Accrual of claim for purposes of six year tort limitation period. Offshore oil spill not a conintuing nuisance.


The Supreme Court has recently given judgment in Jalla and another (Appellants) v Shell International Trading and Shipping Co Ltd and another (Respondents) [2023] UKSC 16.

The case involved two Nigerian citizens who sued two companies within the Shell group in private nuisance in respect of damage to their land alleged to have resulted from an oil leak on 20 December 2011 lasting six hours during a cargo operation in the Bonga oil field, approximately 120km off the coast of Nigeria. An estimated equivalent of at least 40,000 barrels of crude oil leaked into the ocean. The defendants are alleged to be liable for the operation behind the Bonga Spill.

The appeal concerned the application of the limitation period for torts, which is usually six year, in respect of the claims for private nuisance. The claimants issued their claim form on 13 December 2017, just under six years after the spill occurred on 20 December 2011. In April 2018, over six years after the spill, the claimants purported to amend their claim form including changing one of the parties being sued from Shell International Ltd (a company which they had initially sued) to STASCO. In April, June and October 2019, they issued a series of applications to amend their claim form and particulars of claim. The claimants argue that so long as undue interference with their land is continuing, because oil on their land has not been removed or cleaned up, there is a continuing cause of action for the tort of private nuisance that is accruing afresh from day to day.

At first instance it was declared that declared that the nuisance as alleged by the Claimants in their original Particulars of Claim and/or their draft Amended Particulars of Claim and on the evidence before the Court at the hearings in September and October 2019 could not constitute a continuing nuisance and that accordingly the limitation period should not be extended by reference to the concept of a continuing nuisance. This was upheld by the Court of Appeal who found that the judge had been correct to decide that the claimants’ cause of action accrued when the oil struck their land. The Supreme Court have now unanimously rejected the appeal on the issue of whether there was a continuing nuisance.

For the purposes of the appeal it was it was assumed that some quantity of oil reached the Nigerian Atlantic shoreline within weeks of 20 December 2011 and that the tort of private nuisance may be committed where the nuisance emanates from the sea or is a single one-off event. The tort of private nuisance is committed where the defendant’s activity, or a state of affairs for which the defendant is responsible, unduly interferes with (or, as it has commonly been expressed, causes a substantial and unreasonable interference with) the use and enjoyment of the claimant’s land and is actionable only on proof of damage which is satisfied by establishing the undue interference with the use and enjoyment of the land.

A continuing nuisance is in principle no different from any other continuing tort or civil wrong and is one where, outside the claimant’s land and usually on the defendant’s land, there is repeated activity by the defendant or an ongoing state of affairs for which the defendant is responsible which causes continuing undue interference with the use and enjoyment of the claimant’s land. The cause of action therefore accrues afresh on a continuing basis.

However on the assumed facts of this case, that oil is still present on their land and has not been removed or cleaned up, there was no continuing nuisance. This is because outside the claimant’s land, there was no repeated activity by the defendants or an ongoing state of affairs for which the defendants were responsible that was causing continuing undue interference with the use and enjoyment of the claimants’ land. The leak was a one-off event or an isolated escape. The cause of action accrued and was complete once the claimants’ land had been affected by the oil. Accepting the claimants’ submission would be to extend the running of the limitation period indefinitely until the land is restored.

EU The ‘Fit for 55” package and shipping. It’s getting closer.

The EU’s ‘Fit for 55’ package, aimed at achieving a 55% reduction of greenhouse gases within the Union by 2030 over a 1990 baseline, was first published on 14 July 2021. Three proposed pieces of legislation will have an impact of shipping trading into and out of ports in an EU Member State and are coming very close to adoption.

1. Inclusion of shipping in the Emissions Trading Scheme. The Commission’s initial proposal included in the “Fit for 55” package was subject to amendments, on which a preliminary agreement was reached by the Council and Parliament on 18 December 2022, https://iistl.blog/2022/12/29/shipping-and-the-eu-emissions-trading-scheme-its-going-to-cost-you-from-2024-onwards/, with full publication of the amended Directive on 8 February 2023 https://iistl.blog/?s=Emissions+Trading.

