Spain says ‘manana’ to time limits for the duration of its lockdown

 

On the 14th March 2020, the Spanish legislature published Royal Decree 463/2020 declaring a state of alarm throughout Spain as a result of the COVID-19 pandemic. One of the exceptional measures under the Fourth Additional Provision was the suspension of the time periods for the application of the statute of limitations and expiration of actions and rights.

This continues until 24 May unless the Spanish Parliament approves a further lockdown extension. At this date, the time limits will be revived for the equivalent time that was left to run prior to the 14th March. Where the time limit was due to expire after 24 May (or any later end to lockdownt) the majority view of legal experts is that it will be extended by the duration of the lockdown.

The Spanish Government is currently seeking to extend the lockdown for a further month.

 

 

No maritime lien against demise chartered vessel for claim for disbursements made to vessel on time charterer’s orders.

 

The Irish Court of Appeal has recently decided in The Almirante Storni [2020] IECA 58 that a claim against the demise charterer by a ship’s agent in respect of  disbursements made to the vessel on the orders of the time charterer does not constitute a “maritime claim” within the meaning of article 1 of the International Convention for the Unification of Certain Rules Relating to the Arrest of Sea-Going Ships done at Brussels on 10 May 1952 (The Arrest Convention). Insofar as the claim involved “disbursements” they were not disbursements made by the master but by the ship’s agents.

Article 1(n) of the Arrest Convention did not entitle an agent to maintain a claim against the owner of the vessel for disbursements made by such agent “on behalf of a ship”, in the absence of any personal liability on the part of the owner. The argument that the time charterer ordered services from the plaintiff as agent of the owners was not tenable. There was no evidence of any actual or ostensible authority to support a finding of agency.

 

Brexit and civil jurisdiction. EU unlikely to consent to UK joining the 2007 Lugano Convention in time for the end of the implementation period.

 

Once the news was all “Brexit, Brexit, Brexit”. Halcyon days. Now it is nothing but the public health emergency. Except, there are still a few pieces of news about Brexit. One of which concerns the arrangements for civil jurisdiction and enforcement of judgments between the UK and the EU Member States after 1 January 2021.

Absent an agreement with the EU on jurisdiction, the UK will revert to its common law rules on jurisdiction on 1 January 2021. This assumes that the UK does not avail itself of the opportunity under the EU Withdrawal Agreement to seek an extension to the implementation period by the end of June, something Mr Johnson has repeatedly stated he will not do, and something which has been specifically ruled out in the statute implementing the Withdrawal Agreement. But there are two other civil jurisdiction regimes to which the UK can become a party, and that is certainly the government’s intention.

The first is the 2005 Hague Convention  on Choice of Court Agreements 2005 (Hague Convention), which came into force as between the Member States and Mexico on 1 October 2015 (for intra EU matters the Recast Regulation prevails).  The Convention deals with exclusive jurisdiction clauses in favour of a Contracting State and for recognising and enforcing judgments within Contracting States in respect of contracts with such clauses. The Convention does not apply to contracts for the carriage of goods ( bills of lading and voyage charters) or passengers, although it would apply to time charters and demise charters. The EU has exclusive competence over anything jurisdictional, and agreements with third party states must be made by the EU acting on behalf of the Member States – hence it was the EU that ratified the 2005 Hague Convention and not the Member States. The UK government previously submitted its accession to this back in December 2018, to come into effect on ‘exit day’, but this has, for the time being, been withdrawn. Doubtless it will re-accede in September to allow for the UK to join the Convention in its own right as of 1 January 2021.

The second is the 2007 Lugano Convention between the EU and three third states, Norway, Iceland and Switzerland. This is basically the original 2001 Brussels Regulation, an inferior regime to the 2012 Recast version, but better than nothing. On 8 April the UK applied to join the Lugano Convention. For this to happen the consent of all the existing contracting parties must be forthcoming. The three third states seem quite happy about this but what about the EU? The signs are that it is not going to consent to the UK’s application.

