Grant Shapps and ‘The Commitments’. UK sets out its plans for decarbonising shipping.

Hot on the heels of the bumper 581 page communication from the EU Commission on its decarbonisation plans comes a mere 221 page communication from the Department for Transport Decarbonising Transport: A Better, Greener Britain.

This deals with various sectors, and contains various commitments as regards the domestic maritime sector.

Commitment. “We will plot a course to net zero for the UK domestic maritime sector, with indicative targets from 2030 and net zero as early as is feasible We will establish, following public consultation in 2022, an ambitious ‘Course to Zero’. This consultation will explore the technical, operational and policy options available for Government to accelerate decarbonisation in this sector to achieve net zero by no later than 2050 or earlier if possible. Following consultation, we will establish ambitious indicative targets for the domestic maritime sector recognising that we have ground to make up, covering 2030 and onwards. These targets will guide the design and enable us to measure the success of future policy interventions. We will embed this course in our Clean Maritime Plan (CMP), as part of a planned review and refresh which is due to start in 2022 and include within the CMP the long term interventions needed to achieve full decarbonisation.”

Commitment. “We will consult on the potential for a planned phase out date for the sale of new non-zero emission domestic vessels Following the conclusion of the current Clean Maritime Demonstration Competition and the Course to Zero consultation, we will consult in mid-2022 upon the potential for long term decarbonisation to be accelerated through carefully designed, well signposted measures to phase out the sale of new, non-zero emission domestic vessels, building on the experiences of the steps being undertaken today in other modes of transport.”

Commitment. “We will accelerate the development of zero emission technology and infrastructure in the UK We have recently launched a £20 million funding package – the Clean Maritime Demonstration Competition (CMDC) – to support and accelerate research, design and development of zero emission technology and infrastructure solutions for maritime and accelerate decarbonisation.”

Commitment. “We will consult this year on the appropriate steps to support and, if needed, mandate the uptake of shore power in the UK

We will consult in winter 2021 on how government can support the wider deployment of shore power, including consideration of regulatory interventions, for both vessels and ports, that could drive deployment as we transition to a net zero world, and bring forward appropriate measures.”

 Commitment. “We will extend the Renewable Transport Fuel Obligation (RTFO) to support renewable fuels of non-biological origin used in shipping We consulted in March 2021, on a potential expansion of the RTFO to include some advanced maritime fuels in order to support their deployment.109 The RTFO mandates that a certain proportion of road fuel must be from a sustainable renewable source. Maritime fuels currently have no equivalent system, which we aim to change. We recently announced that we will make renewable fuels of non-biological origin used in shipping eligible for incentives under the RTFO.”

Commitment. “Internationally, the UK will press for greater ambition during the 2023 review of the International Maritime Organisation Initial Greenhouse Gas Strategy and urge accelerated decarbonisation.

The IMO will review its strategy in 2023 and as set out in the recent G7 Climate and Environment Communique112 the UK will be seeking to increase ambition to ensure that international shipping plays its part in delivering decarbonisation. We will promote close alignment with the Paris temperature goals and challenge the international community to deliver on the IMO initial strategy commitment to ‘phase out’ emissions from the international sector as soon as possible.”

Commitment. “We will ensure we have the right information to regulate emissions, and to judge the effectiveness of the steps we are taking in the UK and at the IMO We will review, and if appropriate amend, the operation of the UK’s existing monitoring, reporting and verification system for greenhouse gas emissions from international shipping, to ensure it is fit for purpose and delivering the information we need to decarbonise the maritime sector. We will keep the measurement approach to the UK’s international shipping emissions under review and consider the appropriateness of fuel or activity-based measures. Additionally, we will consider how similar information can be collected for the domestic fleet, in order to provide a better evidence base for future policy interventions.

We will include the UK international aviation and shipping emissions in the Sixth Carbon Budget The Government has set the Sixth Carbon Budget to include the UK’s share of international aviation and shipping emissions, as recommended by our independent climate advisors, the Climate Change Committee (CCC). This allows those emissions to be accounted for consistently with other emissions included within the Sixth Carbon Budget. In line with the CCC’s recommended method for CB6 and UNFCC reporting, the projections for international shipping emissions represent the estimated emissions from fuel sold in the UK for use in international shipping.”

It is noteworthy that shipping is not included in the UK’s ETS and international shipping enters the stage only in the last of the above mentioned commitments.

“Ever Given” on its way at last.

On Wednesday 7 July the Ever Given was finally released following a ceremony at Ismailia with the signing a settlement of the Suez Canal Authority’s claims for the salvage operation, costs of stalled canal traffic, and lost transit fees for the week the Ever Given had blocked the canal. Local reports suggest that the shipowners will also present the authority with a tug boat.

The amount of the settlement is undisclosed but is thought to be rather less than the $900m initially claimed, which included $300,00 for ‘loss of reputation’. It is possible that the ship may still face tort claims from cargo carried on ships delayed by the incident, particularly if perishable cargo sustained damage due to the delay.

The British horticultural sector will be particularly delighted to receive a much delayed consignment of garden gnomes carried on the vessel.

Bastille Day. EU Commission’s present to the shipping industry.

Today the EU Commission has issued a 581 page document with a proposed directive amending the 2003 ETS Directive. This is considerably less extensive that the proposed amendment to the 2015 MRV Regulation which is what the EU Parliament voted for last October.

