Insights

In this edition of our “Sulphur Series”, we look in more detail at the practical steps that will need to be taken in order to prepare ships without scrubbers for the switchover to low sulphur fuel on 1st January, 2020. We also consider how the allocation of responsibilities and costs related to such steps might be dealt with contractually.

Following the introduction in 2018 of new biofouling regulations for ships visiting New Zealand, Intertanko have now issued practical guidance to owners which addresses and clarifies some of the issues relating to the new requirements. As these relatively stringent new regulations present a number of technical, commercial and practical implications for owners and charterers, Members are recommended to take note of all available guidance and take protective measures to minimise disruption under charterparties.

In the wake of Vale’s declaration of force majeure following the recent collapse of one of its Brazilian dams, it is timely to consider some of the principles involved in force majeure cases, as illustrated by the case of Classic Maritime Inc v Limbungan Makmur SDN BHD [2018] EWHC 2389 (Comm). In that case, three particular points of general interest in relation to force majeure clauses were considered: construction and causation; alternative modes of performance; and the relevance of a force majeure clause to the assessment of damages. Incidents such as these can have significant contractual repercussions and it is worthwhile taking time to ensure that any force majeure clauses will afford parties the desired protection.

On 28th January, 2019, the US issued sanctions against Petróleos de Venezuela, S.A. (PdVSA). Under Executive Order (EO) 13857 the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) included PdVSA as part of the “Government of Venezuela”. Therefore, it was designated as a Specially Designated National (SDN) and transactions involving PdVSA may be subject to US sanctions. Members are recommended to exercise caution when trading with PdVSA.

As an alternative to switching to cleaner, yet more expensive, low sulphur fuel some ship operators have chosen to achieve compliance with the MARPOL sulphur emissions regime by means of the installation of exhaust gas cleaning systems, commonly known as scrubbers, which will enable them to filter non-compliant fuel at a lower cost.