Transcript Additional Perils - IMCC - International Marine Claims Conference

WELCOME TO THURSDAY
The Boxship
A tale worth telling!
Skegness
Answer
• b. is the right answer.
• (The current maximum recorded bollard pull
according to Guinness World Records is by
“Far Samson” at 423 tons)
Initial / Formal Caution
• Outlines seriousness of situation + explains
that UK Govt Intervention Powers may be
exercised;
• Insists Master employs tug of suitable
capability;
• If fail to make adequate arrangements then
they will be made for you and cost of tug(s) +
other assets will be recovered from Owners;
• Failure to comply criminal offence;
• CG offer any assistance.
SHIPS: POWER TO INTERVENE AND ISSUE DIRECTIONS
For purposes of preventing / reducing risk to safety
or of pollution by a hazardous substance
• Directions to take any action of any kind
whatsoever - includes destruction of a vessel
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Safety – applies in UK Waters (12nm)
Pollution - applies up to 200 miles from UK
coast or international median line
POWER TO REQUIRE SHIPS TO BE MOVED
For purpose of securing safety of a ship, other ships,
any persons or property, or reducing such risk
Directions that ship is / is not to be moved
from a specific place, or over a specific route
• Can direct a ship to be removed from UK
Waters
• Directions to owners / master /person in
possession of ship
• Applies in UK waters only (12 nm)
DIRECTION TO PERSONS IN CONTROL OF
COASTAL LAND OR PREMISES
For purpose of removing, or reducing a risk to safety or of
pollution following an accident
Direction to grant access or facilities in relation to any
ship, anything which is or was on the ship including any
person
Includes:
* Permitting persons to land
* Making facilities available for undertaking
repairs or other works
* Making facilities available for the landing, storage and
disposal of cargo or of other things
SOSREP Considerations
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Risk to safety primacy;
Actions taken to date;
Damage Assessment/structural integrity;
Threat from bunkers & cargo
Future intentions;
Potential place of refuge –
Resolution A.949(23) GUIDELINES ON PLACES
OF REFUGE FOR SHIPS IN NEED OF ASSISTANCE
The drama continues…
SCOPIC OVERVIEW
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Safety net
Limit for property insurers
Established basis of calculation
Role of the SCR
The drama continues…
Email to brokers
Dear Gordon and Gavin,
Latest news is that the ship has split completely with the forward
part having sunk in reasonably shallow water. Salvors are
holding the aft part on station but there appears to be fuel
leakage so SOSREP is refusing permission to go into Skegness
until this is brought under control. Salvors have invoked SCOPIC
at this point. We also seem to have some questions about
containers which may not have been correctly declared as the
salvors are reporting some odd hissing and chemical smell.
Can you advise all insurers and obtain their comments and
instructions please.
The drama continues…
Quick recap
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Vessel has split
Stern afloat
Forward section not
SCOPIC invoked
SOSREP involved
Answer
• Correct answer is B
• To be an ATL she needs to cease to be a thing
of the kind insured
• Which is more than just breaking up
The drama continues…
Place of Refuge / Public & Media perception &
expectations
• Need for all parties, in particular Svitzer, IMCC,
the Environment Group and the SOSREP to be
seen to be working together;
• SOSREP decision making free from political
interference but beneficial to be open and
proactive with media, public & other parties re
potential threats, mitigation measures in place
and future plans;
• SOSREP will request media strategy group and
will address media.
Command and Control
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SOSREP will establish a Salvage Control Unit
(SCU) and will invite core members:
SOSREP + personal specialist advisor(s)
Salvage Manager
Owners/ Insurers Representative
Port
Environment Group Liaison Officer
MCA CPSO and/or Coastguard Liaison Officer
The drama continues…
Answer
The drama continues…
TEU values
• a. Very unlikely to find such low values on a
main line trade.
• b. Probable – slightly higher than the
accepted average of US$26k per TEU.
• c. Unlikely for an Eastbound service, subject
to review of manifest
Uninsured cargo
• C is most likely figure for this trade
SALVAGE SECURITY
• Calculating the demand
– Costs incurred
– Likely award
– Estimating values
– How much do salvors hope to get
The drama continues…
NOA required?
• ITCH is subject to MIA 1906 and s62 says NOA
must be given in most circumstances.
• The Nordic Plan says:
“Clause 11-5. Request for condemnation
If the assured wishes the ship to be condemned, he
must submit a request to the insurer without undue
delay after the ship has been salvaged and he has had
an opportunity to survey the damage. This request may
be withdrawn as long as it has not been accepted by
the insurer.”
The drama continues…
The Nancy
• [2013] EWHC 2116
• Failure to disclose past PSC detentions unlikely
to be non-disclosure per MIA 18 – test of
inducement applied.
• On-line information (Sea-web) does not
necessarily give rise to a presumption of
knowledge for the insurer.