Maritime transport will now fall within the Directive (inserted articles 3g to 3ge) which will apply in respect of: emissions from intra-EU voyages; half of the emissions from extra-EU voyages and; emissions occurring at berth in an EU port. This rows back from the Parliament’s proposed amendments to the 2015 MRV Regulation which would have included all emissions from extra-EU voyages which started from or ended within the EU. The same rules that apply to other sectors covered by the EU ETS should apply to maritime transport with regard to auctioning, the transfer, surrender and cancellation of allowances, penalties and registries (Article 16).  Shipping will enjoy phased entry into the ETS. Shipping companies shall be liable to surrender allowances according to the following schedule: (a) 20 % of verified emissions reported for 2023; (b) 45 % of verified emissions reported for 2024; (c) 70 % of verified emissions reported for 2025; (d) 100 % of verified emissions reported for 2026 and each year thereafter: somewhat different from the inclusion in the ETS as of 1.1.2022 proposed by the EU Parliament. The current MRV Regulation applies only to CO2 emissions and the Commission leaves extension to other gases to a later phase, once the monitoring approaches and emissions factors of these gases has been agreed.

The proposed amending directive includes new definitions for “shipping company” and “administering authority in respect of shipping companies” in Article 3(v) and Article 3(w) respectively.  The person or organisation responsible for the compliance with the EU ETS should be the shipping company, defined as the shipowner or any other organisation or person, such as the manager or the bareboat charterer, that has assumed the responsibility for the operation of the ship from the shipowner and that, on assuming such responsibility, has agreed to take over all the duties and responsibilities imposed by the International Management Code for the Safe Operation of Ships and for Pollution Prevention. This definition is based on the definition of ‘company’ in Article 3, point (d) of Regulation (EU) 2015/757, and in line with the global data collection system established in 2016 by the IMO. This is good news for time charterers who would have become responsible under the Parliament’s proposed amendment to the MRV Regulation.

Still, half a loaf is better than what is currently being served up by the IMO on its GHG reduction menu for international shipping.

The proposed Directive can be found here: https://ec.europa.eu/info/sites/default/files/revision-eu-ets_with-annex_en_0.pdf

Climate Change and International Shipping. Life in the slow lane, and life in the fast(er) lane.

The IMO’s Marine Environment Protection Committee (MEPC 76), meeting from 10 to 17 June 2021, adopted amendments to the International Convention for the Prevention of Pollution from Ships (MARPOL) Annex VI that will require ships to reduce their greenhouse gas emissions.

All ships will be required to calculate their Energy Efficiency Existing Ship Index (EEXI) following technical means to improve their energy efficiency and to establish their annual operational carbon intensity indicator (CII) and CII rating. Carbon intensity links the GHG emissions to the amount of cargo carried over distance travelled.

Ships will get a rating of their energy efficiency (A, B, C, D, E – where A is the best).  A ship rated D for three consecutive years, or E, is required to submit a corrective action plan, to show how the required index (C or above) would be achieved.

The amendments to MARPOL Annex VI (adopted in a consolidated revised Annex VI) are expected to enter into force on 1 November 2022, with the requirements for EEXI and CII certification coming into effect from 1 January 2023. The first annual reporting will be completed in 2023, with the first rating given in 2024.

A review clause requires the IMO to review the effectiveness of the implementation of the CII and EEXI requirements, by 1 January 2026 at the latest, and, if necessary, develop and adopt further amendments. 

The MEPC also adopted related guidelines to support the implementation of the amendments. 

The guidelines include the 2021 Guidelines on the operational carbon intensity reduction factors relative to reference lines (CII Reduction factor Guidelines, G3). This includes the required reduction (Z) factor, which is set at a rate, relative to 2019, of 11% by 2026 (about a 1.5% annual reduction, as opposed to the 7% annual reduction that would be needed for shipping to meet the goals of the Paris Agreement 2015). This would  be further strengthened after that date, taking into account the review of the measure and latest climate science.

These combined technical and operational measures, referred to as short term carbon intensity measures, are stated as being in line with the ambition of the Initial IMO GHG Strategy, which aims to reduce carbon intensity of international shipping by 40% by 2030, compared to 2008.

The MEPC adopted a work plan on the concrete way forward to make progress with candidate mid- and long-term measures including measures to incentivize the move away from fossil fuels to low- and zero-carbon fuels to achieve decarbonization of international shipping.

A proposal initially considered by MEPC suggested a mandatory levy of $100 per tonne carbon dioxide equivalent on heavy fuel oil will be further considered at the intersessional working group meeting in the context of the adopted workplan along with other proposals for mid-term measures. A proposal to establish an International Maritime Research Board, funded by a tax on oil fuel used by shipping and discussion will resume at the Committee’s next session.

The MEPC also adopted amendments to MARPOL Annex I (addition of a new regulation 43A) to introduce a prohibition on the use and carriage for use as fuel of heavy fuel oil (HFO) by ships in Arctic waters on and after 1 July 2024.

The prohibition will cover the use and carriage for use as fuel of oils having a density at 15°C higher than 900 kg/m3 or a kinematic viscosity at 50°C higher than 180 mm2/s. Ships engaged in securing the safety of ships, or in search and rescue operations, and ships dedicated to oil spill preparedness and response would be exempted. Ships which meet certain construction standards with regard to oil fuel tank protection would need to comply on and after 1 July 2029.

A Party to MARPOL with a coastline bordering Arctic waters may temporarily waive the requirements for ships flying its flag while operating in waters subject to that Party’s sovereignty or jurisdiction, up to 1 July 2029.

