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Ship Finance And COVID-19

As a result of the spread of COVID-19, the shipping industry is one of many contending with a global crisis. We have received numerous queries from concerned lenders and borrowers as to the potential effect of the crisis on their English law loan facilities and the following is intended to address at least some of these concerns. However, each facility agreement is different and, as with any contract, the devil is in the detail, so a review of the relevant agreements is vital before any action should be taken. So ...

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WFW advises ICBC Financial Leasing on US$544m sale and leaseback with Frontline

Watson Farley & Williams (“WFW”) advised ICBC Financial Leasing Co., Ltd. (“ICBC Leasing”) on the US$544m sale and lease back of ten 2019-built Suezmax tankers with Frontline Ltd. (“Frontline”). Frontline used the proceeds to fund the acquisition of the ten vessels from Trafigura Maritime Logistics, a wholly-owned subsidiary of Trafigura Group Pte Ltd. Part of ICBC Group, ICBC Leasing is a leading leasing firm in China providing aviation leasing, shipping leasing, equipment leasing in addition to operating investment management businesses. Frontline is one of the world’s largest oil tanker shipping ...

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Charterparty requirements to notify claims – take care!

Voyage charterparties frequently require the owner to notify any claim with supporting documents within a relatively short period of time. Our recent article on The Amalie Essberger touches upon the issues that can arise as a result in the context of demurrage time bars in such charterparties. However, charterparties relating to bulk carrier vessels on the New York Produce Exchange (NYPE) Form often contain similar provisions which, given that claims under time charterparties can be significantly more complicated, may be more onerous for claimants to comply with. The English High ...

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COVID-19 And Supply Chain Implications For Ocean Shipping

As recently as March 3, American Shipper headlines, citing CargoMetrics, screamed “China cargo flows rapidly return to pre-coronavirus levels” and referenced “just released updated indices showing that both import and export cargo flows (measured in terms of the mass transferred on and off ships) have reverted to historical norms.” At the time (only 10 days ago) there appeared to be light at the end of the tunnel; however, an almost daily barrage of new headlines has underscored the impact on the rapidly changing global supply chain, including in the United ...

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GA Guarantees And GA Bonds – Spot The Difference

The English High Court recently handed down a helpful judgment that confirms the longstanding market view on the use of bonds and guarantees issued following a declaration of General Average (GA). THE ISSUE When GA is declared, the owners of the vessel have a possessory lien on the cargo which they are entitled to maintain until the owners are secured for any potential demand under a GA adjustment. Such security is usually issued by the cargo owners in the form of a bond which is then counter-secured, usually by a ...

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Cyprus: Tonnage Tax Scheme Extended Until 31 December 2029

The Shipping Deputy Ministry has issued Circular 1/2020 informing shipowners, charterers and ship managers that, following the formal assessment of the Cyprus tonnage tax scheme, the European Commission has concluded that Cyprus’s relevant scheme is compatible with the internal market and in line with the Guidelines on State Aid to Maritime Transport. In its decision, the European Commission concluded that the Cyprus tonnage tax and seafarer scheme is in line with EU state aid rules as it contributes to the competitiveness of the EU maritime sector and encourages ship registration ...

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Demurrage Time Bar Clauses

The question of precisely what demurrage time bar clauses require has long been a question of some controversy, in light of the English High Court’s highly technical and demanding approach in the Sabrewing and the Adventure cases, contrasted with the more relaxed commercial approach in the Eternity and the Abqaiq. In the Amalie Essberger the High Court recently sought to clarify the position, but in so doing, some lingering uncertainty remains. Tanker voyage charters often contain notoriously stringent provisions for the valid issuance of a demurrage claim by owners, typically ...

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Watson, Farley & Williams: Plan your passage carefully

In a significant decision published yesterday, the English Court of Appeal has upheld the decision of the lower court that an inadequate passage plan that caused a vessel’s grounding rendered the vessel unseaworthy. The decision in The CMA CGM Libra[1], which was given by an experienced maritime bench made up of Lord Justices Flaux, Haddon-Cave and Males, emphasises the importance of ensuring that ship passage plans are fit for purpose. Permission to appeal to the Supreme Court has been sought, although it remains to be seen whether such permission will ...