On 18 April 2023, the legislative proposals were approved by the European Parliament, and on 25 April 2023 they were adopted by the Council. Once the new provisions are published in the Official Journal of the European Union, they will become law. The ETS will then apply to Shipping as from 1 January 2024.

2. FuelEU Maritime Regulation

The Commission proposed a Regulation mandating cuts from 2025 to 2050 to GHG intensity of energy used on board ships calling at ports within Member States of the European Union. The TRAN committee adopted the draft report of the TRAN rapporteur on the proposal on 3 October 2022. While keeping the Commission’s proposed cuts for 2025 and 2030, the report introduced higher cuts to GHG intensity of energy used on board ships than proposed by the Commission from 2035 onwards – 20% as of 2035, 38 % from 2040, 64 % as of 2045 and 80% as of 2050. It also introduces a target of 2% for the use of renewable fuels of non-biological origin from 2030. A dedicated Ocean Fund should be established to improve the energy efficiency of ships and support investment aimed at helping decarbonise maritime transport. Parliament adopted the report in Plenary on 19 October 2022.

On 23 March 2023, Parliament and Council reached a provisional agreement on the text of the new rules, which now needs to be formally approved by both institutions. https://iistl.blog/wp-admin/post.php?post=8318&action=edit

3. Regulation for the deployment of alternative fuels infrastructure (AFIR).

Maritime ports that see at least 50 port calls by large passenger vessels, or 100 port calls by container vessels, must provide shore-side electricity for such vessels by 2030. The amended AFIR is now consistent with the provisions in the FuelMaritime EU Regulation on shore-side electricity.

On 28 March 2023 the European Council and the European Parliament came to a provisional political agreement on the AFIR and is subject to formal approval by the two co-legislators.

Coming soon to the UK Supreme Court, and not coming.

UKSC 2022/0009 Herculito Maritime Ltd and others (Respondents) v Gunvor International BV and others (Appellants) “The Polar”      

What is the proper interpretation of a charter agreement and bills of landing (sic) for a vessel, in respect of losses arising out the seizure of the vessel by pirates.

The Court of Appeal decision in December 2021 is noted here. https://iistl.blog/category/admiralty-law-2/general-average/

UKSC 2022/0064       R (on the application of Finch on behalf of the Weald Action Group) (Appellant) v Surrey County Council and others (Respondents)    

Under Directive 2011/92 EU of the European Parliament and of the Council and the Town and Country Planning (Environmental Impact Assessment) Regulations 2017, was it unlawful for the Council not to require the environmental impact assessment for a project of crude oil extraction for commercial purposes to include an assessment of the impacts of downstream greenhouse gas emissions resulting from the eventual use of the refined products of the extracted oil?

Hearing on 21 June 2023

The case raises similar issues on scope 3 emissions to that in Greenpeace Ltd v (1) Secretary of State for Business, Energy and Industrial Strategy and (2) the Oil and Gas Authority; and Uplift v (1) SSBEIS and (2) the OGA (North Sea oil and gas licensing)

On 26 April 2023 permission was granted to proceed with a Judicial Review of the Government’s decision to launch a new licensing oil and gas round, without taking into account the environmental effects of consuming the oil and gas to be extracted. In the new licensing round fossil fuel companies have submitted submitting more than 100 licences to explore for new oil and gas.

And not coming,

The hearing was fixed for 19/20 June but it was announced earlier this week that the case has now settled. https://www.quadrantchambers.com/news/settlement-reached-eternal-bliss

UKSC 2021/0231       Priminds Shipping (HK) Co Ltd (Respondent) v K Line PTE Ltd (Appellant) The Eternal Bliss    

Whether the Charterers are liable to compensate or indemnify the Owners for the cost of settling the cargo claim by way of (a) damages for the Charterers’ breach of contract in not completing discharge within the permitted laytime; and/or (b) an indemnity in respect of the consequences of complying with the Charterers’ orders to load, carry and discharge the cargo.

The answer given by the Court of Appeal was ‘no’. This is now definitive.

The ‘Ever Given’ salvage claim. Contract, or Salvage under 1989 Convention and/or common law?