An article in today’s FT states “EU diplomats said the European Commission had advised the bloc’s member states earlier this month that a quick decision was “not in the EU’s interest”. The diplomats said the commission raised the issue during a meeting with EU member-state officials on April 17, saying that granting the request would be a boon for Britain’s legal sector. A commission official told the meeting there were other international rules that Britain could use as a fallback, and that current signatory countries were all part of the EU’s single market, the diplomats said. With the UK determined to leave the single market after the transition expires, the commission “will surely not make a positive recommendation,” said one national official who took part in the meeting.”

Fixture recap “otherwise as clean Gencon 94 charterparty to be amended/altered as per above main terms agreed”. Are Gencon 94 law and arbitration provisions brought into the charter?

 

In London Arbitration 2/20 a fixture recap set out detailed provisions and concluded “otherwise as clean Gencon 94 charterparty to be amended/altered as per above main terms agreed”. The charterers argued that the law and arbitration provisions in cl. 19(a) of Gencon 94 was not a “main term” agreed in the recap email and was not incorporated into the charter. The tribunal rejected this argument and held that the  concluding words of the recap meant that one should take a clean Gencon 94 form and write into it what “main terms” had been agreed. The parties  had agreed considerable details as set out in the recap email, and then incorporated the terms of the Gencon 94 charter, which were to be adjusted to reflect the detail agreed. The tribunal accordingly had jurisdiction

 

Climate change and tort. The jurisdictional battlefield in the US.

This blog recently featured a New Zealand decision in a strike out application in a climate change tort suit. Similar claims have also been a feature of litigation in the State courts in the US in the last few years. Why not in the federal courts? The reason goes back to two previous decisions: the decision of the Supreme Court in American Electric Power Co. v. Connecticut, 131 S. Ct. 2527 (2011) (AEP),  and that of the Ninth Circuit in Native Village of Kivalina v. ExxonMobil Corp., 696 F.3d 849 (9th Cir. 2012), that such actions, at least when they relate to domestic GHG emissions caused by the defendant, are pre-empted by the Clean Air Act.

So, various municipalities have decided to sue in the State courts, claiming damages for what they estimate they will have to spend to mitigate the effects of climate change in future years. The oil majors who have been on the receiving end of these suits have sought removal of the cases to the Federal courts, where they will be dismissed. So far, the position on this is mixed.

The claims by the Cities of New York and Oakland saw their State law claims transferred to the Federal courts because of the interstate nature of the claims. Once there, Oakland sought, unsuccessfully, to distinguish Kivalina and AEP on the grounds that those decisions involved emissions directly from activities of the defendants, rather than by virtue of their sales of fossil fuels to third parties who then burn it and cause GHG emissions. This was not enough to distinguish the cases, and a further attempt, based on the effect of worldwide sales outside the reach of the Environmental Protection Agency and the Clean Air Act, also failed, running into the presumption against extraterritoriality. A further reason for dismissing the claims was that they implicated the interests of foreign and domestic governments and that the balancing of interests involved in the analysis of unreasonable interference in a public nuisance suit was best left to governments. New York has appealed the decision, as has Oakland.

By contrast, Baltimore’s tort claims in the State Court of Maryland have managed to stay there. The claims were not based on federal common law and the Clean Air Act did not show congressional intent for it to provide the exclusive cause of action, and indeed the Act contains a savings clause specifically preserving other causes of action. The Defendants then unsuccessfully applied to the Supreme Court for a stay, pending the hearing of their appeal.

