety of the method, it seems that the cost saving argument is not a good enough reason to put the cargo, the ship and the crew at risk.

Readers who require more information on California block stowage are referred to the previous article, or are requested to contact the Association. Anyone with first hand experience of this method of stowage is encouraged to write to the editor of Signals in order that the experience can be shared.

The Woolf reforms and the London Admiralty Court

The English court system was radically overhauled in April 1999 by the “Woolf Reforms”, which were designed to make court procedures more efficient and easier to understand. The Woolf reforms had little immediate effect upon the Admiralty and Commercial Court because procedures there already reflected the specialism and expertise of the court users – clients, lawyers and experts.

In many ways the Woolf reforms simply apply the ‘best practice’ of the Admiralty Court to the non-specialised courts. However, the ‘Admiralty Court Practice Directions’ have recently been re-issued and they include several significant developments.

The Practice Directions and the new admiralty forms can be found on the website www.courtservice.gov.uk/forms/ fmenu_admcrt.htm
All pre-Woolf cases in which there have been no applications during the last year will be automatically stayed on 25 April 2000.
From 14 October 1999, anyone can search the Admiralty Registry for ‘in-rem’ writs, which have been issued but not served. This is particularly valuable for ship-buyers and sellers.
At the request of any party, the claimants and the defendants of in-rem proceedings must now provide their full names. This requirement may be difficult for owners or insurers of multiple cargoes (e.g. on container ships) or in cases where title to sue is an issue.
In collision actions, the preliminary act must contain a statement verifying the truth of the facts and allegations contained in the pleadings and a plot of each ship’s track. Good, early witness evidence is as important as ever.
There is doubt if ‘part 36 offers’ apply to collision actions. These offers to settle can be made by claimants or by defendants, before or after legal proceedings have started. The Admiralty Judge thinks that ‘part 36 offers’ may not apply whenever there is a division of liability but some lawyers disagree. Time will tell.
The Admiralty Judge also thinks that alternative dispute resolution is not appropriate to collision actions. Again, some lawyers disagree. If the only issue is the division of liability, then mediation may be a good way of reaching agreement and the court may order the parties to have a go, just as they do in other courts.

The changes are mostly on points of detail but they will affect the handling of every case. As always, prevention is better than the cure and Members are advised to pay more attention to bridge procedures than to court procedures.

Thanks are extended to Eamon Moloney of Eversheds for this article.

LMAA publishes procedural guidelines

The London Maritime Arbitrators’Association (LMAA) has recently published guidelines on procedures in its arbitrations.

LMAA arbitrations are conducted in accordance with the LMAA terms upon which arbitrators accept appointments from the parties. The procedural guidelines are not intended to alter the current terms, but merely give guidance to users as to how arbitrators intend to use various powers given to them by law. In particular, the LMAA is keen to reduce correspondence generated by applications to the tribunal on procedural issues prior to the actual hearing.

The guidelines have also been drafted to take into account recent changes to High Court practice introduced by the “Woolf Reforms”. The principal features of the procedural guidelines are as follows:

A timetable for the exchange of submissions including supporting documentation.The tribunal may now require a “Statement of Truth” verifying the truth of the facts and allegations contained in the pleadings to be given by the appropriate representative of one of the parties to confirm the accuracy of a submission or to explain why a particular document or class of document cannot be produced.
Simple denials in claim submissions will no longer be permitted. The parties will need to explain in writing whey they disagree with a particular point or issue.
The parties must attempt to agree any procedural matter before approaching the tribunal for an order for directions.
The tribunal may penalise a party in costs where, in the opinion of the tribunal, unnecessary costs have been incurred. Costs orders may be awarded at any time during the proceedings.

Copies of the new procedural guidelines may be obtained from the FD&D Department of the Association or the LMAA. Members with particular queries on the guidelines should feel free to contact the FD&D Department.

Splitting bills of lading

he Association has recently seen a rise in the number of queries received from Members on their obligations to allow a splitting of bills of lading when requested to do so by charterers or shippers.

Provided that the full set of all original bills of lading issued at the load port are surrendered to the owner prior to the issue and release of “split” original bills, and provided that all the information and descriptions (save for quantity) are identical to that of the original bill, it may be agreed to split bills of lading. However it is strongly recommended that this only be agreed upon receipt of an express letter of indemnity from charterers.

Should any changes to the description or information to be inserted on the split bills of lading be requested, then caution should be exercised by the owner prior to agreeing. For example, if the new bill of lading is to state a different port of loading, or if a different date of loading is requested the owner must refuse the request.