Meanwhile the EU is also active with plans regarding the reduction of carbon emissions from international shipping. Its plans for inclusion of international shipping in the emissions trading scheme were due to have been announced this month but will now be announced on July 14, Bastille Day, as part of its ‘Fit for 55’ package.

Maritime Labour Convention and Electronic Certificates: The Way Forward?

It is often said that a period of crisis brings in the light opportunities for development, and this cannot be less true of the COVID-19 pandemic. Indeed, this on-going pandemic, together with the control measures adopted by many countries, are highlighting the need for a shift towards digitalisation. In the context of the Maritime Labour Convention (MLC), 2006, in particular, the crisis created by the COVID-19 pandemic not only interrupted, in some instances, for a significant period of time, the conduct of inspections required in accordance with Title 5 of the Convention, but also challenged the traditional ways of carrying out such inspections. It came, thus, as no surprise that a number of countries, influenced by the benefits and the practicality of having on board electronic certificates, specifically authorised their use during this pandemic to facilitate port State control inspections, with a view to ensuring that safety standards and decent working and living conditions on board ships are maintained.[1] But, how ready was the regulatory framework for such a change?

At an international level, discussion of issues relating to electronic certificates in the context of the MLC, 2006, had started at the third meeting of the Special Tripartite Committee in April 2018, only two years before the beginning of this pandemic, without taking any decisions on this matter. During this meeting, the Vice-Chairperson of the Shipowner group, the Vice–Chairperson of the Seafarer group and the Chairperson of the Government group recognised the benefits of the use of electronic documents in relation to the Maritime Labour Certificate or the Declaration of Maritime Labour Compliance, which could facilitate the maintenance and withdrawal of documents and expedite inspections by port State control officers.[2] However, one issue was whether the text of the MLC, 2006, would permit the use of such electronic certificates.[3] Furthermore, concerns were raised as to whether the various port State control authorities would accept those electronic certificates.[4] Finally, there was uncertainty as to how such electronic documents could be displayed on board ships to conform with the requirements of the Convention.[5] The possibility of using electronic certificates in relation to other documents, such as crew lists, seafarers’ employment agreements or information on crew members had also been addressed. In this respect, both the Vice-Chairperson of the Shipowner group and the Vice–Chairperson of the Seafarer group highlighted the difficulties surrounding the protection of the personal data of seafarers and noted the need to ensure compliance with the EU General Data Protection Regulation.[6]

The Special Tripartite Committee returned to some of those issues during the first part of its fourth meeting in April 2021 where it was explained that the provisions of the MLC, 2006, as currently drafted, would not prevent national administrations from authorising the creation and storage of seafarers’ employment agreements in electronic format, the maintenance of electronic records on board ships and the use of such records for inspection purposes as well as the issuance of electronic Maritime Labour Certificates and Declarations of Maritime Labour Compliance.[7] However, print outs of such electronic documents should be carried on board ships and should remain available to seafarers in accordance with Standard A5.1.3 of the MLC, 2006, paragraph 12 of which explicitly states that ‘a current valid maritime labour certificate and declaration of maritime labour compliance, accompanied by an English-language translation where it is not in English, shall be carried on the ship and a copy shall be posted in a conspicuous place on board where it is available to the seafarers’.[8] It was further stressed that the use of electronic seafarers’ employment agreements should not affect the obligations under Standard A2.1 of the MLC, 2006.[9] Amongst other things, those obligations provide that seafarers working on board ships shall have a seafarers’ employment agreement signed by both the seafarer and the shipowner or a representative of the shipowner, that seafarers shall be given an opportunity to examine and seek advice on the agreement before signing, that the shipowner and the seafarer shall each have a signed original of the seafarers’ employment agreement, and that clear information as to the conditions of employment shall be easily obtained on board by seafarers and shall also be accessible for review by inspectors. The question of whether electronic signatures should be acceptable in the context of the seafarers’ employment agreement is a matter of general contract law that is left by the Convention to be determined by the national law of the flag State or any other law applicable to the seafarers’ employment agreement.[10] Finally, it was observed that the use of electronic certificates should not undermine the obligations of State parties to the MLC, 2006, or shipowners with regards to ship certification and should not make more difficult the process of issuing, accessing or using ship certificates by the individuals concerned.[11]

At a national level, Denmark was the first country to use electronic certificates for seafarers. Its pilot project of digital certificates for seafarers started in June 2016. The aim of this project was to show how digital certificates could operate on board ships, for companies and authorities.[12] The project was based on three pillars. First, seafarers would use a mobile application to sign-on, enabling data sharing; then the master would access the digital certificates of the crew, which would facilitate the management of the crew, the automatic validation of compliance with minimum safe manning requirements, and the transfer of the details to authorities prior to arriving in the next port; and, finally, port authorities would access the digital certificates of the crew, in order to verify compliance with minimum safe manning requirements.[13] Before the launch of this project, the Danish Maritime Authority sent information to the IMO explaining that the certificates would be in compliance with international conventions and instruments, including the Convention on Facilitation of International Maritime Traffic (FAL Convention) and the IMO Facilitation Committee (FAL) Guidelines for the use of electronic certificates (FAL.5/Circ.39/Rev.2 and Corr. 1), as they would carry an electronic coat of arms, the stamp of the Danish Maritime Authority, a signature of an authorised inspector as well as a unique tracking identification number.[14] The certificates would also be protected from alteration or tampering through encryption and use of a digital signature.[15]