Two years ago the ‘Ever Given’ threatened to become the ‘Ever Stuck’ in the Suez Canal. By the time ‘Ever Given’ refloated, SMIT had a team on board (with onshore support from Holland), and two chartered tugs, ALP Guard and Carlo Magno, contributing to the salvage effort. Whether SMIT concluded a contract with the owners for their services was the preliminary issue that came before Andrew Baker J in Smit Salvage B.V v Luster Maritime S.A.. [2023] EWHC 697 (Admlty). If the answer was ‘yes’, no salvage claim would lie, only a claim under the contract. If the answer was ‘no’ Smit would be able to claim salvage under the terms of the International Convention on Salvage 1989 and/or at common law.

The owners’ case was that the following exchange of emails on 26 March 2021 resulted in the conclusion of a contract in that consensus ad idem as to all essential terms was created, with a mutual intention, notwithstanding a mutual intention to agree (and sign) more detailed terms, by the following exchange of emails that morning (UTC):

Email (i)

At 11:35 UTC, from Captain Saumitr Sen on behalf of WK Webster & Co Ltd (‘WKW’), a claims manager acting as agent appointed by owners, to Mr Richard Janssen (Managing Director of SMIT) and Mr Jody Sheilds (also of SMIT), copied to various others, stating:

“We refer to our telephone conversation subsequent to my previous email and my further conversation with Japan. As agreed over phone, I am please to confirm as below on behalf of Owners of Ever Given.

Owners agree to the following :

The tugs, dredgers, equipment engaged by SCA and their subsequent salvage claim are separate to the Smit’s offer of assistance.

a) SMIT personnel and equipment to be paid on Scopic 2020 rates

b) Any hired personnel and equipment, out of pocket expenses of SMIT to be paid on scopic 2020 rate + 15% uplift

c) Refloatation Bonus of 35% of Gross invoice value irrespective of the type of assistance rendered.

ci) Refloatation bonus not to be calculated on amounts chargeable for quarantine or isolation waiting period.

cii) Refloatation bonus to SMIT will be applicable if refloatation attempt by SCA on 26 March 2021 is unsuccessful.

We look forward to your confirmation. We can then start ironing out the wreck hire draft agreement so that the same can be signed at the earliest.”

Email (ii)

At 11:40 UTC, from Mr Janssen to Capt Sen, cc. Mr Sheilds and the others, in

reply, stating:

“Thank you Captain and confirmed which is very much appreciated. I shall inform our teams accordingly and we shall follow up with the drafting of the contract upon receipt of your/your client’s feedback to our draft as sent last night.”

Andrew Baker J found that there would be a contract between the parties if and only if they so communicated with each other as to make it appear, judged objectively, that they had reached agreement upon terms sufficient in law to constitute a contract and that they intended to be bound by those terms whether or not they agreed any more detailed set of contract terms. So long as the parties have agreed enough to be capable of constituting a contract, there was no rule of law that if terms of economic or other significance have not been finalised, the parties cannot have intended to be bound

The contract formation issue was whether there was an intention to be bound. The parties did not state in terms whether the intention was to be bound there and then, or only upon agreeing (if they did) a detailed set of contract terms, or only upon signing a written contract having first agreed such terms. Therefore, contractual intent fell to be determined by considering what was reasonably conveyed by the parties to each other about that, by the way they expressed themselves and by their conduct visible to the other, considered as a whole, at least up to and including the moment at which it is alleged that a contract was concluded. An intention to be bound cannot be found where it is not the only reasonable connotation of the parties’ exchanges and conduct, taken as a whole. Exchanges and conduct not consistent only with an intention to be bound are ambiguous, and a contract can only be found in and constructed from unambiguous communication

Andrew Baker J rejected the argument put forward by Mr Jacobs KC, based on previous salvage decisions in The Athena [2023] EWHC 697 (Admlty) and The Kurnia Dewi  [2023] EWHC 697 (Admlty) “that it is common practice in the salvage industry for main terms (remuneration/type of contract) to be agreed and then for a broader contract on WRECKHIRE or other terms to be agreed. The latter contract supersedes the previous contract, which is entered into at a time of urgency and when there is no time for a full agreement to be reached.” They were simply decisions on their own facts, applying to those facts the basic principle stated as to whether there had been an intention to be bound.