On 6 March 2020 the Fourth Circuit declined to transfer the claims to the Federal Courts. They decided that the appeal was limited under 28 U.S.C. § 1447(d) to an appeal based on the Federal Officer Removal statute, one of the eight grounds for transfer argued by the Defendants in the District Court. The Statute,  U.S.C. § 1442, authorizes the removal of cases commenced in state court against “any officer (or any person acting under that officer) of the United States or of any agency thereof, in an official or individual capacity, for or relating to any act under color of such office…”  The Defendants argued that the statute applied because the City “bases liability on activities undertaken at the direction of the federal government”, pointing to three contractual relationships between certain Defendants and the federal government: (1) fuel supply agreements between one Defendant (Citgo) and the Navy Exchange Service Command (“NEXCOM”) from 1988 to 2012; (2) oil and gas leases administered by the Secretary of the Interior under the OCSLA; and (3) a 1944 unit agreement between the predecessor of another Defendant (Chevron) and the U.S. Navy for the joint operation of a strategic petroleum reserve in California known as the Elk Hills Reserve.

The Fourth Circuit held that none of these relationships could justify removal, either because they failed to satisfy the acting-under prong or because they were insufficiently related to Baltimore’s claims for purposes of the nexus prong.

On 31 March 2020 the Defendants submitted a petition for certiorari to the US Supreme Court. on the question whether 28 U.S.C. § 1447(d) permits a court of appeals to review any issue encompassed in a district court’s order remanding a removed case to state court where the removing defendant premised removal in part on the federal-officer removal statute, 28 U.S.C. § 1442, or the civil-rights removal statute, 28 U.S.C. § 1443.

In another suit, by San Mateo, the Defendants have appealed against the District Court’s decision not to transfer the suit from the California State Court. The appeal was consolidated with Oakland’s appeal. On 5 February 2020 the Ninth Circuit heard oral argument. They were later informed of subsequent developments in the Baltimore case.

A further success for the municipalities was in the Rhode Island suit, now subject to an appeal to the First Circuit.

It is, therefore, possible that at least one of these tort suits will see the light of trial in the next year or so. When that happens, expect some interesting arguments on causation and damages.

What is an ‘international case’ in Denmark? Indemnity claim for cargo damage heard in Denmark despite exclusive jurisdiction in favour of High Court in London.

 

An interesting decision from Denmark, noted recently by WSCO Advokatpartnerselskab https://www.lexology.com/library/detail.aspx?g=6d6b72da-f890-4cf3-9075-21752902d70e

 

Pursuant to a contract to carry containers from China to Denmark, the Danish importer booked carriage with Danish freight forwarder who sub contracted to a Danish shipping company under an agreement made in Shanghai by the parties’ respective Chinese subsidiaries. The shipping company issued a waybill naming the forwarder as consignee. This contained an exclusive jurisdiction clause in favour of the High Court in London. The importer sued the forwarder and its insurers in the Danish High Court for loss of three containers in rough weather during the voyage, and the forwarder then sought an indemnity under the waybill from the shipping company. The Danish shipping line sought to a have the indemnity dismissed by reference to the exclusive jurisdiction clause.

One would have thought the shipping line’s application for dismissal would be a dead cert under Article 25 1 of the 2012 Brussels Regulation (Recast) which provides.

If the parties, regardless of their domicile, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction, unless the agreement is null and void as to its substantive validity under the law of that Member State. Such jurisdiction shall be exclusive unless the parties have agreed otherwise.

The agreement conferring jurisdiction shall be either: (a) in writing or evidenced in writing; (b) in a form which accords with practices which the parties have established between themselves; or (c) in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.

The Danish Court held that the jurisdiction agreement would prevail over the mandatory rules in the Danish Merchant Shipping Act if the contract of carriage were international in nature. But this was not the case here, given that both the shipping company and the freight forwarder are Danish companies with their head offices in Denmark and that the place of delivery of the goods is in Copenhagen where the importer was domiciled. So the case proceeds in the Danish High Court

 

Two new cases on vicarious liability from the UK Supreme Court on Wednesday, 1 April.

 

Two Supreme Court decisions this week which seem to mark a retreat in the process of expanding the scope of vicarious liability seen since 2012 in the “Christian Brothers” case.