Since 2016, other flag States have also started to adopt regulations in relation to the use of electronic certificates, in compliance with the IMO Guidelines for the use of electronic certificates (FAL.5/Circ.39/Rev.2). Such countries include Antigua and Barbuda,[16] Bahamas,[17] Belgium,[18] Cyprus,[19] India,[20] Kiribati,[21] Liberia,[22] Malta,[23] Marshall Islands,[24] Myanmar,[25] Norway,[26] Singapore,[27] Palau,[28] Panama,[29] Sri Lanka,[30] and the UK.[31] However, it may be worth mentioning that only very few countries have made explicit provisions for the issuance of MLC, 2006, documents in electronic format. For example, the Marshall Islands provided that, as from February 2020, the Maritime Administrator would issue the Declaration of Maritime Labour Compliance Part I in electronic format only.[32]

This hesitation on the part of flag States must be associated with the fear of port State control authorities denying the validity of electronic certificates and the possibility of port State authorities unduly detaining or delaying vessels carrying such certificates. Clearly, the latter can be particularly onerous for seafarers, shipowners and other stakeholders. In this respect, the guidelines for port State control officers carrying out inspections under the MLC, 2006, which were published by the ILO in 2008, does not provide any guidance.[33] In fact, those guidelines provide that port State control inspectors should use their professional judgment in carrying out all duties.[34] Furthermore, the guidelines prescribe that the Maritime Labour Certificates and Declaration of Maritime Labour Compliance should be the starting point in the inspection process as they constitute prima facie evidence that the ship is in compliance with the requirements of the MLC, 2006,[35] and that an inspection may end after a satisfactory document review.[36] Noting the importance of the Maritime Labour Certificates and Declaration of Maritime Labour Compliance in the process of port State control inspections under the MLC, 2006, it can, thus, be argued that an update of this guidance is necessary to set out some uniform standards for the issue, acceptance, and use of such certificates.

Beyond the MLC, 2006, context, in June 2017, the Paris MoU issued a set of guidelines for the use of electronic certificates.[37] In particular, section 3, read in conjunction with section 2.2, explain that port State control inspectors should accept electronic certificates provided that: they are consistent with the format and content required by the relevant international convention or instrument, as applicable; they are protected from edits, modifications or revisions other than those authorised by the issuer or the administration; they contain a unique tracking number used for verification; and they contain a printable and visible symbol that confirms the source of issuance. However, those guidelines were only drafted for the purpose of providing guidance to port State control inspectors in performing a port State control inspection, and third parties could not claim any rights on that basis.[38]

More recently, the IMO adopted the procedures for port State control, 2019. What is particularly interesting, though, it is that section 1.2.3 provides that if a port State exercises control based on the MLC, 2006, guidance on the conduct of such inspections is given in the ILO publication “Guidelines for port State control officers carrying out inspections under the MLC, 2206”. It is, thus, unclear whether these procedures should apply to such port State control inspections or not. In that respect, it is submitted that a combined reading should be preferred. In any case, this guidance adopts a positive approach towards the use of electronic certificates that aims to afford consistency in the conduct of port State control inspections. More specifically, section 2.2.3 of the IMO procedures for port State control, 2019, explains that certificates may be in hard copy or electronic format.[39] Where the ship relies upon electronic certificates, the certificates and website used to access them should conform with the IMO Facilitation Committee (FAL) Guidelines for the use of electronic certificates (FAL.5/Circ.39/Rev.2 and Corr. 1), specific verification instructions should be available on the ship, and viewing such certificates on a computer should be considered as meeting the requirement of carrying certificates on board.[40] Of course, this guidance is only recommendatory in nature. Governments are only encouraged to implement these procedures when exercising port State control. This implies that port States can still adopt different requirements in relation to the validity of electronic certificates. In practice, this could mean that a ship calling at various ports in the course of a single voyage would have to carry both a hard copy and an electronic version of a certificate to comply with the requirements of different port States. There is no doubt that this could disincentivise flag States and companies from investing on acquiring the necessary knowledge and technology for issuing, accessing or using electronic certificates. On a final note, it should not be overlooked that this lack of uniform standards at the international level could lead to the emergence of more ports of convenience.

As we move forward and out of this pandemic, the use of electronic certificates in the context of the MLC, 2006, is likely to be expanded or even generalised. However, for that to be a viable possibility for the future, international cooperation is necessary for the creation of uniform standards for the issuance, acceptance and use of such certificates.


[1] For example, Belgium (Circular 2020/002).

[2] Final report: Third meeting of the Special Tripartite Committee of the Maritime Labour Convention, 2006, as amended (MLC, 2006) (Geneva, 23-27 April 2018), International Labour Office, International Labour Standards Department, Geneva, ILO, 2018, at page 15.

[3] ibid.

[4] ibid.

[5] ibid.

[6] ibid.

[7] Background paper for discussion, Fourth meeting of the Special Tripartite Committee established under Article XII of the Maritime Labour Convention, 2006, as amended – Part I (Geneva, 19-23 April 2021), International Labour Office, International Labour Standards Department, Sectoral Policies Department, Geneva, ILO, 2021, at page 24.

[8] ibid at page 25.

[9] ibid.

[10] ibid.

[11] ibid.

[12] Danish Maritime Authority, “Digital Certificates for Seafarers” available at < https://www.dma.dk/SoefarendeBemanding/SoefartsbogBeviser/DigitaleBeviser/Sider/default.aspx> accessed 28 May 2021.

[13] ibid.

[14] IMO Circular letter No 3646.

[15] ibid.

[16] Circulars 2018-003 and 2018-004.

[17] Marine Notice 53 of 4 January 2021.

[18] Circular 2019/0001.

[19] Circular No 14/2018.

