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The FOB Buyer’s Right to Substitute Its Vessel in Commodity Contracts

On 1 September 2017, the Grain and Feed Trade Association (Gafta) introduced an amendment to its nomination clause in some (but not all) of its fob contracts. The result: an fob buyer is no longer required to give new contractual pre-advice in order to validly substitute its nominated vessel. This client alert discusses an fob buyer’s right to substitute a vessel across a number of different terms and commodities, and the contractual effect of amending the usual English law position. It also touches on the other contractual amendment introduced by ...

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Is Defective Work An Accident? And Why Does It Matter?

Liability insurance provides coverage against accidents. If defective work is accidental, then maybe liability insurance will cover claims for property damage arising from defective work. But should it? This is one of the most debated issues in construction law. Courts in different states have ruled both ways. Some courts are adamant that insurance shouldn’t cover damage caused by defective work. Over the last ten years, however, the majority of courts that have considered the issue have decided yes, defective work is an accident. While this trend is favorable for contractors, ...

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Cosco Shipping Int’l secures two shipbuilding contracts

COSCO Shipping International’s subsidiaries have secured two contracts to build multi-purpose pulp vessels and bulk carriers. In an exchange filing on Thursday evening, it said it has secured a 222 million yuan (S$45.3 million) contract to build two multi-purpose pulp vessels with an option to build one more similar unit. This contract was made between Cosco (Dalian) Shipyard Co Ltd and Cosco Shipping Specialised Carriers Co Ltd. The latter is also a subsidiary of China Ocean Shipping (Group) Company, Cosco Shipping International (Singapore)’s parent company. The units are scheduled for ...

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WFW advises China’s CSIC Leasing on its first ever ship lease financing

International law firm Watson Farley & Williams (“WFW”) has advised CSIC Leasing Co. Ltd (“CSIC Leasing”) on a US$65.5m sale and leaseback transaction with Eletson Corporation (“Eletson”), a Greek tanker owner and operator. Under the transaction, subsidiaries of CSIC Leasing acquired four second-hand long range product tankers (the “Vessels”) from subsidiaries of Eletson, with the sale proceeds being used to refinance the balloon payment under certain loan facilities of the Eletson group secured on the Vessels. The Vessels were then leased back on delivery to Eletson under agreed financial lease ...

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The ‘unreasonable’ cost of casualty repairs: Association of Average Adjusters chairman details claims dilemmas

Marine underwriters and insurance brokers have been urged to keep up to date with the changing ramifications for repair of casualty-stricken ships, to prevent the costs getting out of hand. Willum Richards, chairman of the Association of Average Adjusters, has stressed the importance of market participants monitoring the impact of technology, modern communications and the latest court determinations on what are reasonable expenses. He was delivering the autumn seminar lecture, which he entitled The Unreasonable Cost of Repairs, for the Association of Average Adjusters. The event was organised jointly with ...

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Leading industry figures gather in Naples for ‘Shipping & The Law’

The eighth edition of the international Shipping and the Law conference, organised by Studio Legale Lauro, will take place on October 12 and 13 at the Court Theatre of the Royal Palace of Naples. The conference will include participation from a number of leading figures from shipowning, finance, law, insurance and other players from around the world. The conference concludes with a Gala Dinner in the Apartments of the Royal Palace, hosted by CR MAG and SMIT. The conference procedings will be officially opened on October 12, followed by a ...

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Emirates Maritime Arbitration Centre breakfast series discusses Bill of Lading disputes

Continuing its commitment to knowledge sharing within the region’s legal and maritime sectors, on 24 September the Emirates Maritime Arbitration Centre (EMAC) held a session on bill lading disputes at its offices in DIFC. Held as part of the ‘Breakfast with EMAC’ series, the session was conducted by guest speaker Mr. Richard Strub, Partner at HFW. “Bills of lading are important documents for the maritime sector. They not only work as a receipt of freight services, they are also a document of title and a contract between the freight carrier ...

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Financing Risks of Vessel Modification Outside the United States

Whilst there is much in the news at the moment about the relaxing of the Jones Act in the aftermath of the recent (and on-going) hurricanes, we consider the financing risks of vessel modification outside the United States: The United States Jones Act limits the transportation of merchandise by water between points in the United States in vessels built in the United States, documented under the U.S. laws, and owned by the U.S. citizens. Any vessel which is later rebuilt outside the United States will lose its coastwise trade endorsement. ...

