117626472v1
EBOLA EPIDEMIC IN THE
COMMERCIAL SHIPPING CONTEXT
David Pitlarge
Partner
Marine, Trade & Energy
1. Introduction
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The Problem:
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Highly contagious virus : first case in Guinea in February
According to the World Health Organisation, until September 21
there have been 6,263 cases with 2,917 deaths
Widespread in West Africa
Recorded cases intensifying
Problem and responses fast changing ( e.g three cruise lines,
Regent Seven Seas, Seabourn and Fred. Olsen, have cancelled
port calls in West Africa), difficult to establish a fixed factual
background.
1.
Introduction
• Principal areas affected:
1. Introduction
Responses
• Port closures, curfews and quarantine restrictions
– Singapore: Circular 11/2014. “Plague infected area within 60
days”…wait at quarantine anchorage for PHO clearance.
– Mauritania, Gabon, Ivory Coast and Cameron…closed
– China- increased vigilance on quarantine
• Effect on trade(s) / travel
• Recommendations of supra-national bodies –
WHO, IMO, ICS Third party states: US intervention
• Industry circulars
• Recommended clauses
2. Legal Context
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Particular problems do not displace principle
“There is no relevant concept of fairness other
than the contractual balance struck …. construed
in accordance with well known orthodoxy”.
[Owners’ Counsel in the Saldanha”]
2. Legal Context
• Distinguish
– Domestic laws/local regulations and/or ad hoc stipulations
from
– the governing contractual law/terms
• and
– The position concerning a voyage to an Ebola port from
– the subsequent destination
3. Port Safety
• Can an Ebola port be unsafe?
3. Port Safety
• Classic Definition
“…unless ,in the relevant period of time, the particular ship can reach
it, use it and return from it without, in the absence of some abnormal
occurrence, being exposed to danger which cannot be avoided by
good navigation and seamanship”
“The Eastern City” [1958] 2 Lloyd’s Rep 127
3. Port Safety
• Definition concerns “the particular ship”, not
crew…BUT
• “Political risks” can amount to unsafety, and
• Therefore the definition goes beyond “marine” risk see The “Evaggelos Th” [1971] 2 Lloyd’s Rep 200
– Term implied, but also “vessel can lay safely afloat” wording
– ordered to Suez
– CTL due to shell fire starting after arrival
3. Port Safety
Other political risk cases:
• “The Greek Fighter” [2006] 1 Lloyd’s Rep. 99 – risk of
confiscation for storing contraband
• “The Chemical Venture” [1993] 1 Lloyd’s Rep. 508 –
missile damage during Iran/Iraq War
• “The Saga Cob” [1991] 2 Lloyd’s Rep. 398 – damage
from guerilla attacks at Massawa
– “Will not in circumstances such as the present, be regarded as unsafe
unless the “political” risk is sufficient for a reasonable ship owner or
master to decline to send or sail his vessel there”
– Look for characteristics
3. Port Safety
• Mixed question of fact of law:
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The elements of unsafety are questions of law
Applying them to the given situation is a question of fact
3. Port Safety
• Consider how the warranty might be framed without
reference to the vessel
• is there factually a breach?
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Probability?
Abnormal occurrence / characteristic of the port
“The Saga Cob” test? Reasonable for owners not to go (WHO/ IMO
recommendations)
3. Port Safety
• Due diligence proviso (e.g. cl.4 Shelltime 4)
• Context:
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Why/when are we asking the question
Before entry to the Ebola port (risk of repudiation)
After – damages for breach
Primary duty/secondary duty
Waiver
Implied indemnity
“port” vs “berth”
4. Off-Hire
• Starting point: the clauses/ off wordings themselves
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Is it an off hire event?