If the owner is asked to change the identity of the shipper, a full explanation as to why the change is required should be obtained before agreeing. If the change is required for the purpose of committing some fraudulent act (for example avoiding import or export quotas or avoiding taxation), the owner may incur additional liability and may be unable to recover against any indemnity given in the circumstances.

Hot coal from Maputo – a warning

The Association has recently been involved with two very similar cases of hot coal having been loaded onto ships at the Matola coal terminal in Maputo. In both cases, the temperature of the coal rose rapidly once loading operations were completed (in spite of loading having been carefully monitored) with the consequent build-up of dangerous gases. Both the ships in question had to deviate to ports of refuge, in order to allow experts to go onboard and monitor the rising temperatures and build-up of dangerous gases.

The Association has also sent experts to the Matola coal terminal, where it was discovered that a number of the stock piles of coal at the terminal (which are stored in the open) are smouldering and/or openly ablaze. Members are therefore urged to be extra vigilant, and to have experts instructed to assist their ships during loading operations, in the event that they fix their ships to load at the Matola coal terminal. On a more general note, Members should obviously also ensure that their crews are familiar with the coal entry in IMO’s Code of Safe Practice for Solid Bulk Cargoes (BC Code), and that they are also familiar with the use of the appropriate instruments for measuring the various gases and temperature in the cargo holds. To this end, the Association would refer Members to the various circulars from the International Group and the Association on the carriage of coal.

Stevedore damage claims in Algeria

In many cases where a ship is damaged during loading or discharging whilst under chartered employment the charterers themselves may be liable to owners for that damage. There are however occasions when charterers will not be liable and a claim can only be pursued against the stevedores who actually did the damage. Unfortunately though in some jurisdictions this is difficult to achieve.

The Association has just received welcome news from Algeria that it does now appear possible there to pursue stevedores for damage done. The Algerian Supreme Court has recently confirmed for the first time, in a case dating back to 1991, that stevedores can indeed be held liable.

The Association is grateful to Maitre Omar Khelifa for news of this decision.

Certificates for ships carrying dangerous goods

In a recent case, proceedings were taken against a bulk carrier discharging in Argentina for a breach of local regulations. The ship had a cargo of coal, loaded in Australia, but did not have a Document of Compliance showing that the cargo spaces were suitable for the carriage of dangerous goods.

Members should be aware that a Document of Compliance is required under the SOLAS regulations, Chapter II-2, Regulation 54.3, for a ship that intends to carry dangerous goods, either in packaged or bulk form, which are listed or classified in the IMDG Code. The Document provides evidence that the construction and equipment of cargo spaces comply with SOLAS requirements and is issued by the administration of a Flag State.

Local enforcement of the SOLAS requirements may vary. For example, ships visiting ports in the United Kingdom may have to produce a Document of Compliance before loading, or discharging, dangerous goods.

Members needing further information should contact Mark Robinson or Tony Baker at the Association.

Concerns over ballast water exchange

Following the article on ballast water exchange which appeared in the last issue of Signals, Mr Hans Schrijver of Member Vroon BV has highlighted some very relevant concerns on this issue.

“After reading your excellent magazine, which keeps us all sharp and aware, I came to the article on ballast water management which has raised some eyebrows to say the least.

The article summarised the problems involved when implementing the newly introduced guidelines. Specifically, the “flow-through” method advocated in the article does not seem to be risk free and should be handled with the utmost care. Although the author warns that the tank must not be over pressurised, I feel that the risk of cargo damage when using this method with a loaded, or partly loaded, ship is considerable.

One has to realise that to replenish the tank with at least three times its volume means that the ballast pump will run for many hours. This will keep the tank under pressure long enough to cause severe water damage to the cargo should an air vent line in the holds fail.

Personally I would not like to recommend this method since fate will always let these incidents happen in the middle of the night when crews are under time pressure.

I would appreciate your views on this matter.”

The Association shares these concerns. The “flow-through” method does have disadvantages, particularly if one or more of the vent lines are obstructed, leading to the over pressurisation mentioned. The “replacement” method also has obvious disadvantages when the effects of free surface on stability, and sloshing water on the ship’s structure, are considered in a dynamic environment.

Although many flag states have instituted their own regulations that require the compulsory replacement of ballast water, the IMO has still only issued guidelines. The subject is still being reviewed by the IMO and the classification societies but there may be problems where requirements based on the environmental interests of a particular country conflict with ship safety.