The email exchange on 26 March 2021 read objectively and in context, showed that Capt Sen and Mr Janssen did not purport to conclude a contract between SMIT, or any of the other claimants, and the defendants or either of them. The exchange showed an agreement reached on the remuneration terms for a contract that was being negotiated. But the parties made it clear to each other that they were still negotiating, indeed the detailed work of negotiating the contract terms by which they would be bound. They did not communicate to each other an intention to be bound in the absence of completing that work of negotiating and agreeing a detailed set of contract terms. That further work was not completed, as a counter-proposal on detailed terms later sent by Capt Sen put the parties some considerable distance apart, and that gap was never closed.

Therefore, no contract was concluded between SMIT and the owners.

The Seafarers’ Wages Act receives Royal Assent

A few days ago, on 23 March 2023, the Seafarers’ Wages Bill,[1] which was first introduced in the House of Lords in July 2022, received Royal Assent and became law. The Seafarers’ Wages Act 2023, as it is now called, is designed to protect seafarers who work on vessels operating an international service, but have close ties to the UK, from being paid less than the UK national minimum wage (NMW) while they are in UK waters.

To this effect, operators of vessels calling at UK ports on at least 120 occasions during a year are required to produce evidence of paying their crew the equivalent to the UK’s NMW, which, as of April 2023, will be £10.42 for those over the age of 23, £10.18 for 21-22 year-olds and £7.49 for 18-20 year-olds. While the Act specifies that the necessary evidence should be manifested in a NMW equivalence declaration, regulations made by the Secretary of State will specify the period within which, and the manner in which, the equivalence declaration is to be provided, as well as the form of the declaration.

For those operators who fail to provide the equivalence declaration or provide the equivalence declaration but operate their ship inconsistently with the declaration, the Act provides that harbour authorities have an obligation to impose a charge in respect of each occasion when their ship enters the port, as well as to refuse port access if they fail to pay the relevant charges. The amount of a surcharge is to be determined by a tariff of surcharges specified in regulations.

The Act finally creates a series of offences. For example, operators of vessels will be guilty of an offence and liable on summary conviction to a fine if an equivalence declaration is provided but the service is operated inconsistently. Whereas harbour authorities which fail to request an equivalence declaration or fail to comply with their duty to impose a surcharge or to refuse access to their port, will also face that risk.

Although the main provisions of the Act have not come into force yet,[2] any operators who continue to pay their crew at a rate below the UK NMW should start making the necessary arrangements, if they wish to continue using UK ports on a regular basis without any interruptions.


[1] For more details, see our previous post < https://iistl.blog/2022/12/07/seafarers-wages-bill-are-good-intentions-enough/> .

[2] According to section 20 (3) of the Seafarers’ Wages Act 2023, sections 3 to 15 will come into force on such day as the Secretary of State may by regulations made by statutory instrument appoint.

What’s coming in 2023?

What’s coming in 2023?

Nearly two weeks into the New Year and the IISTL’s version of ‘Old Moore’s Almanack’ looks ahead to what 2023 is going to have in store us.

Brexit. EU Retained EU Law (Revocation and Reform) Bill will kick in at end of the year. It will be a major surprise if the two Conflicts Regulations, Rome I and Rome 2 aren’t retained, but not the Port Services Regulation.

Ebury Partners Belgium SA/NV v Technical Touch BV, Jan Berthels [2022] EWHC 2927 (Comm) is another recent decision in which an ASI has been granted to restrain proceedings in an EU Member State (Belgium) in respect of a contract subject to English jurisdiction.

Electronic bills of lading. Electronic Trade Documents Bill. Likely to become law in 2023 and to come into effect two months after getting Royal Assent. The Law Commission will publish a consultation paper “Digital assets: which law, which court?” dealing with conflicts of law issues in the second half of 2023.

Autonomous vessels. The Department for Transport consultation on MASS and possible amendments to the Merchant Shipping Act 1995 closed in November 2021. Maybe some results in 2023?

Supreme Court cases

Okpabi v Royal Dutch Shell. The case may well go to trial in 2023, although in May 2022 the High Court EWHC 989 (TCC), held it was premature to grant a  Group Litigation Order and directed that each individual claimant should specify additional details to formulate a proper cause of action for the defendants to respond to.