[20] Engineering Circular No 07 of 2017.

[21] Marine Circular 37/2017.

[22] Information on Certificates and Documents issued by the Republic of Liberia of 14 September 2017.

[23] Merchant Shipping Notice No 139.

[24] Marine Notice MN-1-109-1 rev Nov/2020.

[25] Marine Guidance 1/2018.

[26] Norwegian Maritime Authority, “Electronic Certificates for Vessels” available at < https://www.sdir.no/en/shipping/vessels/certificates-and-documents-for-vessels/electronic-certificates-for-vessels/> accessed 28 May 2021.

[27] Shipping Circular No 26 of 2017.

[28] Marine Circular No 17-045 and Marine Notice 108.1.

[29] Merchant Marine Circular MMC-355.

[30] Merchant Shipping Notice (MSN) 01/2018 of 12 September 2018.

[31] Marine Information Note (MIN) 609 (M+F).

[32] Marine Safety Advisory No 07-20.

[33] ILO, Guidelines for port State control officers carrying out inspections under the Maritime Labour Convention, 2006. Geneva, International Labour Office, 2009.

[34] ibid, at paragraph 39.

[35] ibid, at paragraph 42.

[36] ibid, at paragraph 45.

[37] Paris MoU, “Guidelines for the use of electronic certificates” available at < https://www.parismou.org/guidelines-use-electronic-certificates> accessed 28 May 2021.

[38] ibid.

[39] IMO Resolution A. 1138(31).

[40] IMO Resolution A. 1138(31), Annex at Section 2.2.3.

Ever Given latest.

Yesterday, 23 May, the appeals chamber of the Ismailia Economic Court upheld a ruling issued by the Ismailia Court of First Instance on May 4, rejecting the appeal made by the owners of the ship (Shoei Kisen Kaisha) against keeping the ship under arrest. In a second case that was filed by the Suez Canal Authority (SCA) to keep the seizure of the ship valid, the Court recused itself and referred this case back to the Economic Court of First Instance to be considered on May 29.

The Suez Canal Authority initially demanded $916 million in compensation, which it later lowered to $600 million which would cover the salvage operation, costs of stalled canal traffic and lost transit fees for the week the Ever Given blocked the canal. It seems the claim for reputational damage totalling $300 million may have been jettisoned.

The vessel’s owners have denied that the accident was their fault and are claiming fault on the part of the SCA in allowing the vessel the ship to enter the canal amid bad weather, and claim that at least two tugs suitable for the vessel’s size should have been supplied. Owners are claiming $100,000 in initial compensation for losses related to the vessel’s seizure.

“EVER SMART” collision with “ALEXANDRA 1”: The Crossing and Narrow Channel Rules

MAIB Investigation Report: Collision Between Tanker and Containership Off  Jebel Ali – gCaptain

On 19 February 2021 the Supreme Court delivered a seminal judgment in the first appeal in a collision to come before the highest court since the mid 1970s and overturned the decisions of both Mr Justice Teare [2017] 1 Ll.R. 66 and of the Court of Appeal [2019] 1 Ll.R. 130.   

On 11 February 2015 the outbound Ever Smart, a large container ship, collided with the inbound Alexandra 1, a VLCC, within the pilot boarding area, just outside the dredged entrance/exit channel to the port of Jebel Ali. The appeal concerned two questions relating to the application of the “crossing rules” as set out in rules 15 – 17 of the International Regulations for Preventing Collisions at Sea 1972. The Supreme Court emphasised that the Collision Regulations must be capable of implementation by all vessels as defined in the Rules, irrespective of their technological capabilities [72].

The Questions on the Appeal

The first question for determination was whether the crossing rules are inapplicable or are to be disapplied where an outbound vessel (Ever Smart) is navigating within a narrow channel and has a vessel (Alexandra 1) on a crossing course approaching the narrow channel with the intention of and in preparation for entering it. This question concerned the inter-relationship between the crossing rules and the “narrow channel rules” (rule 9).

The second question was whether it is necessary for the putative give-way vessel to be on a steady course for the crossing rules to be engaged. The “putative give-way vessel” is the vessel which, if the crossing rules apply, would be required by rule 15 to keep out of the way of the other vessel. In practical terms it is the vessel which has the “putative stand-on vessel” on her starboard side.

Both Teare J. and the Court of Appeal answered both questions “yes” with the consequence that the crossing rules were either not engaged at all or, if engaged, were overridden by the narrow channel rules. Teare J. apportioned liability 80% (Ever Smart) and 20% (Alexandra 1) and this was upheld by the Court of Appeal.

The decision of the Supreme Court

The Supreme Court disagreed.  Before addressing the two questions the Supreme Court emphasised the international character of the Collision Regulations and their application to “mariners of all nationalities, of all types (professional and amateur), in a wide range of vessels and in worldwide waters”: see [37] – [45]. In this regard the Supreme Court referred to the well-known statement of Lord Wright in The Alcoa Rambler [1949] AC 236 (PC) at p 250 that “wherever possible” the crossing rules “ought to be applied and strictly enforced because they tend to secure safe navigation”. See also Atkin LJ in The Ulrikka (1922) 13 Ll.L.Rep 367 at 368. At [46] –  [74] the Supreme Court carried out a detailed analysis of the context and purpose of the crossing rules, addressing the meaning of “heading”, “course” and “bearing” and emphasising the existence of a risk of collision when two vessels are approaching each other on a more or less steady bearing: see rule 7(d)(i).