The responsibility as to whether to exchange ballast at sea is the master’s. Among the factors the master should take into account are the limits of structural strength and stability of the ship, the sea and weather conditions prevailing at the time, and the time required to complete the ballast exchange operation.

Our recommendation is that the ship operators should develop a procedure for ballast water exchange with the help and approval of their classification society. This should form the basis of a ballast water management plan as recommended by the IMO, which must also state the circumstances under which ballast water exchange is not to be carried out, and so help the master when making a difficult decision.

Black boxes

In the last issue of Signals, comments were invited on the concept of installing ship data recorders (VDR) or ‘black boxes’. There would appear to be some widely differing views held within the industry - as illustrated in the following two communications.

The first is a copy of a response from Patrick Harrison of Stirling Shipmanagement. It was originally sent to Lloyd’s List in response to an article which had appeared on the subject by Rear Admiral Lang, who heads the UK Marine Accident Investigation Branch (MAIB) and advocates VDRs on all ships over 100 GT.

First I declare my interest as being a manager of small ships. I am writing this letter as an individual and the contents do not necessarily reflect those of the company. Further to reading the article concerning Rear Admiral Lang’s pleas. With due respect to the gentleman I wondered how the fitting of data recorders will really make marine transport safer, as quoted by him. As far as I am aware it just records data. It doesn’t assist with the navigation, trim and stability etc of the ship.
I believe his logic is more that the recorders would assist him in his role as an investigator and from that having more information to hand he would be better informed as to the circumstances of incident. He would then be able to provide ‘improved’ recommendations in order that such an incident would not occur again which in turn, I agree, would eventually improve the safety of marine transport. But wouldn’t it be better to spend the £50,000 on prevention?
Let’s say the price does reduce to £25,000 there will still be maintenance and survey costs (as I presume it will be a survey item). So there will be an annual cost as well as an initial capital cost. We currently manage 14 ships. The capital cost across the fleet therefore would be £350,000 plus say £14,000 p.a. Personally, I would prefer to be able to spend such sums on other forms of safety. More preventative forms of safety such as training etc.

The second letter was received from a serving ship master– Captain Jayant Roy, who is master with the Shipping Corporation of India.

This is in reference to the paragraph on black boxes, published in the current issue of Signals. Placement of VDR on board ships is an excellent proposal and that actual trials have commenced is indeed a great step further in safety management and future analysis of disasters.
You have asked for a view on the above as such,

I would like to suggest the following.

The proposed VDR should be slightly modified from that of the ones carried on board aircraft.
Regarding theagency responsible for the recovery of VDR. The VDR need not necessarily be required, to be recovered. Let it float free from the ship on encountering a disaster, and then let it transmit all the data via satellite (INMARSAT). This would be almost similar to the EPIRB.
All the input from the various equipment can be processed and sent, via a self sealing weak link cable, to the VDR mounted on the Monkey island, or on the bridge wings. Also, since fire is as great a cause for final abandoning of ships, may I suggest in addition to the float free buoyancy material covering the VDR, that it should also be encased in a non combustible material. Thus if the ship has to be abandoned due to fire and that the ship becomes a burnt hulk without sinking the VDR can still be recovered from the ship. I had initially thought of an additional release mechanism involving heat sensors, but then this may be triggered off due to excessive heat in the tropics/ malfunction of the sensors.
Another feature if added may be useful to the Master, though some may not agree to the same, is why not have a display on board for the VDR, This the Master may view after passages in congested water and otherwise when he is not on the bridge. This will result in the duty officer being more alert and also to take the correct action in case necessary. The Master may advise in case of any incorrect action.
This is quite necessary, since I have frequently found ships even large ships failing to comply or if complying then at a very late stage; especially when avoiding other ships, – too much reliance on the ARPA I guess. This I am sure will somewhat reduce the chances of any disaster.
I hope that the VDR does become a mandatory fixture on ships, and earlier the better.
I am a master for the past 10 years and I find that training has not kept pace with the times. Young men coming out to sea now require an increased period of training, however it is observed that the actual period of training has decreased. Technology has overtaken the seafarer, yet disaster management or contingency training for any system failure has not been taken into account.

Clearly this is an extremely important potential development and the editor would encourage other readers to share their views on the installation of ‘black boxes’ on ships.

Preservation of documents

The Association recently received a request from a Member for guidance on what documents it needs to preserve and for how long.