  1. Barclays Bank plc (Appellant) v Various Claimants (Respondents)

[2020] UKSC 13

 

Claims were made against Barclays in respect of claims of sexual assault  by Dr Bates during unchaperoned medical examinations in a consulting room in his home. Barclays required job applicants to pass a pre-employment medical examination as part of its recruitment and employment procedures. Dr Bates was a self-employed medical practitioner whose work included conducting medical assessments and examinations of prospective Barclays employees.

The Supreme Court has reversed the finding of the first instance judge, upheld by the Court of Appeal, that Barclays was vicariously liable for Dr Bates’ alleged assaults.

There are two requirements for a finding of vicarious liability. First, there must be a relationship between the two persons which makes it proper for the law to make one pay for the fault of the other. Second, there must be a sufficient connection between that relationship and the wrongdoing of the person who committed the tort. The case concerned the first element. A person can be held vicariously liable for the acts of someone who is not their employee, provided the relationship between them is sufficiently akin or analogous to employment. However, the classic distinction between employment (and relationships that are akin or analogous to employment) on the one hand, and the relationship with an independent contractor on the other hand, remains.

In in Various Claimants v Catholic Child Welfare Society [2012] UKSC 56 (the “Christian Brothers “case) Lord Phillips referred to five factors that may help to identify a relationship which is sufficiently analogous to employment to make it fair, just and reasonable to impose vicarious liability. However, where it is clear that the person who committed the tort is carrying on his own independent business, it is not necessary to consider the five incidents

The key question is whether the person who committed the tort is carrying on business on his own account, or whether he is in a relationship akin to employment with the defendant. This was not the case here. Dr Bates was not at any time an employee or anything close to an employee of Barclays, but was in business on his own account as a medical practitioner, with a portfolio of patients and clients. He did work for Barclays, which made the arrangements for the medical examinations and chose the questions to which it wanted answers, but much the same would be true of window cleaners or auditors. Dr Bates was not paid a retainer, which might have obliged him to accept a certain number of referrals from Barclays. He was paid a fee for each report and was free to refuse to conduct an offered examination. He would have carried his own medical liability insurance

 

  1. WM Morrison Supermarkets plc (Appellant) v Various Claimants (Respondents) [2020] UKSC 12

 

This case involved the second limb of the vicarious liability test, the need for a sufficient connection between that relationship and the wrongdoing of the person who committed the tort. The claim involved a disgruntled employee, one Skelton, had received a verbal warning after disciplinary proceedings for minor misconduct and bore a grievance against his employer thereafter. In November 2013, he undertook the task of transmitting payroll data for the Supermarket’s entire workforce to its external auditors, as he had done the previous year. In doing this he made and kept a personal copy of the data which he then uploaded in a file to a publicly accessible filesharing website, as well as distributing the file anonymously to three UK newspapers, purporting to be a concerned member of the public who had found it online. Some of the affected employees then sued the Supermarket for breach of statutory duty under the Data Protection Act 1998, misuse of private information, and breach of confidence, both personally and on the basis of vicarious liability for its employee’s acts.

At first instance, and in the Court of Appeal, it was held that the Supermarket was vicariously liable as Skelton had acted in the course of his employment. The Supreme Court overturned the decision.

What had to be established was first, what functions or “field of activities” the employer had entrusted to the employee, and then whether there was sufficient connection between the position in which he was employed and his wrongful conduct to make it right for the employer to be held liable.

In this case, the online disclosure of the data was not part of Skelton’s “field of activities”, as it was not an act which he was authorised to do. The satisfaction of the factors referred to by Lord Phillips in the Christian Brothers case was only relevant to the first question, the relationship between wrongdoer and defendant was sufficiently akin to employment for vicarious liability to subsist, and not with whether  the employee’s wrongdoing was so closely connected with their employment that vicarious liability ought to be imposed. What was highly material was whether Skelton was acting on his employer’s business or for purely personal reasons.

