Algeria – Cargo Claims, Escalating Arrests

Protection & Indemnity
Suite 974 Lloyd’s, One Lime Street
London EC3M 7AH
Telephone: 020 7220 6967
Facsimile: 020 7220 6974
Bulletin No 8
Algeria – Cargo Claims, Escalating Arrests and Cash Demands
When fixing vessels for bulk cargoes to the Mediterranean, Owners need to
be aware of the problems they are very likely to experience in Algerian ports,
including Algiers, Oran, Skikda, Arzew and Bejaia. Particularly, cargoes of
cereal, sugar and other bagged food products were at the top of the list during
2002 – 2003 of claims for shortage and damage.
The move away from a government monopoly of imported commodities, most
particularly food stuffs, has permitted speculation by importers in the cargo
market. Sugar from Northern Europe, corn and animal feed from the
Mediterranean and Black Sea are attracting unwarranted attention.
Particularly at the end of the season speculation increases and buyers may
even be looking for consignments at prices where quality, colour, moisture
content or storage-life may be impaired, even before shipment.
In such instances the Carrier is at risk of vessel arrest, incurring demurrage
and cargo claims that take exceptional time and expense to resolve. Such is
likely to result notwithstanding a proactive management policy by Navigators
Protection & Indemnity.
Some issues relevant when fixing to Algerian ports are listed below.
1. The claims exposure is significant. Accordingly, the ship’s command
must be extremely zealous about the apparent quality and condition of
cargo being loaded.
2. Any dispute over the weight or quantity of cargo loaded must be reported
immediately to Navigators in London or the nearest P&I Correspondent
listed on the Navigators website
3. Suspected short loading may have to be dealt with by draft survey –
always in still water. Also note, merely because an automatic counter at
load silos may be in operation at the commencement of loading there is
no guarantee the resultant total, used by the shipper reliant on them will
be accurate. Determine any counter auto-reset function (or lack of) does
not operate to Owner’s detriment particularly when certain bags have
been rejected during the loading process.
4. Pressure to issue clean Bills of Lading in consideration of promises of a
Letter of Indemnity from a Charterer or Shipper must be resisted.
5. Tallies during discharge may be a cost-effective way to minimise delay
and expense on completion. The local Correspondent or ship agent can
advise on the best procedure and the likely cost to Owners. In the event
of a cargo claim under the policy of insurance, such costs may be
recoverable by Owners (subject to deductible etc.)
Navigators Protection & Indemnity is a trading division of Navigators Management (UK) Ltd whose registered office is at the
address given above.
(Registered No. 3254265)
6. The likely additional cost of trading to Algerian ports needs to be taken
into account by Owners when estimating voyage expenses prior to fixing
a vessel on charter.
Arrest of Vessels in Algeria
Navigators, in common with some P&I Clubs, increasingly is concerned over
the ambitions of cargo interests to refuse security properly conforming with
Section 156 of the Maritime Code and demands for a cash deposit in Euros or
US Dollars. Indeed the demand for a vessel arrest, irrespective of whether
sufficient cargo damage has occurred during passage, is normally an overture
to a subsequent demand for cash and several weeks delay.
These delays are inevitable because of the need to obtain the appointment of
a Court surveyor, to find dates when the surveyor will go to the ship, produce
a report for submission to the Court and for the Court to find a space in the
calendar to review and make an Order.
Even where the Court has ordered a claim to be secured, cargo interests in
some cases have declined to agree the vessel’s departure pending deposit of
a cash sum in an overseas Bank.
Our recent experience is shared by the P&I Mutual Clubs. Although initiatives
have been taken to involve the Merchant Marine Office of the Ministry of
Transport in stopping these practices, no immediate improvement has been
observed. The point has been made publicly that these practices are clear
violations of the 1952 International Convention on Ship Arrest and the
Algerian Maritime Code. They are also damaging to the economy in terms of
contributing to port congestion generally and are an evasion of the prevailing
Tax regimes and Currency controls.
This bulletin will be updated as soon as we can report on any improvement.
In the case of doubt or concern generally owners are invited to make contact
with SEAMAR Algiers at [email protected]