The strong recommendation from the Association is that all documentation should be preserved for at least six years. This not only includes obvious documents such as log books and reports but also

such things as engine room and bridge movement books and other rough logs.

The Association has been involved in a number of incidents in recent years where sea staff have destroyed ‘informal’ documents such as movement books - believing them to be of no legal value - whereas in fact they were crucial pieces of evidence and their non-availability meant that the ability to defend Members was seriously impaired.

The Mariner’s Guide to Marine Insurance

The Mariner’s Guide to Marine Insurance – published by the Nautical Institute and written by Phil Anderson – was sent out to Members and their ships with the October 1999 issue of Signals. A Signals reader, who wishes to remain anonymous, has carried out a careful review of the book and has made some valuable and interesting observations in the following letter.

I am writing to express some reservations concerning the new publication. I will not comment on the loss prevention aspects, but solely on the marine insurance background. The points are not made in any particular order.

1. On page 14 is quoted section 23 of the Marine Insurance Act, 1906 with a list of the five things which a marine policy must specify. In fact, the last four of these were repealed by the Finance Act, 1959 (although the unrepealed section 26(1) does require that one of them, the subject-matter, is designated with reasonable certainty).

2. On pages 10/11, it is stated that cargo insurance underwritten in London “is likely to be covered under one of three versions of The Institute Cargo Clauses – all risks, free of particular average (FPA) or without average (WA)”. In fact, all three of these sets of clauses were superseded as long ago as 1982 by completely redrafted clauses “A”, “B” and “C”. Though it is not impossible to find risks still written under the old regime, I am given to understand that the proportion of cargo business still written on this basis is “negligible”.

3. Still on the cargo clauses, incidentally, “WA” stood for “with average”, and special clauses were required to incorporate war risks (which were excluded by an F.C.& S. clause) and strikes risks.

The FPA clauses covered damage as a result of contact with any other substance other than water (ice included) as well as the fire, explosion or collision mentioned in the text. Stranded, sinking or burning would “open” the FPA warranty to allow damage from other S.G. Form perils to be recovered. The stranding, sinking or burning did not have to be the cause of the loss.

4. There are some misleading typographical errors. Notably, the fourth line of the first paragraph of page 6, for example, might be read as suggesting that freight is “virtually uninsurable”, which might lead one to wonder what is the purpose of the Institute Freight Clauses. The omission of the line, “In particular there is a marine adventure where” from section 3(2) of the Marine Insurance Act on page 12 renders the text meaningless. The “due diligence” proviso, of course, refers to the whole of the “Inchmaree” perils, and not only barratry, etc., (as implied by the text of 6.2.5 on page 16).

5. It is stated on page 14, that “one of the fundamental principles of all marine insurance is that the shipowner must always act as “a prudent uninsured”. This is not correct, and the history of marine insurance, and insurance generally, is littered with examples of the courts giving short shrift to any such contention. Indeed, it is difficult to understand why such a belief should be so widely held when it is obvious that few, if any, prudent owners would operate ships at all if they were uninsured.

6. There are other misleading statements; in particular the implication that “imminent danger” is required before there can be a general average act. (Page 18, 5th line up from bottom). Suffice to say, in this connection, that Mr Justice Roche said in the case of the “Makis”, 31L1.L.R.313, (Underlining added).

“It is not necessary that the ship should be actually in the grip or even nearly in the grip of the disaster that may arise from a danger. It would be a very bad thing if ship masters had to wait until that state of things arose in order to justify them doing an act which would be a General Average act. That is all I think which need be said with regard to that matter, unless I add this: that ‘Peril’, which means the same thing as danger, is the word used in the General Rule (A), just as it is the word used in The Marine Insurance Act, Section 66, The word is not ‘Immediate peril or danger’. It is sufficient to say that the ship must be in danger, or that the act must be done in order to preserve her from peril”.

I hope these comments are of assistance to you.

Editor’s response

The Editor, who is also the author of the Mariner’s Guide to Marine Insurance, although having acted in that capacity outside of his employment with North of England P & I, is grateful to the contributor for his clarification on the points he raises in his letter.

The Author is happy to concede and gratefully accepts the points raised in items 1, 2 and 3 of the contributor’s letter. As far as the omission mentioned in item 4 is concerned, on checking, it is clear that the missing phrase was in the original manuscript submitted to the printers but was lost at some stage and not picked up on the final proof read. As far as the point made in item 5 is concerned the author would only comment that, as a day-to-day rule of thumb approach, the idea of a shipowner acting as ‘a prudent uninsured’ is a perfectly sound philosophy. The point made in item 6 is, it is suggested, probably one of semantics: in using the expression ‘imminent danger’ the author was not intending to convey ‘immediacy’ but rather an event that was likely to happen as opposed to a more remote threat.