Skelton’s case bears many similarities with Mohamud [2016] AC 677, where a customer at a petrol station had an angry confrontation with the petrol station attendant, who wrongly suspected him of trying to make off without payment. The customer was enraged at how the attendant had spoken to him and after paying he flagged down a passing police car and complained about the attendant’s conduct. The customer and the police returned to the petrol station where the officer listened to both men and indicated that he did not think that it was a police matter. The customer said that he would report the attendant to his employer and as the officer was on the point of leaving, the attendant punched the customer in the face. The Supreme Court found that the petrol station was vicariously liable for the assault by its attendant.

In the instant case, Lord commented on the fact that the function of the attendant in Mohamud was to deal with his employer’s customers and the assault was the culmination of a sequence of events which began when the attendant was acting for the benefit of his employer. In contrast, Skelton was not engaged in furthering his employer’s business when he committed the wrongdoing in question, but, rather, was pursuing a personal vendetta against them. Although authorised to transmit the payroll data to the auditors, his wrongful disclosure of the data was not so closely connected with that task that it could fairly and properly be regarded as made by Skelton while acting in the ordinary course of his employment. The fact that his employment gave him the opportunity to commit the wrongful act was not sufficient to warrant the imposition of vicarious liability. An employer would not normally be vicariously liable where the employee was not engaged in furthering his employer’s business, but rather was pursuing a personal vendetta.

 

EU to get tough on GHG emissions from shipping?

 

In October 2014, the EU set domestic GHGs reduction target of at least 40% below 1990 levels by 2030. Shipping is currently outside those targets with climate change regulation for international shipping being parked in the slow lane in the International Maritime Organization. That may be about to change over the next two years.

 

  1. COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS The European Green Deal Brussels, 11.12.2019 COM(2019) 640 final

 

The Commission indicated that it would be looking at measures extending the emissions trading system (ETS) to shipping and would look closely at the current tax exemptions including for aviation and maritime fuels and at how best to close any loopholes will take action in relation to maritime transport, including to regulate access of the most polluting ships to EU ports and to oblige docked ships to use shore-side electricity.

 

  1. On 4 March 2020 the Commission proposed a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing the framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (European Climate Law) under which, by September 2020, the Commission would review the Union’s 2030 target for climate referred to in Article 2(11) of Regulation (EU) 2018/1999 in light of the climate-neutrality objective set out in Article 2(1), and explore options for a new 2030 target of 50 to 55% emission reductions compared to 1990.

 

  1. On 24 January 2020 Green MEP, Jutta Paulus, as Rapporteur for the European Parliament’s Committee on the Environment, Public Health and Food Safety produced a draft report (COM(2019)0038 – C8-0034/2019 -2019/0017(COD)) on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) 2015/757 in order to take appropriate account of the global data collection system for ship fuel oil consumption data. The report recommends the following amendments to the 2015 MRV Regulation ((Regulation (EU) 2015/757 on the monitoring, reporting and verification of carbon dioxide emissions from maritime transport, and amending Directive 2009/16/EC)):

– the inclusion of maritime transport in the ETS;

– the establishment of a maritime transport decarbonisation fund to foster research and development in the energy efficiency of ships and support investments in innovative technologies and infrastructure to decarbonise maritime transport, including short sea shipping and ports, and the deployment of sustainable fuels. The fund would be established for the period from 2021 to 2030 and would be financed from revenues of the ETS;

– Establishing a target of reduction of CO2 emissions per transport work by at least 40 % by 2030 over the first reporting year of the MRV, 2018;

– The extension of the scope of the amended regulation to all GHG emissions, especially methane, from ships of 5000 grt or above. The amended regulation would cover GHG emissions released during voyages of such ships from their last port of call to a port of call under the jurisdiction of a Member State and from a port of call under the jurisdiction of a Member State to their next port of call, as well as within ports of call under the jurisdiction of a Member State;

– The Commission to set targets for member states for deployment of shore side electricity.

 

These proposed changes to EU law may make last year’s anxiety over the IMO’s Sulphur Cap come to seem like very small beer indeed.