In similar proceedings in the Netherlands in which the Court of Appeal in the Hague gave judgment in January 2021 relating to multiple oil pipeline leaks in the Niger Delta, it was announced just before Christmas 2022 that Shell will pay 15 million euros ($15.9 million) to the affected communities in Nigeria in full and final settlement on a basis of no admission of liability.

The Eternal Bliss appeal to the Supreme Court is likely to be heard in 2023, with possibility of judgment given in 2023.

But there must be a question mark over London Steam-ship Owners’ Mutual Insurance Association Ltd (Respondent) v Kingdom of Spain (Appellant), Case ID: Case ID 2022/0062 where it is stated “This appeal has been adjourned by request of the parties.”

Climate Change

IMO  Two measures aimed at reducing shipping’s contribution to GHG emissions,   EEXI and Cii, both came into force as from 1 January 2023 and will be in the forefront of the minds of those negotiating new time charters.

EU. Shipping is likely to come into the ETS system with the amendments to the 2003 ETS Directive with phasing in from 1 January 2024. Here and here.

BIMCO has produced time charter clauses to deal with all three of these measures.

Ewan McGaughey et al v. Universities Superannuation Scheme Limited is a case involving whether the investments in fossil fuels by a large pension fund in the UK breach the directors’ fiduciary duties and duties towards contributors of the pension fund. On 24 May 2022, the High Court refused permission to bring a derivative action against USSL, but the Court of Appeal gave permission to appeal in October 2022, so a hearing in 2023 is “on the cards”.

European Union

On 15 July 2022, the EU Taxonomy Complementary Climate Delegated Act covering certain nuclear and gas activities came into force on 4 August 2022 and has applied from 1 January 2023. A legal challenge against the Commission before the CJEU by various NGOs and two member states, Austria and/or Luxembourg has been threatened in connection for the inclusion of nuclear energy and natural gas in the Delegated Act. Climate mitigation and adaptation criteria for maritime shipping, were included in the EU Taxonomy Climate Delegated Act adopted in April 2021.

Previous requests from other NGOs asking the Commission to carry out an internal review of the inclusion of certain forestry and bioenergy activities in the EU green taxonomy had already been rejected by the Commission in 2022.

The Corporate sustainability reporting directive came into effect on 16 Dec, 2022

For EU companies already required to prepare a non-financial information statement, the CSRD is effective for periods commencing on or after 1 January 2024. Large UK and other non-EU companies listed on an EU regulated market (i.e. those meeting two of the three following criteria: more than €20 million total assets, more than €40 million net turnover and more than 250 employees) will be subject to the CSRD requirements for periods commencing on or after 1 January 2025. 

UK and other non-EU companies that are not listed in the EU but which have substantial activity in the EU will be subject to the CSRD for periods commencing on or after 1 January 2028.

Finally, a very happy 2023 to all our readers.

Shipping and the EU Emissions Trading Scheme. It’s going to cost you from 2024 onwards.

Over the last two years the proposed inclusion of shipping in the Emissions Trading Scheme has bounced around the organs of the EU in the trilogue procedure. The EU  Parliament’s initial proposal of 16 September 2020 was to amend  the MRV Regulation 2015/757 and to include ships of 5000 grt and over in the ETS for all voyages into and out of a port in the EU including from and to ports outside the EU, starting on 1 January 2022. The shipowner, demise charterer, and time charterer would all be responsible under the ETS for the costs of acquiring ETS allowances.

The Commission responded on 14 July 2021 https://iistl.blog/2021/07/14/bastille-day-eu-commissions-present-to-the-shipping-industry/with a proposal to amend the 2003/87/EC directive establishing the Emissions Trading Scheme (‘ETS Directive’) so as to include maritime transport within the ETS but with only 50%  cost for CO2 emissions on a voyage from or  port outside the EU to one in EU, and to a voyage from the EU to a port outside the EU. There would be a phase in period between 2023 and 2026 for surrender of allowances. Only the shipowner and demise charterer would be responsible for allowances.