Generally it should be emphasised, as is stated in the first line of the preface of the book, and repeated elsewhere, that “this book is not intended to provide a technical or legal perspective of marine insurance… it is intended as a practical guide for ship masters and officers on the different types of insurance’s which they may come across during the course of their work”.

Bill of lading problems

The Association is approached on an almost daily basis by Members which advise that charterers or cargo receivers are either asking for the ship to deliver the cargo at a port different to that stated in the bill of lading or to deliver the cargo without production of the bill of lading – often the request involves both issues.

The advice from the Club will invariably be the same; to refer Members to Rule (19)(17)(D) and to point out that not only would the Member expose itself to breaking the contract of carriage but also, potentially prejudicing its P & I cover in respect of the possible consequences.

The advice from the Club would also usually draw the attention of the Member to the suggested letters of undertaking which appear in the Rule to cover these circumstances if the Member decides, for commercial reasons, to accede to the requests. Such guarantees should be countersigned by a first-class bank.

What is sometimes not always fully understood by Members, and a fact which is extremely important, is that such letters of guarantee should be considered as replacing the lost P & I cover rather than some sort of additional security.

There are some lawyers who have argued that, in certain circumstances, such letters of guarantee – even if countersigned by a first-class bank – may be unenforceable in a court of law.

In difficult market conditions the pressure upon shipowners to comply with such ‘requests’ can be enormous. However, the risks and potential consequences should never be lost sight of. The two accompanying articles outline some of the important issues involved.

Delivery without production of bills of lading

Owners are frequently torn between commercial pressures and legal prudence in deciding whether to deliver cargo without production of the bill of lading.

If owners do deliver without production of the original bill, they may be liable for misdelivery, in one or both of the following ways:

(a) Breach of the contract of carriage.

(b) Liability in tort for “conversion”. If owners deliver cargo to X, who is not its rightful possessor, then they have “converted” it. They are liable to the cargo’s rightful possessor, Y, even though they were not aware of Y’s rights, and reasonably believed that X was entitled to possess the cargo.

The basic obligation on owners is to deliver cargo to the holder of the original bill of lading upon production of the bill of lading, which generally safeguards against misdelivery claims. However, if owners suspect that the holder of the bill is not the rightful possessor of the cargo (for instance, if the bill was obtained through fraud) or if there are competing claims to the cargo, then owners will not be safe from liability. Under English jurisdiction, the proper course is to interplead”, and have the Court decide who should have possession of the cargo.

Owners are not necessarily obliged to deliver the cargo without production of the bill even to the person named in that bill. However, the general rule is that owners are obliged to deliver without production of the bill of lading if it is proved to their reasonable satisfaction:

(a) that the person demanding delivery of the cargo is its rightful possessor

(b) that there is a reasonable explanation for the unavailability of the original bill of lading.

Nevertheless, owners should protect themselves by taking an indemnity prior to delivery of the cargo, ideally in the form of a bank guarantee.

Charterers cannot lawfully order owners to deliver cargo to anyone other than its rightful possessor. However, owners are frequently under great commercial pressure to deliver cargo without production of the bill. Often, the identity of the rightful possessor of that cargo changes several times during a voyage, especially in the oil trade. This increases the danger of misdelivery claims.

It is often suggested that delivery without production of the bill is a custom in the oil trade, and thus a term in the contract of carriage. However, in English law, it is necessary to prove that the alleged custom is reasonable, certain, universally observed and consistent with the governing contract. Therefore, although delivery without production is common practice in the oil trade, it is difficult to prove that it is a custom.

Increasingly, charterparties include a term requiring owners to deliver cargo without production of the bill of lading, in return for an indemnity. Owners should be aware that this term is no defence against a misdelivery claim, and that it is necessary to ensure that they have an adequate guarantee to protect themselves against potential liabilities.

The Association is grateful to Tim Houghton of Holmes Hardingham for this contribution.

Claused mates’ receipts/ clean bills of lading-warning!!

The Association has recently become involved in two identical incidents where one of its shipowner Members claused the mates’ receipts to reflect the true condition and order of a steel cargo on shipment but issued “clean” bills of lading at the request of shippers against the shipper’s letter of indemnity.