Another cautionary time bar tale for owners. Do copies of bills of lading need to be submitted to support demurrage claims?

 

This was the question before Robin Knowles J in Tricon Energy Ltd v MTM Trading LLC [2020] EWHC 700 (Comm).  The MTM Hong Kong was voyage chartered on an amended Asbatankvoy form for a voyage from Antwerp to Houston. The most relevant provisions of the Charterparty were as follows:

By clause 10:

“Laytime/Demurrage

… …

(e) If load or discharge is done simultaneously with other parcels then laytime to be applied prorate between the parcels.

(g) In the event of Vessel being delayed in berthing and the Vessel has to load and / or discharge at the port(s) for the account of others, then such delay and/or waiting time and /or demurrage, if incurred, to be prorated according to the Bill of Lading quantities”.

 

By clause 12:

“Statement of Facts

Statement of facts must be signed by supplier or receiver, respectively. If they refuse to sign, the Master must issue a contemporaneous protest to them. Owner shall instruct each port agent to release port information to Charterer on request and to forward to Charterer the statement of facts and N.O.R. as soon as possible after Vessel has completed loading or discharge there”.

 

By clause 38:

“Time Bar Clause

Charterer shall be discharged and released from all liability in respect of any claim/invoice the Owner may have/send to Charterer under this Charter Party unless a claim/invoice in writing and all supporting documents have been received by Charterer within 90 days after completion of discharge of the cargo covered by this Charter Party or after other termination of the voyage, whichever occurs first. Any claim/invoice which Owner may have under this Charter Party shall be waived and absolutely barred, if claim/invoice and all supporting documents are not received by Charterer before the time bar”.

 

The owners made their claim and submitted supporting documentation within 90 days of completion of discharge, but did not include copies of the bills of lading.

 

The statement of facts provided did not accurately record the bill of lading quantities, at least insofar as the bill of lading for the Charterers’ parcel was concerned.

 

Permission to appeal was granted on the following question of law. “Where a charterparty requires demurrage to be calculated by reference to bill of lading quantities, and contains a demurrage time bar which requires provision of all supporting documents, will a claim for demurrage be time-barred if the vessel owner fails to provide copies of the bills of lading?”

 

The tribunal had found that copies of the bills of lading did not need to be submitted, and provision of the statement of facts was sufficient.

 

Robin Knowles J, however, found that copies of the bills of lading did need to be submitted. The Charterparty in the present case contains an express reference to “Bill of Lading quantities” in clause 10(g) in which it is made clear that “pro rating” means a division according to bill of lading quantities. Furthermore the Charterparty in the present case referred not simply to “supporting documentation” but “all” such documentation.

 

There was no evidence that the bills were unavailable to the Owners and if there were sensitive elements to the bill of lading, those could very easily be redacted and the redaction would not realistically include the quantities. If a bill of lading was not available then a proper explanation of that fact would need to be provided for the purposes of clause 38 alongside what was available.

 

Failure to submit the third-party bill barred the claim in its entirety of her claim and not just that part of the claim attributable to delays in berthing. However, the clause here referred to a claim/invoice as a single item and did not (in contrast to the clause in The Adventure) refer to “constituent part[s]” of a claim for demurrage.

Switch bills. Initial shipper off the hook for freight due under bill of lading.

 

The effect of switch bills with a new shipper in the second set has the effect of a novation of the initial contract contained or evidenced in the initial bill with the shipowner as carrier under the bill. So held Stevenson J in the Supreme Court of New South Wales in The Illawarra Fortune [2020] NSWSC 183. Both sets incorporated the freight payable under a voyage charterparty with the time charterer of the vessel. The initial shipper, whose parent company was the voyage charterer, ceased to be liable for unpaid freight once the second bills were issued naming a different shipper. Had the original bills not been switched the time charterer, as assignee of the shipowner’s rights under the bills of lading,  would have been able to sue the original shipper for freight due under the voyage charter with the shipper’s parent company.