The Parliament made various counter amendments in June 2022 as did the Council, noted in here  https://iistl.blog/2022/07/06/eu-inclusion-of-shipping-in-the-ets-latest-developments/.

On 18 December 2022, hopefully before the World Cup Final took place, the Parliament and Council made a provisional agreement as outlined in the press release quoted below. The text of the agreement has yet to be released but the press release quoted below indicates agreed amendments to the Commission’s proposed amending of the ETS Directive.

“EU ETS maritime

The Council and Parliament agreed to include maritime shipping emissions within the scope of the EU ETS. They agreed on a gradual introduction of obligations for shipping companies to surrender allowances: 40% for verified emissions from 2024, 70% for 2025 and 100% for 2026.

Most large vessels will be included in the scope of the EU ETS from the start. Big offshore vessels of 5000 gross tonnage and above will be included in the ‘MRV’ on the monitoring, reporting and verification of CO2 emissions from maritime transport regulation from 2025 and in the EU ETS from 2027. General cargo vessels and off-shore vessels between 400-5 000 gross tonnage will be included in the MRV regulation from 2025 and their inclusion in EU ETS will be reviewed in 2026.

In addition, the agreement takes into account geographical specificities and proposes transitional measures for small islands, ice class ships and journeys relating to outermost regions and public service obligations and strengthens measures to combat the risk of evasion in the maritime sector.

Certain member states with a relatively high number of shipping companies will in addition receive 3.5% of the ceiling of the auctioned allowances to be distributed among them.

The co-legislators agreed to include non-CO2 emissions (methane and N2O) in the MRV regulation from 2024 and in the EU ETS from 2026.”

www.consilium.europa.eu/en/press/press-releases/2022/12/18/fit-for-55-council-and-parliament-reach-provisional-deal-on-eu-emissions-trading-system-and-the-social-climate-fund/

It now looks clear that shipping is going to be brought into the EU’s ETS in just over a year’s time. This will entail added costs to voyages into and out of the EU which will fall on owners and bareboat charterers. It should be noted that, although the UK has established its own ETS, this does not currently include shipping.

An example of these coming ETS costs was given by Safety4Sea in late September 2022, https://safety4sea.com/prepare-for-higher-shipping-costs-but-the-eu-ets-should-be-a-manageable-change/, who posited the example of a voyage from Brazil to Rotterdam, using a carbon credit price of $85 per metric tonne of carbon emitted, a similar figure to the current price of $85.20 per m/t. The example has been updated in line with the recently agreed phase-in period.

The example takes a Capesize dry bulk voyage carrying iron ore from Ponta da Madeira in Brazil to Rotterdam (4,100 nm). Assuming a Capesize speed of 14 knots this would take around 12 days: at 62 tonnes per day this corresponds to 744 tonnes of fuel consumed, emitting 2,300 tonnes of CO2. As the voyage starts outside Europe, only half of the emissions qualify for allowances – 1,150 tonnes.

40% of this will need to be covered for 2024– 460 tonnes. Therefore, at a carbon  credit price on 13 December 2022 of just over EUR 85/mt of carbon emitted, the total cost for the carbon allowance would be EUR 39,100, plus a small addition for consumption in port. This compares with a fuel cost for the voyage of around EUR 520,000 (equivalent to 8%).

But two years later, in 2026, the cost for the carbon allowance would rise to 100% almost EUR 100,000 – equivalent to 20% of the total fuel bill for the voyage

For voyage charters to and from the EU, these costs will likely be reflected in increased freight rates for voyages in and out and within the EU. For time charters, although charterers bear the cost of bunkering the vessel during the currency of the charter, that does not mean that owners will be able to recover the costs of ETS allowances from them. Assuming that the EU is a permitted trading area, there is no mechanism for owners under the standard form time charters by which to recover these additional costs. The express or implied indemnity will not work, as these costs will be regarded as the natural costs of trading, as was the case in The Dimitris L [2012] EWHC 2339; [2012] 2 Lloyd’s Rep. 354, where the time charterers’ orders to proceed to the United States did not entitle the owners to be indemnified against the cost of U.S. Gross Transportation Tax.

However, specific clauses may be developed to deal with the apportionment of ETS costs. One such clause was is BIMCO’s Emissions Trading Scheme Agreement for Time Charterparties released on 31 May 2022.