The principle behind the practice is that, to the shipper’s benefit only, bills are issued which state the cargo to be in a sound merchantable condition, thus enabling the shipper to obtain full payment for the goods under the letter of credit. The shipowner supposedly has the protection of the letter of indemnity for any claims for the preshipment damage/condition which arise.

In the two incidents however, when the ship commenced discharge, receivers immediately brought claims for the damage to the steel which was of preshipment origin. However, the receivers held “clean” bills indicating that the goods were in good condition upon shipment. They therefore had good grounds to argue that the goods had been damaged whilst in the carrier’s care and had a prima-facie case against owners.

Receivers’ arrested the ships for security for their claims and shippers refused to assist and indemnify the owners under the letters of indemnity. In such circumstances the Association, bound by its rules, will only be able to assist at the discretion of the Directors.

It is therefore vitally important that owners understand the following.

Under the Hague Visby Rules Art. III (3) and the Hamburg Rules Art 15. the carrier has an obligation to record on the bill of lading the apparent condition and order of the goods.
Under the Hague Visby Rules Art. III (4) and the Hamburg Rules Art 16 (2) the bill of lading is proof of receipt of the goods by the carrier and the order and condition described in it is binding upon the carrier.
If a bill of lading does not record the apparent order and condition of the goods as required and evidenced in the mates’ receipts it will mislead an innocent third party receiver who has no knowledge of the true condition of the goods. This is FRAUD and the carrier under the bill of lading will be held liable in the first instance notwithstanding any lack of motive, apparent or otherwise.
Letters of indemnity issued by shippers in such circumstances may be unenforceable as a matter of English law; they are only as reliable as the standing and integrity of the shippers themselves, and to the extent that they prejudice a Member’s insurance, effectively stand in place of a Member’s P&I cover.

The Association does not recommend the practice of shipowners accepting letters of indemnity for the production of “clean” bills where the order and condition of the goods requires otherwise.

If through commercial pressure a Member finds itself in the regrettable position of adopting such a practice, the Club can only suggest that they insist the letter of indemnity is backed up by a bank guarantee from a first-class bank.

Last poster in the SWAPP series issued

The last poster in the highly successful North of England Safe Work Accident Prevention Poster (SWAPP) series is distributed with this edition of Signals.

The SWAPP series conveys important personal injury prevention messages in a humorous yet focused way and features the immediately recognisable characters of Mr Good and Mr Bad. The two characters brought to life in North of England video Personal Injury Prevention – Safety Needs You find themselves engaged in 16 shipboard situations encountered by many seafarers on a daily basis.

The poster series covers a wide range of activities and addresses the rights and wrongs of the following important aspects of shipboard safety, including

dress safe – work safe
handling chemicals
workshop practices
lifting operations
good housekeeping
work planning
safe access
electrical maintenance
entry into enclosed spaces
safety management
welding
working aloft
mooring operations
onboard training
cargo operations

SWAPP 16, the final poster in the series, focuses on the rights and wrongs of cargo operations at sea and particularly raises awareness to the dangers of passing below cargo lifts and operations.

The time a ship spends alongside working cargo often only represents a small proportion of total ship’s time but it can be both stressful and very busy for all onboard. Either as a result of real or perceived pressures, seafarers might be tempted to ‘cut corners’ and take ill considered risks – this must be avoided at all cost.

All cargo operations should be fully discussed with all of the personnel involved and any safety concerns must be explored and resolved. All seafarers should wear appropriate personal protective equipment (PPE) and at least the minimum levels of PPE as identified in North of England PPE slide guide.

As well as cargo operations, many other related activities are undertaken while alongside and all personnel should be mindful of the safety aspects associated with

cargo hold inspections and particularly entry into enclosed spaces
operating hatch covers or lifting hatch pontoons
all cargo lifting activities
transiting cargo working areas
loading ships stores and spare gear

During cargo work, the movement of all personnel, be they ships crew or shoreworkers, up and down the cargo deck should be on the non cargo working side of the ship. Indeed, approved safe transit and access routes should be clearly marked either by ropes/tapes or painted safe transit lines on the deck.

Many accidents are as a result of simple slips and falls and all personnel should take particular care when decks are slippery or wet. Cargo hydraulic systems can, if not correctly maintained, lead to minor oil spills and major slipping hazards. Any oil leak, however small, should be removed and any fault must be properly rectified - avoid temporary repairs.

