Transcript THE PIRAEUS BUNKER COURSE [DATE] LEGAL ASPECTS OF …

The Hidden Dangers
Lessons to be learned in dealing
with major casualties.
Presented by
Julian J Clark &
Filippo Lorenzon
8 October 2012
The Aconcagua
Size: 2226 TEU
2nd Maiden voyage
Liner service Far East to USA and South America
The Aconcagua
28
November 1998, a cargo of 334 kegs of calcium hypochlorite in a container
shipped on board at Busan, South Korea, to San Antonio, Chile.
bill described the cargo as “one container said to contain Calcium
Hypochlorite 65 per cent” and stated: “IMO: 5.1. UN: 1748 PG: 5137”. The bill
incorporated the Hague Rules.
The
The
box was stowed in No 3 hold surrounded on three sides by a bunker tank.
The
vessel carried out cargo operations at Keelung, Hong Kong and LA.
On
30 December 1998:
The Aconcagua
The
bunker tank in No 3 hold had been heated during the voyage in
order to allow a transfer of bunkers for fuel oil.
What
next?
1. Arbitration: Owners-Charterers
Owners commenced arbitration against charterers under the charterparty.
The arbitrators made an interim award, after which charterers reached a
settlement with the shipowners and paid US$27,750,000.
The Aconcagua
2. Court proceedings: Charterers-Shippers in the High Court
Charterers claimed against the shippers of the CH, for breach of the contract
contained in or evidenced by the bill of lading in respect of the container.
Charterers
claimed the CH had, unknown to it, an abnormally high thermal instability,
being prone to self-heat at ordinary carriage temperatures. As a result it exploded on
board the Aconcagua at temperatures which were ordinarily to be expected onboard that
vessel during the voyage.
Shippers
contended that the cargo shipped was not abnormal or, at least, had not been
shown to be so. In stowing the container in a position where it was surrounded on three
sides by a bunker tank, charterers was in breach of its duty under Article III, Rule 2.
Christopher Clarke J: Charterers were entitled to indemnity!
The Aconcagua
3. Court proceedings: Shippers-Charterers in the Court of Appeal
Shippers appealed.
But Christopher Clarke J was upheld by Longmore LJ in the Court of
Appeal @ [2010] EWCA Civ 1403; [2011] 1 Lloyd’s Rep 683.
As a result…






Over 10 years of litigation
Arbitration lasting 6 weeks
2 High Court decisions
1 Court of Appeal decision
New Law/First ever Limitation Fund in Chile
Complex enforcement proceedings
Lessons to be learned…

While for the purposes of this presentation
we are dealing with a Dangerous Goods
case, which are often the most complex and
expensive to run, the lessons apply equally
to all major casualty cases.
Lessons to be learned…

Collation and presentation of evidence is crucial

Selection and control of experts and legal team

200% attention to detail

A ‘weather eye’ on tactical position
The Casualty Management Check
List
Collation and Preservation of
Evidence

Physical Evidence - Cargo samples

Electronic Evidence – Email, Bapli and Electronic files

Safety management system (SMS)

ECDIS, DAGO

Crew evidence (look in unusual places/fuel gauges)

Word on disclosure
Selection and Control of legal team

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
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Do not re-invent the wheel
Out of box thinking on expert selection
Value of experimentation (Holland v
Wolfe/Australian explosions)
Experts duties / 2 + 2 = 5
Tail wagging the DOG
200% ATTENTION on detail &
Weather Eye on tactical position

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Casualties gather their own momentum
Beware insider fighting
Use of contractual inconsistencies as a defence
Costs as an incentive to settle
Evidence is King
Forum Shopping
Mediation & ADR
CONCLUSION
•
Expensive Complex and can easily run wild!
•
Key issue: Evidence/ Teams / Analysis – E.T.A
•
Protection of rights of re-course (Art IV Rule 6)
The Hidden Dangers
THANK YOU
Julian J Clark
[email protected]
Filippo Lorenzon
[email protected]