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MLC Update: Australia imposes lengthy bans on vessels for failures to pay crew wages

All vessels operating in Australian waters must comply with relevant international standards given effect under Australian law, including the Maritime Labour Convention 2006 (MLC). The Australian Maritime Safety Authority (AMSA) is the Australian authority responsible for regulation and implementation of the MLC’s requirements. Marine Order 11 obliges AMSA to investigate any complaint alleging a breach of the MLC reported by seafarers or by any person with an interest in the living and working conditions on a vessel (for example professional bodies, associations and trade unions). In the last three months ...

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Purchase of vessels via online judicial auction in China – a foreign buyer’s guide

You may be aware that Taobao is a renowned online shopping website in China, like e-bay in the US, but would you ever imagine that you could purchase a cargo vessel, by way of judicial auction, on Taobao? Following the sustained downturn of the Chinese shipbuilding market which has seen many buyers withdraw from shipbuilding contracts, and many shipyards suffer or collapse, it has become a very popular trend among Chinese courts to arrange the judicial sale of second-hand vessels (and hulls under construction) by way of auction. Since nine ...

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Court jails 11 Indonesian pirates for hijacking oil tanker

Eleven Indonesian citizens were sentenced to 16 years’ jail each, with seven of them to be given five strokes of the cane, by two Sessions Court here today after they pleaded guilty to hijacking an oil tanker in the waters off Terengganu early this month. They were ordered to serve the jail sentence from the date of their arrest, which was September 6 or 7. Ten of the modern pirates — Anne Raja, Arsito Mohd Hardi, Kreston Muhaling, La Abu, Bram Ali, Luther Marnis Zachawerus, Badiun, Meidy Hermanus Wajongkere, Rollan ...

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6 Alleged Somali Pirates in Yemen jail since 2009 Plead for Help

6 alleged Somali pirates who are currently jailed inside a prison at the Yemen capital, San’a plead for help from the Federal government of Somalia, the group said in an interview with Horn Observer. Yemen navy arrested the alleged pirates off the coast of Yemen in 2009 where they were later arrested at a prison in Mukala. Later Yemen court sentenced them to death and were transferred to San’a, the capital, before the Houthis rebels took over the city. “Yemen court sentenced us to death, but fortunately, the Huuthis took ...

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Global marine underwriting premiums continue to fall, reports IUMI

IUMI debates the growing challenge of reconciling dropping income levels with the risk of having to cover even larger single claims in an environment of ever increasing accumulation of values. IUMI – the International Union of Marine Insurance – presented its annual statistical report on the marine insurance market at today’s conference in Tokyo. The association reported that global marine underwriting premiums for 2016 fell to USD 27.5 billion, a 9% reduction on the figure reported for 2015. Vice-Chairman of IUMI’s Facts & Figures Committee, Astrid Seltmann explained: “The 2016 ...

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Cargo premiums continue downward trend for fifth consecutive year, says IUMI

Nick Derrick, chair of the International Union of Marine Insurance (IUMI) Cargo Committee reported a total estimated cargo premium of USD 15 billion for 2016 at the organisation’s annual conference today in Tokyo. This represented a decline of six per cent from 2015 and a further nine per cent decline since 2014. With world trade values and volumes increasing, Derrick expressed concern over the continuing downward trend in cargo premiums which had resulted in the sector making a technical loss for the fifth consecutive year. Exchange rate fluctuations were partly ...

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WFW advises ZEABORN on acquisition of Rickmers Shipmanagement

International law firm Watson Farley & Williams (“WFW“) has advised Bremen-based ZEABORN Group, as part of a consortium including Bertram Rickmers, on the acquisition of Rickmers Shipmanagement for an undisclosed sum in double-digit millions of euros. The deal has been approved by Rickmers Holding AG’s Creditor Committee, though that of the German competition authorities remains pending. The consortium also intends to acquire the remaining parts of the Hamburg-based Rickmers Group going forward, as well as invest in Rickmers Shipmanagement’s continued growth and expansion. ZEABORN is an international shipping company providing ...

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