During cargo operations, all cargo working areas must be well lit and all personnel should appreciate the potential hazards. As always, good communication, effective work planning, the use of correct PPE and safe practices are essential if accidents, injuries and fatalities are to be avoided during cargo operations.

If in doubt – check it out. Safe sailing!

Members requiring additional copies of SWAPP 16, or any of the other posters in the series, should contact the Loss Prevention Department at the Association. Copies of the slide guide mentioned in this article as well as the book upon which all this material is based, "Personal Injury Prevention - A Guide to Good Practice" are also available from the loss prevention department.

Louisiana – alcohol related offences

A recent federal district court decision has imposed a duty on shipowners to monitor the consumption of alcohol on board and to prohibit intoxicated passengers from driving. Whilst Louisiana state law places no responsibility on those who sell alcohol for subsequent drink related incidents, this is superseded by the general maritime law. The practical effect is that should alcohol be offered to a visitor to the ship, for example surveyors, ships agents etc., and they then choose to get drunk ashore, owners can be held liable for any resulting accident simply for having provided the first drink. Members should ensure therefore that ships visiting US waters engage in a strict alcohol policy, locking away all such beverages and not offering alcohol to ships visitors.

The right to choose

There has however been some progress in Louisiana where the legislature has enacted several amendments which will impact Members.

Until recently only plaintiffs had the right to select a jury trial or judge trial in admiralty and maritime cases brought in state court, a choice which is now available to defendants. Whilst the effect may be limited, Members will now be able to be more proactive in choosing the most favourable mode of trial.

There is also now the defence of forum non conveniens in Louisiana, albeit in restricted circumstances. The test to be utilised by the courts in determining whether the doctrine applies includes: the availability of a more appropriate forum, the location where the acts giving rise to the action occurred and the convenience of the parties and witnesses. The defence is not available if the action is brought in a parish where the plaintiff is “domiciled” a situation which it is only too easy for plaintiffs to arrange. Further, choice of law or foreign clauses in employment contracts are unenforceable, null and void unless the employee “expressly, knowingly or voluntarily” agrees to and ratifies the clause after the occurrence of the relevant incident.

Training courses in P & I insurance and loss prevention – 2000

Each year North of England P&I Association and South Tyneside College run a series of four and five-day training courses in P&I insurance and loss prevention. The courses provide an excellent foundation in a wide range of P&I related subjects including underwriting, claims and introduce loss prevention ideas which will help delegates identify ways in which they can help prevent claims arising in the first place.

Each topic is covered by a series of lectures by experts drawn from the management and staff of North of England P&I and South Tyneside College as well as from the shipping industry and legal profession. An important feature of the course is that each series of lectures is reinforced by a practical ‘hands on’ workshop.

By solving realistic and practical problems within the workshop sessions the delegates will more readily understand and absorb the information presented in the lectures. Delegate numbers are restricted so as to achieve maximum value from the workshop sessions.

At the time of going to press with this issue of Signals, various arrangements were still being finalised but the courses planned for the year 2000 are as follows:

April – Dubai

A five-day training course to be held at the Dubai Marine Beach Resort & Spa running from Sunday 9 to lunchtime Thursday 13 April. The delegate fee will be US$950 for Members of North of England and US$1350

for non-members. The fee will include attendance at the five-day course, an extensive set of supporting study material and lunch and refreshments on each day. Special rates for hotel accommodation will be available for those attending from outside of Dubai. Full details appear in the accompanying brochure.

June – Lumley Castle

Accompanying this issue of Signals is a brochure setting out full details of the immensely popular annual course held at the magnificent 14th century Lumley Castle, which is located a few miles to the South of Newcastle upon Tyne. As one delegate said “This is much more than a training course –

it is an unforgettable experience”.

September – Far East

A series of four-day training courses will be held in the Far East linked with the Association’s office in Hong Kong. The first course will be held in Hong Kong in conjunction with the Hong Kong Shipowners Association. The second course will be held in Shenzen PRC in conjunction with COSCO.

October – USA

A five-day training course is being planned with the continuing education faculty of the US Merchant Marine Academy – Kings Point – in New York, USA.

Shorter training courses and seminars are also planned for the UK, Germany, Greece, Norway, Iran, Korea and Singapore.

Readers are reminded that the Association still offers full training in P&I insurance and loss prevention through its distance learning course, which can be completed at home, in the office or on board ship.

If one small claim can be prevented as a result of attending one of these training courses then the investment will be repaid many times over.

For full details of any of these training courses please contact the loss prevention department at the Association or via our website at: http://www.nepia.com.