The clause, which is not limited to the EU ETS, provides a mechanism for making the time charterer responsible for providing and paying for emission allowances with both parties cooperating and exchanging data necessary to facilitate compliance with any applicable ETS scheme and to calculate the amount of allowances that need to be surrendered for the period of the charterparty.

While the vessel is off-hire the charterers have the right to offset any allowances due or to require owners to return a quantity of emission allowances equivalent to that for which the charterers would have been responsible for this period had the vessel been on hire.

If charterers fail to transfer any emission allowances in accordance with the provisions in the clause, owners may suspend performance of all or any of their obligations, on giving charterers five days notice, until the time owners receive the emissions allowances in full. During this period of suspension the vessel is to remain on hire and owners are to have no responsibility whatsoever for any consequences arising out of the valid exercise of this right. The right of suspension is without prejudice to any other rights or claims owners may have against charterers under the charterparty.

Unlike many BIMCO clauses, there is no provision for the incorporation into any bills of lading or waybills issued under the charter. This makes sense as ensuring the time charterers bear the financial consequences of acquiring ETS allowances required during the currency of the charter will not directly impact on third party holders of bills of transport documents. This may happen, though, with delay due to owners operating their rights to suspend services under the clause in which case owners would be able to pass on to charterers any resulting liabilities incurred to such third parties.

New guidelines for port State and flag State authorities on how to deal with seafarer abandonment cases

Earlier this month the ILO and IMO jointly adopted guidelines for port States and flag States on how to deal with seafarer abandonment cases. The new guidelines aim to facilitate the development and implementation of practical steps for port State and flag State authorities to expeditiously and effectively resolve abandonment cases where duty holders have failed to do so.

Under the MLC, 2006, the shipowner remains liable to cover the cost of repatriation, outstanding wages, and other entitlements due to the seafarers under their employment contracts and the MLC, 2006, as well as provision of essential needs.[1] The shipowner is also required to provide adequate financial security to ensure that seafarers are duly repatriated.[2] In cases where the shipowner fails to fulfil the relevant obligations, the flag State should arrange the repatriation of seafarers.[3] If the flag State fails to do so, the responsibility to repatriate the seafarers shall rest with the port State or the State of the nationality of the seafarers.[4]

The new guidelines do not purport to bring any changes to the principles just described. On the contrary, they seek to address the practical difficulties that arise in cases of abandonment of seafarers due to lack of effective coordination and communication between flag States, port States, States in which seafarers are nationals or residents, States in which recruitment and placement services operate, and other stakeholders. In this respect, they set out a series of steps to be taken by port State and flag State authorities to expeditiously and effectively resolve abandonment cases.

The new guidelines provide, inter alia, that the port State shall immediately report an abandonment case to ILO and notify the parties involved, including shipowners, flag States, and any relevant seafarers’ representatives. Upon receiving such notification, the flag State shall urge the shipowner or financial security provider to fulfil their responsibilities in accordance with the MLC, 2006, and, if the latter fail to undertake their responsibilities within the given deadline, the flag State shall take the lead and coordinate the process for the seafarers’ repatriation. Should both the shipowner and the flag State fail to comply with their obligations, the port State shall take the lead of the repatriation process.

Most importantly, the new guidelines prompt flag States and port States to establish a consultation mechanism dedicated to the resolution of seafarer abandonment cases, as well as a domestic Standard Operating Procedure (SOP) to explicitly define the liabilities and obligations of flag State and port State authorities, and the roles to be played by other relevant government agencies and non-government entities.

Almost a decade after the MLC, 2006, entered into force, resolving seafarer abandonment cases remains a complex and time-consuming task. This is true even in the most straightforward cases where adequate financial security is available. Lack of coordination and bad communication between shipowners, financial security providers, port States, flag States, and other interested parties means that seafarers and their families have to suffer the adverse consequences of abandonment for longer. The new guidelines take positive steps towards eliminating any resulting risks. However, their non-legally binding nature can hinder their practical significance if flag States and port States are not willing to take action.


[1] MLC, 2006, Regulation 2.5.

[2] ibid.