The Supreme Court also considered the effect of rule 2(a) and (b). Rule 2(a) had been heavily relied upon by the Alexandra 1 interests for the dis-application of the crossing rule but this argument was rejected as “misconceived”: [66]. In essence the Supreme Court held that:

a.    The crossing rules were of such importance in the context of collision avoidance that “they should not lightly be treated as inapplicable” [68].

b.    Any tension between the obligation of the stand-on vessel to keep her course and speed and to comply with another rule should “be resolved by treating the stand-on obligation as moulded for the purpose of permitting compliance with the other rule” [69]. Teare J. and the Court of Appeal had erred in treating the rules as inconsistent either generally (Teare J.) or on the particular facts (the Court of Appeal).

c.    Any ouster of one rule must be limited to the minimum strictly necessary to avoid danger and uncertainty: [70].

The Second Question

The Supreme Court first addressed the second question and held that neither the give-way vessel nor the stand-on vessel had to be on a steady course for the crossing rules to be engaged: [75] – [115].   In essence the Supreme Court held that two crossing vessels may be approaching each other and remain on a steady bearing, (with consequent risk of collision) without either vessel being on a steady course.  

“ …. if two vessels, both moving over the ground, are crossing so as to involve risk of collision, the engagement of the crossing rules is not dependent upon the give-way vessel being on a steady course. If it is reasonably apparent to those navigating the two vessels that they are approaching each other on a steady bearing (over time) which is other than head-on, then they are indeed both crossing, and crossing so as to involve a risk of collision, even if the give-way vessel is on an erratic course. In such a case, unless the overtaking rule applies, the crossing rules will apply.” [111]

Although it was in issue on the facts, the Supreme Court also considered that the stand-on vessel need not be on a steady course for the engagement of the crossing rules [112] – [114].

The Supreme Court concluded that, subject to the first question, the crossing rules were engaged even though “ALEXANDRA 1 was not on a steady course, or speed” [115].

The First Question

The Supreme Court identified a number of relevant factual situations where the inter-relationship between the crossing and narrow channel rules needed to be considered.  The Supreme Court sought “to determine with clarity and as precisely as possible” [124] the circumstances in which the crossing and narrow channel rules would apply in the vicinity of the entrance to a channel

Three broad groups of cases were identified [134]:

“Group 1 are vessels which are approaching the entrance of the channel, heading across it, on a route between start and finishing points unconnected with the narrow channel. They are approaching the entrance of the channel, but not intending or preparing to enter it at all. Group 2 are vessels which are intending to enter, and on their final approach to the entrance, adjusting their course to arrive at their starboard side of it. ….. Group 3 are approaching vessels which are also intending and preparing to enter, but are waiting to enter rather than entering …. ”

The crossing rules would clearly apply in a Group 1 case. The crossing rules would not apply in relation to Group 2 “because the approaching vessel is both preparing and intending to enter it, and already shaping (ie adjusting her course and speed to do so), on her final approach”. The decisions in The Kaiser Wilhelm Der Grosse [1907] P 36 and 259, The Canberra Star [1962] 1 Lloyd’s Rep 24 and Kulemesin v HKSAR [2013] 16 HKCFA 195 fell within Group 2.  

However the present case fell with Group 3 because Alexandra 1 had not yet shaped to enter the narrow channel on her final approach. The Supreme Court held that the crossing rules should continue to apply to a “Group 3 waiting vessel, or any vessel approaching the channel intending to enter it, which has yet to shape her course to enter it on her starboard side of it” [138].  Further there were no reason why the outbound vessel could not comply both with the crossing and narrow channels: [139] – [140]. 

At [145] the Supreme Court concluded on the first question as follows:

“Where an outbound vessel in a narrow channel is crossing with an approaching vessel so as to involve a risk of collision, the crossing rules are not overridden by the narrow channel rules merely because the approaching vessel is intending and preparing to enter the narrow channel. The crossing rules are only overridden if and when the approaching vessel is shaping to enter, adjusting her course so as to reach the entrance on her starboard side of it, on her final approach.”

Apportionment will now be re-determined by Sir Nigel Teare on the basis that the crossing rules applied from about C-23 and that the Alexandra 1 was the give-way vessel.

Simon Rainey QC and Nigel Jacobs QC represented the successful Ever Smart Interests. They were instructed by Ince Gordon Dadds LLP (Christian Dwyer, Sophie Henniker-Major and James Drummond) in consultation with Stann Law Limited (Faz Peermohamed).

Supreme Court overrules Court of Appeal on interaction of crossing and narrow channel rules in COLREGs.

 Evergreen Marine (UK) Limited (Appellant) v Nautical Challenge Ltd (Respondent)

[2021] UKSC 6

On 11 February 2015, the appellant’s large container vessel, Ever Smart, and the respondent’s VLCC (very large crude carrier), Alexandra 1, collided at sea at night just outside the entrance/exit channel to the port of Jebel Ali in the United Arab Emirates.

Ever Smart was outbound from Jebel Ali and had been navigating along the channel at a speed over the ground of 12.4 knots at the time of the collision. Alexandra 1 was inbound to Jebel Ali but had not entered the channel as she was waiting in the pilot boarding area to pick up a pilot, and was moving over the ground very slowly, approaching the channel at a speed over the ground of 2.4 knots, but with a varying course. Visibility was good enough for the vessels to have seen each other from about 23 minutes before the collision. For the whole of that period, the two vessels were approaching each other on a steady bearing.

The High Court held Ever Smart 80% liable for the damage caused by the collision and Alexandra 1 20% liable. The Court of Appeal agreed on both issues and on apportionment. Two issues arose on appeal.