Reporting in Greece

North of England P & I Association held its annual seminar at a venue outside of Newcastle for the first time this year. The profile of the Club has changed considerably during the last quarter of the twentieth century – from a Club comprising almost exclusively traditional British shipowners to a very international Association of shipowners from around the world. However, there are geographical clusters of members identifiable and when the managers were considering where the venue should be for the first North of England seminar to be held outside Newcastle, there was little difficulty in agreeing that Greece was the obvious choice. Not only do Greek shipowners represent about a quarter of the total membership of the Club – the current chairman, Mr Spyros Polemis is a native of that impressive maritime nation.

On the 21 September the full day seminar was held at the Ledra Marriott Hotel, Athens, where 150 Members and specially invited guests attended.

Joint managing director, Mr Rodney Eccleston, along with five other Club managers and executives provided the delegates with some wide ranging presentations. During the morning session the opportunity was taken to carry out a detailed look at the Club in conjunction with the release of the latest managers report. The afternoon papers provided a series of practical loss prevention topics to explore and consider.

Because of an unavoidable earlier commitment, Mr Polemis was unable to chair the day but that role was taken by a long standing North of England Club director – Mr George Procopiou who performed an excellent job of keeping the programme flowing smoothly.

Copies of the Speakers’ Papers can be obtained from the loss prevention department at the Association.

Congratulations!

John Howe, assistant manager in the Association’s underwriting department, recently graduated with an honours degree in insurance management. The study programme John undertook recognised his Chartered Insurance Institute (CII) qualifications enabling him to extend these to a BA(Hons) in Insurance Management through the University of Central England Business School in Birmingham. John said “Although the course was clearly geared to the financial services industry, it provided a broad view of subjects not normally associated with the specialist P&I industry but of major significance to the Club’s position in the wider insurance market.”

John added an ACII to his Master Mariners certificate shortly after joining the Association and recognised the importance of complementing sea-going experience with shore based qualifications. Congratulations to John.

Signals Swot quiz winners

The “Signals Swot 2” winner was:

Captain J Exell who is the Master on board MV ‘Sand Serin’

The 20 runners-up are: Garma Zoran

of Mediterranean Shipping Company

• Captain Milutin Mijanovic of Dabinovic (Monaco) • Captain Jayant Roy of The Shipping Corporation of India • Desikan Bhoovaran of Univan Ship Management

• Runar Ingraldsen of T. Alendal Rederi

• Brian Baker of United Marine Aggregates • Carsten Hansen of Tschudi & Eitzen International • Frans Dieleman of Post & Co • Douglas Henderson of Arklow Shipping • Captain A Chopra of Davic Shipmanagement • Ole Clausen of Norden • Henning Frolich Jorgensen of Norden • Ola Olsson of Sweden • Hans A Knudsen of Norway • Captain Gopcevic Stevan of Dabinovic (Monaco) • James W Ronning of Giesy Greer & Gunn • Robert Jette of Clark Drummie • Christian Preda of Ermis Maritime Corporation • Bridget Fitzgerald of Arklow Shipping • Sylvia Bonnett of Lamorte Burns.

Well Done!!!

Distance Learning Course student Captain Cookson

successfully completed the Course and achieved a pass with distinction. Captain Cookson was formally with the National Cargo Bureau in New York and now works as as independent surveyor based in Norfolk, Virginia. He is pictured here receiving his certificate from head of Loss Prevention, Phil Anderson, during a recent visit to the Associations head office in Newcastle.

Signals Swot Quiz

Welcome to Signals Swot number 3. We invite you to pit your wits against “Bosun Bo” and become a Signals Swotter!

This is not a general knowledge quiz but rather the answers to all the questions are to be found within this particular issue of Signals in which the quiz appears.

The quiz is open to all readers of Signals.
The quiz comprises of 12 multiple choice questions – simply select the correct answers.
Send a photocopy of your answers, along with your name, and if appropriate – name of ship and position onboard – address and company to the editor of ‘Signals’ at the Association or submit your entry via our Internet Website
All correct entries received by the closing date will be entered in a prize draw.
Closing date 17 March 2000.

The first correct entry drawn will receive a limited and numbered edition of a high quality print of the portrait of our quiz master “Big Bo” personally signed by the illustrator “Tugg” Willson as well as a specially commissioned “Bo’ the Brains” T-shirt. The next 20 correct entries drawn will each receive a “Bo’ the Brains” T-shirt. Details of all the winners will appear in the following edition of Signals.