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HFW Strengthens Market-Leading Shipping Practice With Senior Promotions

Global, sector-focused law firm HFW has strengthened its market-leading shipping practice with the promotion of Claire Womersley to partner and Caroline Murphy and Katherine Noble to legal director, effective 1 April 2020. Claire’s practice encompasses all aspects of crisis response and ensuing “wet” litigation arising from marine casualties. Claire has supported clients with large scale casualty management for a number of the firm’s high profile cases, particularly those involving mass fatalities and natural disasters. Claire is a Master Mariner and a core member of HFW’s Travel and Leisure Team, based ...

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IMO 2020’s new sulphur emissions cap introduced

As the vast majority of the shipping community will already be aware, on 1 January 2020 the new sulphur content limits in Annex VI of the International Convention for the Prevention of Pollution from Ships (MARPOL) came into effect. These new limits require the sulphur content of fuel oil burnt by commercial ships trading outside sulphur emission control areas to be 0.5% m/m or less, apart from those ships using equivalent compliance mechanisms (eg, using exhaust gas cleaning systems, also known as scrubbers or liquefied natural gas – see Regulation ...

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An Epidemic Of Uncertainty – The Coronavirus And Force Majeure

Do the effects of the coronavirus give rise to legitimate force majeure claims in connection with shipbuilding contracts (which similarly apply to offshore construction contracts), particularly those underway in China? In general terms, a force majeure event is an unforeseeable one that is outside a contracting party’s control and prevents that party from performing its contractual obligations. “Frustration is invoked in fairly extreme circumstances and delay alone will not generally suffice.” If a shipbuilding contract becomes impossible to perform, the builder may seek to invoke the English law doctrine of ...

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WFW advises DeA on credit restructuring re Elbana di Navigazione

Watson Farley & Williams (“WFW”) advised DeA Capital Alternative Funds SGR (“DeA”), a division of IDeA Corporate Credit Recovery II Shipping Fund dedicated to shipping NPLs, on the restructuring of its credit relating to Elbana di Navigazione S.p.A., a family-run shipowner founded in the 1940s. As a result of the transaction, DeA Capital has, through one of its fully owned subsidiaries, acquired a vessel from Elbana di Navigazione’s fleet. The deal is part of a larger project aimed at managing and restructuring a significant portfolio of NPLs purchased by DeA ...

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WFW to strengthen its Singapore corporate offering with return of Partner Damian Adams

Watson Farley & Williams (“WFW”) is delighted to announce that corporate expert Damian Adams has re-joined the firm as a Partner after six years at Simmons & Simmons in Singapore. Damian was previously a Partner in WFW’s Singapore office. He first joined WFW in 1997 and spent time as an Associate in WFW’s London and Singapore offices. Damian specialises in greenfield, early stage and growth capital investment, M&A and other corporate transactional work, as well as asset finance matters, across a range of the firm’s sectors including maritime, energy and ...

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COSCO de-listed; settlement between OFAC and Eagle Shipping; SDN update

The United States lifted sanctions[1] on a subsidiary of COSCO Shipping Corporation Ltd., the Chinese shipping giant. Last September, the U.S. Department of the Treasury’s Office of Foreign Asset Control (OFAC) imposed sanctions on several COSCO subsidiaries for transporting Iranian crude oil in violation of the U.S. sanctions regime. The move disrupted COSCO’s regular trading patterns and put pressure on China during trade negotiations with the White House. In a separate case, OFAC settled with Eagle Shipping International (USA) LLC. for apparent violations of sanctions imposed on a Burmese entity, ...

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Singaporean Shipping Company Convicted for Concealing Illegal Discharges of Oily Water

Unix Line PTE Ltd., a Singapore-based shipping company, pleaded guilty in federal court today to a violation of the Act to Prevent Pollution from Ships. Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Environment and Natural Resources Division, U.S. Attorney David L. Anderson of the Northern District of California and U.S. Coast Guard Investigative Service Special Agent in Charge Kelly S. Hoyle made the announcement. In pleading guilty, Unix Line admitted that its crew members onboard the Zao Galaxy, a 16,408 gross-ton, ocean-going motor tanker, knowingly failed to ...

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