1. The interplay between the narrow channel rules and the crossing rules.

2. Whether the crossing rules only engaged if the putative give-way vessel is on a steady course.

The Supreme Court in which Lords Briggs and Hamblen gave the judgment, addressed the second issue first.

The Supreme Court held that there was no ‘steady course’ requirement. In The Alcoa Rambler the Privy Council had held that the crossing rules did not apply because the putative give-way vessel (the vessel which would be required to keep out of the way if the crossing rules applied) could not determine that she was on a steadily crossing course with the putative stand-on vessel, as that vessel was concealed behind other anchored vessels until the last moment before the collision. Importantly, there was no opportunity for the putative give-way vessel to take bearings of the putative stand-on vessel. In the present case Alexandra 1 had been approaching Ever Smart on a steady bearing for over 20 minutes before the collision, on a crossing course, enough to engage the crossing rules even though she was not on a steady course. For the same reasons the stand-on vessel need not be on a steady course to engage the crossing rules either.

On the first issue, the  interplay between the narrow channel rules and the crossing rules, at first instance and in the Court of Appeal it had been  held that the narrow channel rules displaced the crossing rules, relying on The Canberra Star [1962] 1 Lloyd’s Rep 24 and Kulemesin v HKSAR [2013] 16 HKCFA 195. However, the Supreme Court noted that these cases concerned a vessel intending to enter and on her final approach to the entrance, shaping her course to arrive at the starboard side of it. They did not apply where the approaching vessel was waiting to enter rather than entering. The crossing rules should not be overridden in the absence of express stipulation, unless there was a compelling necessity to do so.

Here, Alexandra 1 was the approaching vessel, intending and preparing to enter the channel but, crucially, waiting for her pilot rather than shaping her course for the starboard side of the channel, on her final approach. Accordingly, there was no necessity for the crossing rules to be overridden as the narrow channel had not yet dictated the navigation of the approaching vessel.

That vessel could comply with its obligations under the crossing rules, whether it was the give-way vessel or the stand-on vessel. Nor did the crossing rules need to be displaced as regards the vessel leaving the channel. The crossing rules were only displaced when the approaching vessel was shaping to enter the channel, adjusting her course so as to reach the entrance on her starboard side of it, on her final approach. Here, the crossing rules applied and Alexandra 1, as the give-way vessel, was obliged to take early and substantial action to keep well clear of Ever Smart.

The Supreme Court unanimously allowed the appeal. Apportionment of liability would be redetermined by the High Court.

In Rem Action- Demise Charterer or Not?

‘Statutory liens’ or ‘statutory rights in rem’ come into existence on commencement of in rem proceedings (The Monica S [1967] 2 Lloyd’s Rep 113). In practice, this means that, if a ship is sold to a third party before the jurisdiction has been invoked or if a charter by demise is terminated before such time, then the potential claimant may be unable to benefit from the in rem proceedings and the accompanying right of ship arrest. The most recent judgment of the Admiralty Court in Aspida Travel v The Owners and/or Demise Charterers of the Vessel ‘Columbus’ and The Owners and/or Demise Charterers of the Vessel ‘Vasco Da Gama’ [2021] EWHC 310 (Admlty) highlights that.

In this case, Aspida Travel claimed against the proceeds of sale of the vessels ‘Vasco De Gama’ and ‘Columbus’ in respect of travel agency services for the transport of crew to and from the vessels which took place between 1 January 2020 to 31 July 2020 when the vessels went to lay-up due to the pandemic. At that time the vessels ‘Vasco De Gama’ and ‘Columbus’ were demise chartered to Lyric Cruise Ltd and Mythic Cruise Ltd respectively to whom Aspida provided the relevant services and rendered the resulting invoices. The claim forms were issued on 13 November and 20 November 2020. The basis of the claims was Section 21 of the Senior Courts Act 1981, paragraph 4 of which provides that:

‘In the case of any such claim as is mentioned in section 20 (2) (e) to (r), where –

  • the claim arises in connection with a ship; and
  • the person who would be liable on the claim in an action in personam (‘the relevant person’) was, when the cause of action arose, the owner or charterer of, or in possession or in control of, the ship, an action in rem may (whether or not the claim gives rise to a maritime lien on that ship) be brought in the High Court against –
    • that ship, if at the time when the action is brought the relevant person is either the beneficial owner of that ship as respects all the shares in it or the charterer of it under a charter by demise; or
    • any other ship of which, at the time when the action is brought, the relevant person is the beneficial owner as respects all the shares in it.’

The main objection to the claims was that they do not meet the requirements of Section 21 (4) of the Senior Courts Act 1981, in that Lyric Cruise Ltd and Mythic Cruise Ltd as the ‘relevant persons’ (i.e. the persons who would be liable in personam on the claims) were the charterers at the time when the cause of action arose, but not the demise charterers at the time when the action was brought. In fact, Mythic Cruise Ltd and Lyric Cruise Ltd terminated their charters on 7 October 2020 and 9 October 2020. As the claims were brought more than a month later, it was held that the third require of the Section 21 (4) of the Senior Courts Act 1981 was not fulfilled. By the time the claims were issued, Mythic Cruise Ltd and Lyric Cruise Ltd were no longer the demise charterers.

A “maritime COVID” case in the Admiralty Court. First of many?

One of the features of the pandemic has been to throw some businesses into insolvency. This recently became an issue in P&O Princess Cruises International Ltd v The Demise Charterers of the Vessel ‘Columbus’ [2021] EWHC 113 (Admlty) (26 January 2021)  as regards lay-up charges for cruise vessels at the Port of Tilbury following the collapse of the CMV cruise line.