• “Warranted vessels ISM Compliant” is a
documentary requirement
The drama continues…
How many lawyers?
• Likely Lawyers may be acting for
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Boxship
Hull insurers
Time Charterers
6 different Slot Charterers
Dublin September
Windfarm Owners
Skegness Port Authority
Owners of vessels delayed at Skegness
Local oyster beds
Cargo interests (10+)
Wife of deceased MEP
25 at
least!
SECURITY COLLECTION
• Security collection issues
– Quality
– Maintaining the lien
– Avoiding loss of value
– Abandoned cargo
The drama continues…
Smelly cargo
The drama continues…
Steel prices
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Poland
Portugal
Germany
Romania
Turkey
Singapore
Dubai
China
Price per Kilo (US$)
4.00
9.00
12.00
2.50
3.00
3.50/4.00
3.50/4.00
0.95
Repair quotes
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Poland US$55m
Portugal US$65m
Turkey US$45m
RomaniaUS$40m
175 days
150 days
200 days
250 days
Claims Rus Email
• Thanks yours regarding the CTL position. The
quotes will need further analysis but it would
be reasonable to take a figure of say US$60m
to cover repair costs and all incidentals.
• This falls well below the Insured Value of
US$100m which is the benchmark according
to Clause 19 of ITC Hulls.
Claims Rus email
• We can of course bring in ship’s proportion of
GA and salvage but given the values this does
not help! Assuming a figure of USD 40M
• Ship
• Cargo
USD 10M pays USD 2.08M
USD 182M pays USD 37.92M
USD 192M pays USD 40M
This only gives USD 62.08M
Claims RUs
• The Nordic Plan says:• “Clause 11-3 Condemnation
• The assured may claim compensation for a total loss if the
conditions for condemnation of the ship are met.
• The conditions for the condemnation are met when casualty
damage is so extensive that the cost of repairing the ship will
amount to at least 80% of the insurable value, or of the value
of the ship after repairs of the latter is higher than the
insurable value
• Unless the figures are way out we cannot
presently see a CTL on either policy.
The drama continues…
Repair cost reality check
The drama continues…
Claims Rus email
To IMCC (Tristan)
Thanks yours. These are complex issues you will
need to also talk to your club about, but in
outline:1.The vessel is still under LOF so it is likely that
ship and cargo remain in peril until all or most
of the cargo comes off. In that case the cost of
discharge will be GA.
Claims Rus email
2.If the voyage is frustrated because the
vessel is a commercial total loss, all GA
allowances stop on the date the voyage is
abandoned or completion of discharge of
cargo – whichever is the later.
3.After that, further storage and transhipment
to destination becomes cargo’s problem – or
rather their insurers under the Forwarding
Charges Clause in the Institute Cargo Clauses.
Claims RUs
• These are just the initial positions – ultimately
where the costs end up depends on whether
there has been an actionable fault on the part
of the carrier – that’s where the Club comes
in.
Best regards
Claims RUs
The drama continues…
Unrepaired damage
Clause 18 says it is the reasonable depreciation in the
market value, not exceeding the reasonable cost of
repairs.
SMV
DMV (scrap)
US$50m
10m
US$40m = claim
Norplan position
Norplan Clause 12-2 says:“Compensation is calculated on the basis of the
estimated reduction in the market value of the
ship due to the damage at the time of expiry, but
shall not exceed the estimated costs of repairs.
Estimated common expenses are not
recoverable, except for 50% of estimated dock
and quay hire.”
c.
About the same
Bit more on SCOPIC
SCOPIC calculations
SCOPIC falls below the Article 13 award so there is no liability for the
Club. Salvors incur a penalty of 25% of the difference. Property pays:Article 13 award
Less 25% of the difference US$25m – US$20m
Property pays net
US$25,000,000
1,250,000
US$23,750,000
SCOPIC calculations
c. Both
SCOPIC expenses
Property pay ART 13
Club pays balance
US$20,000,000
15,000,000
US$5,000,000
If only we had more time…
a.
b.
c.
d.
e.
e.
Limitation of liability by shipowner and/or time
charterer.
Handling of dangerous goods or “ordinary”
goods that become dangerous; treatment of
enhanced costs.
Recovery actions – where next?
Access to and inspection of cargo
Disposal of worthless cargo and debris in
holds
Funding for repairs
What does everyone want?
Megabox person
Skegness person
Cargo receiver
To do list
• Megabox and charterers have to co-operate
over:– discharging and forwarding cargo.
– Providing ISU2 to salvors and arranging collection
of security and destination.
• Salvors need to agree ISU2 and arrange lien
insurance on the cargo.
• H&M and LOH insurers need to review the
repair options with owners and Braemar to
come up with a sensible compromise.
The end, or is it?
Credits
• The IMCC players
• The RHL team