Insights

The historic doctrines of champerty and maintenance, which essentially prohibit third-party litigation and arbitration funding, have been amended and/or phased out in a number of jurisdictions, including England and Wales.  Hong Kong has recently taken steps to relax its laws by amending the existing legislation to permit contingency based fee arrangements in the majority of arbitration proceedings (except those relating to criminal or family matters).

The CII regulations come into force on 1st January, 2023 and will rate ships A, B, C, D or E on the basis of the intensity of their carbon emissions. The way that a ship is operated (speed, amount of cargo, number of voyages etc) will of course have a large impact on a ship’s carbon intensity, so owners and time charterers have for some time been grappling with how to allocate risk and responsibility for this issue. To assist with the issue, BIMCO has published its CII Operations Clause for Time Charter Parties 2022. The clause is long, some four and half pages, but the basic structure of rights and responsibilities is reasonably clear. However, there remain several outstanding issues, primarily relating to sub-clauses (g) and (i) which we consider further in this insight.

In time charterparties, it is common to find a clause along the following lines: “Vessel’s holds on arrival at first load port(s) to be clean, dry, free of rust and/or scale and cargo residues and ready in all respects to load any/all permissible cargoes under the charterparty to the satisfaction of charterers’ nominated surveyor. If the vessel is not approved by the surveyor, the vessel is to be placed off-hire from the time of that failure until the vessel has passed a subsequent survey” In other words, this is a “period off-hire clause” placing the ship off-hire from the time of a failed inspection until a successful re-inspection, regardless of whether or not there is a net loss of time to the service required of the ship (i.e. loading) because of the failed inspection. Such a clause was recently considered in London Arbitration 9/22.

On 6th October, 2022 the EU adopted an eighth package of sanctions against Russia. The relevant legislation can be found here.  In particular, Council Regulation (EU) 2022/1904 (“the Regulation”) amending Regulation (EU) No 833/2014, includes a number of additional restrictive measures.

Although there has been a welter of material generated in relation to the effects of Covid on a variety of shipping contracts, very little if anything has been said about its effects on the sale and purchase of second hand ships. That is surprising given the obvious difficulties which the pandemic created and continues to create in respect of the delivery of ships at the contractual place of delivery or within the contractual delivery range. It is also notable that no maritime body has attempted to draft a standard clause for incorporation into sale contracts.