(1) P&O Princess Cruises International Ltd v The Demise Charterers of the Vessel ‘Columbus’ [2021] EWHC 113 (Admlty) (26 January 2021) Admiralty Registrar Davison

In March 2020 the pandemic caused cruise line CMV to suspend operations. Layup at the Port of Tilbury was agreed verbally at the rate of £3,000 per vessel per week. The Port did not look with favour on extended lay-bys as these tended to interfere with the trading upon which the Port’s business model was based. Vessels on extended lay-by blocked berths that could otherwise have been in use for working vessels whose quick turnaround enabled the Port to charge for embarking and disembarking passengers and goods and for other services. On 19 June 2020, the Vessels were detained by the Maritime and Coastguard Agency for non-payment of crew wages. A month later, the CMV empire collapsed. Some of the CMV companies went into administration on 20 July 2020. Shortly after in an exchange of emails the Port, pursuant to the “Extra Charges Schedule” found on its website and disseminated to regular port users (which included the Vessels’ former agents) by Notice to Mariners purported to switch the Vessels from the agreed lay-over rate of £3,000 per week to the “published tariff” rate which involved a dramatic increase over the previous agreed rate.

The combined effect of sections 26 and 31 of the Harbours Act 1964 summarised by Lightman J in The Winnie Rigg [1999] QB 1119 at 1125B:

“The Act of 1964 in section 26 provides that harbour authorities shall (notwithstanding any provision in earlier legislation) be free to charge such “ship, passenger and goods dues” as they think fit (subject only to the provision of a right of objection under section 31 to the Secretary of State.”

The issues were whether this power was subject to a requirement of reasonableness and the effect, if any, of the amendment from 26 June 2020 of the Insolvency Act 1986 by the Corporate Insolvency & Governance Act 2020.

(1) The relevant Port Regulation 5.6 required “reasonable prior notice” which was manifestly not complied with because the email gave less than 12 hours’ notice and the letters gave no notice at all. Less than 12 hours’ notice would not qualify as “minimum practicable”, let alone reasonable, notice. In the circumstances then prevalent a reasonable period would have been 28 days. The notice of variation was effective in accordance with that period of notice and was not required to be limited. Regulation 5.6 is not qualified by a requirement that charges may only be varied by an amount which is reasonable. The wording of 5.6 was clearly intended to give the Port complete freedom to increase the charges as it saw fit, on reasonable notice.

Although the email and the letters referred to the “published tariff”, had they used words such as “charges per Extra Charges Schedule” or similar the result would be no different. In that scenario, no one on the Vessels’ side could have thought that the part of the Schedule referring to “negotiated” rates for “extended lay-by” was the applicable part – because the negotiated rate had just been withdrawn. Equally, this was not a case of a failure to leave a berth at the required time “on completion of cargo operations”. That left only the rate for a vessel “detained at the port”. The Vessels had indeed been detained at the Port

If and to the extent that it was necessary for the Port to rely upon the Regulations’ statutory origin for their binding effect, then Section 22 of the 1968 Act would not prevent that as it makes the binding effect of the 2005 Regulations subject to a requirement that “a relevant extract from subsisting regulations” was “included in each schedule of charges published by the Port Authority”. In 1968 that would, no doubt, have taken the form of the Regulations (or at least Regulation 5) being cited alongside the Extra Charges Schedule or perhaps included in the same booklet or fixed to the same notice board. The Extra Charges Schedule stated in the top line, immediately below the title, that it was to be read in accordance with the Port of Tilbury’s General Terms and Conditions – 2005 Edition. That was, and was acknowledged to be, a reference to the 2005 Regulations which were on the same website. That plainly satisfied the requirements of Section 22, the statutory intention of which was to bring the 2005 Regulations to the attention of the Port’s users and to make them readily accessible.

(2) The position was not affected by the new Section 233B (3) inserted into the Insolvency Act 1986 which provides that

(3) A provision of a contract for the supply of goods or services to the company ceases to have effect when the company becomes subject to the relevant insolvency procedure if and to the extent that, under the provision—

(a) the contract or the supply would terminate, or any other thing would take place, because the company becomes subject to the relevant insolvency procedure, or (b) the supplier would be entitled to terminate the contract or the supply, or to do any other thing, because the company becomes subject to the relevant insolvency procedure.”

Although section 233B of the Insolvency Act 1986 was capable of qualifying the right of a supplier of services to terminate or “do any other thing” in respect of a company which had entered administration, that was not relevant here because the counterparties to the contracts were two CMV companies Mythic and Lyric, neither of which were in administration.

Admiralty Registrar Davison concluded, somewhat reluctantly, that the Port was entitled to its lay-up charges, stating.

58.       By implementing an increase from the agreed rate to the “tariff” rate, the Port, which already had a privileged position under statute, has considerably advanced that privileged position at the expense of other creditors. That observation is tempered by the fact that the Port was willing to reduce its rate to £10,000 per week (which, had it been necessary, I would have designated a “reasonable rate”) provided that the arrears were brought up to date. It was not the Port’s fault that that did not happen. Nevertheless, the overall recovery of the Port remains disproportionate to the services provided, the size of the available funds from the sales of the Vessels and the other claims against those funds.

59.       The Admiralty Court has no residual jurisdiction to moderate a claim so characterised. This claim, as with any claim, has to be assessed in accordance with the Port’s legal rights. I have found those rights to be clear.