Meaning of ‘similar amendment’ in cl.8(b) of 1996 Inter-Club Agreement

Agile  Holdings Corporation v Essar Shipping Ltd [2018] EWHC 1055 (Comm) is a recent decision on the meaning of “similar amendment” in cl.8(b) of the 1996 Inter-Club Agreement (‘ICA’), in favour of the claimant shipowners, represented by IISTL’s Simon Rainey QC.

The “Maria” was time chartered for a single trip from Tunisia to India via Trinidad, carrying a consignment of direct reduced iron (“DRI”) which is  highly reactive and combustible in the presence of heat or water. During loading the cargo onto the vessel by means of a conveyor belt at Port Lisas, Trinidad, the belt was seen to have caught fire, but the appointed supercargo inspected the holds and advised that loading could continue. The cargo was still on fire during the voyage and cargo interests, an associated company of the charterers, brought a claim against the shipowners. In turn, they claimed a 100% indemnity from the charterers under the Inter-Club Agreement 1996 which was incorporated into the charter. The charter was on NYPE 1946 form, with an unamended cl.8, so under cl.8(b) of the ICA owners would be entitled to a 100% indemnity in respect of claims “in fact arising out of the loading, stowage, lashing, discharge, storage or other handling of cargo”.

The clause contains the proviso “ unless [1]  the words “and responsibility” are added in clause 8 [of the NYPE form]” to which the 1996 form added the words  “or there is a similar amendment making the Master responsible for cargo handling”, in which case a 50/50 split applies. Charterers pointed to cl.49 which provided “The Stevedores although appointed and paid by Charterers/Shippers/Receivers and or their Agents, to remain under the direction of the Master who will be responsible for proper stowage and seaworthiness and safety of the vessel…” and argued that this constituted a ‘similar amendment’. Charterers argued that  this would transfer back responsibility to the owners that aspect of cargo handling which was in fact in issue in the particular case. His Honour Judge Waksman QC rejected this, and held the required “similar amendment” must be one which would have the same effect as the addition of the words “any responsibility” and therefore, connotes the transfer of all aspects of cargo handling generally back to the Owner. He went on to observe that Clause 49 only transferred back responsibility for stowage, and probably only stowage affecting the seaworthiness or safety of the vessel. A transfer back of stowage only did not connote any transfer back of other cargo handling responsibilities.

Published by

Professor Simon Baughen

Professor Simon Baughen was appointed as Professor of Shipping Law in September 2013 (previously Reader at the University of Bristol Law School). Simon Baughen studied law at Oxford and practised in maritime law for several years before joining academia. His research interests lie mainly in the field of shipping law, but also include the law of trusts and the environmental law implications of the activities of multinational corporations in the developing world. Simon's book on Shipping Law, has run to five editions and is already well-known to academics and students alike as by far the most learned and approachable work on the subject. Furthermore, he is now the author of the very well-established practitioner's work Summerskill on Laytime. He has an extensive list of publications to his name, including International Trade and the Protection of the Environment. He has also written and taught extensively on commercial law, trusts and environmental law. Simon will be a member of the Institute of International Shipping and Trade Law, a University Research Centre within the School of Law, and he will teach on both the LLM (Carriage of Goods by Sea, Land and Air and Oil and Gas Law) and LLB programmes at Swansea.

Leave a Reply