“Whatsoever” in the NYPE cl 15 type scheme (see the “The Apollo”
[1978] 1 Lloyd’s Rep… quarantine after crew members contract
typhus)
Shelltime 4 cl 21(a) iv “due to any delay in quarantine arising from
the master, officers or crew having had communication with the
shore at any infected area without the written consent or instructions
of Charterers or their agents…”
See also Supplytime cl.13 (a) (ii)
4. Off-Hire
General principles
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“preventing the full working of the vessel” ( consider
“in the ordinary way an activity required by the
charterer”)
• Time lost
• Deficiency/ default of men
• Time lost due to :
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a natural result of charterers’ orders
charterers’ responsibility
5. Other Charterparty and Bill of
Lading issues
(a) Notices of readiness: free pratique, quarantine and
doctrine of relative readiness (see “the Delian Spirit”
[1972] 1 QB)
• Vessel has to be ready, subject to contrary provision
e.g. WIFPON
• NOR not prevented if only “mere formalities”
required… Ebola quarantine unlikely to be a “mere
formality”
• Specific clauses e.g. Asbatankvoy clause 17(a)
5. Other Charterparty and Bill of
Lading issues
(b) Additional remuneration/quantum merit
• Vessel cannot earn demurrage, say, because cannot
tender NOR
• Additional remuneration earned in “The Saronikos”
[1986] 2 Lloyd’s Rep. 277
• Vessel requested to wait off Aqaba for 9 days –
owners entitled to reasonable remuneration
• Difficult: emphasis on charterers’ request/ implied
contract analysis
5. Other Charterparty and Bill of
Lading issues
(c) “So near thereto as she can safely get”
• Bound to wait a reasonable time before adopting
alternative place of loading/discharge
• Reasonable time for commercial considerations
• Obstacle need not be physical
• Can include another port “within an area or zone or
within a range of proximity not beyond the reasonable
contemplation of the parties as fair and reasonable”
5. Other Charterparty and Bill of
Lading issues
(d) Deviation
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“Art IV r4” “Any deviation in saving or attempting to save life or
property at sea, or any reasonable deviation shall not be deemed to
be an infringement or a breach of these rules or of the contract of
carriage, and the carrier shall not be liable for any loss or damage
resulting therefrom”
“The true test seems to be what departure from the contract voyage
might a prudent person controlling the voyage at the time make and
maintain, having in mind all the relevant circumstances existing at
the time, including the terms of the contract and interest of all parties
concerned, but without obligation to consider the interests of anyone
as conclusive” (Stag Line -v- Foscolo Mango] [1932] AC 328)
5. Other Charterparty and Bill of
Lading issues
(d) Deviation
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Deviation can be reasonable even if planned before the voyage
began or BL issued
Significance of deviation
5. Other Charterparty and Bill of
Lading issues
(e) Breach of contract of carriage/voyage obligations/
HR/HVR
• Exclusions within HR/HVR: Art IV r2
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(g) “the arrest or restraint of Princes… or seizure under legal
process”
(h) “quarantine restrictions”
• Subject to due diligence obligations. Consider
applications of recommendations – possible alignment
to e.g. issues relating to BMP4 in piracy context
5. Other Charterparty and Bill of
Lading issues
(f) International Code for the Security of Ships and of
Port Facilities/ISPS Code
• Basic obligation: owners’ duty to carry out a risk
assessment which considers the ship’s crew and
considers potential threats including stowaways
• ISPS clauses – possible damages for breach
• Note current recommendations
6. Adoption of specific clauses
• No Bimco clause as yet
• Charterers taking up clauses
6. Adoption of specific clauses
• Issues to consider:
– Actual risk…just Ebola?
– Where : define affected area
– Terms like “ may or likely to be exposed to” and “such”
– Define the liberties
– Notice to charterers
– Non waiver / no deviation
– Additional costs / time…indemnities
– Nomination of alternative disport
Amend laytime / demurrage clauses
7. Domestic Laws and Local
Regulations
• These do not re-write any contract, although they
might have an effect on the performance
• “The Van Gogh” [2008] EWHC 2794 – “dangerously
unsafe”, this from s 94 of MSA 1995…is it really
relevant?
8. Crew Issues
• Consider terms of crew contracts
• ITF Collective agreement includes MLC minimum
standards
• Prompt access to medical care
• Owner responsible for costs related to sickness
connected to employment
• Cannot limit to less than 16 weeks’ pay
• Repatriation and compensation for death in service
• ITF high risk areas…consider passing on extra costs,
if any
9. Sale Contracts
• Will impact on the trade
• Potential disconnection between force majeure
provisions within contract and laytime/demurrage
provisions within charterparty
10. Insurance Issues
• Some club rules provide exclusions for “imprudent,
unsafe, unduly hazardous or improper voyages”
• Usually determined as such by the board
• Marine Insurance Act 1906 limits the warranty to
legality (see s. 41)
11. Some tentative conclusions
• Up to date factual situation important to any analysis..
• ..that will feed into difficult questions about going to
Ebola port. This will remain an issue.
• Questions of delay will arise: these will be determined
by considering interaction between facts , as above,
and exact wording. Avoid issues by bespoke wording.
• Frustration, breach and deviation issues less likely.
• However, owners should be vigilant and keep up to
date with recommended practice.
For further information please contact:
David Pitlarge - Partner
Hill Dickinson
Direct Dial
+44 (0)20 7280 9251
Email
david.pitlarge@hilldickinson.com
Fax
+44 (0)20 7283 1144
Website
www.hilldickinson.com