[3] MLC, 2006, Standard A 2.5.

[4] ibid.

Seafarers’ Wages Bill: Are Good Intentions Enough?

In March 2022 P&O Ferries made 786 seafarers redundant, without prior notice or consultation. The company also announced its decision to move to a new crewing model using agency workers who would be paid less than the NMW. In doing so, P&O Ferries openly took advantage of gaps in national and international legislation governing seafarers’ wages.

In the UK, for example, the NMW, which was first introduced by the NMW Act 1998, applies to anyone employed to work on board a ship registered in the UK, unless the employment is wholly outside the UK, or the person is not ordinarily resident in the UK.[1] The right to be paid the NMW also applies to all individuals working in the territorial waters of the UK or in the UK sector of the continental shelf, provided they were not employed in connection with a ship which is exercising the right of innocent passage or the right of transit passage, as defined by the United Nations Convention on the Law of the Sea (UNCLOS), or a ship which is engaged in dredging or fishing.[2]

What this effectively means is that seafarers working on board vessels serving domestic UK routes have a right to be paid the NMW, regardless of the flag of their vessel and even if they are not ordinarily resident in the UK. However, the NMW still does not apply to seafarers working on board ships serving international routes unless their ship is flagged in the UK, and they are ordinarily resident in the UK.

At an international level, on the other hand, the Maritime Labour Convention, 2006, although it includes a series of provisions regarding the seafarers’ right to be paid for their services,[3] it does not make any binding provisions regarding the right to be paid minimum wages. In fact, the MLC is limited to set guidance as to the procedures for determining minimum wages for seafarers and the minimum monthly basic rate of pay for able seafarers working on ships operating worldwide.[4]

In response to the P&O Ferries redundancies, the UK government announced, amongst other things, its intention to change the law so that seafarers working on ships that regularly use UK ports are paid at least equivalent to the UK NMW. Following a consultation from 10 May to 7 June 2022,[5] the UK government introduced the Seafarers’ Wages Bill to the House of Lords on 6 July 2022. The Bill, which had its first reading in the House of Commons on 8 November 2022, aims to ensure that seafarers with close ties to the UK are paid at least an equivalent to the UK NMW while they are in UK waters, and contains 15 provisions.

Cl. 1 to 2 set out the scope of application. Cl. 3 to 6 establish the obligation of ship operators to make NMW equivalence declarations to harbour authorities. Cl. 7 to 9 set out the powers of harbour authorities to impose surcharges and access restrictions where ship operators have not provided a valid NMW equivalence declaration. Cl. 10 sets out the power of the Secretary of State to institute proceedings relating to offences under this Bill. Cl. 11 to 12 deal with the powers of the Secretary of State to issue guidance, directions, and regulations. Cl. 13 and 14 define terms used in the Bill, including the terms harbour and harbour authorities. Cl. 15 deals with the extent and the commencement of the provisions of the Bill.

In essence, if the Bill passes it will create a system by virtue of which harbour authorities will have the power to request ship operators, the vessels of whom use their harbours at least 120 times a year, to provide a declaration that their seafarers are paid at a rate at least equivalent to the NMW for their work in the UK or its territorial waters if they do not already qualify for the NMW.[6] In addition, harbour authorities will be able to impose a surcharge on ship operators who fail to provide a valid NMW equivalence declaration.[7] The amount of the surcharge is to be determined by a tariff of surcharges specified by harbour authorities in accordance with regulations issued by the Secretary of State.[8] A surcharge paid by ship operators may be retained and used by harbour authorities for the purposes of any of their functions or for the creation of shore-based welfare facilities for seafarers.[9] Finally, subject to very few exceptions, harbour authorities will be entitled to refuse access to their harbours if ship operators fail to pay the surcharge.[10]

Apart from the powers vested on harbour authorities, the Bill will also create a dedicated enforcement system, allowing the Maritime and Coastguard Agency to play a role in checking the validity of NMW equivalence declarations.[11] The inspectors will have powers to board a ship in a harbour in the UK or to enter any premises for the purposes of determining whether ship operators comply with any NMW equivalence declarations, or of verifying information provided to ensure compliance with these declarations.[12]

So far, the Bill has been received with scepticism. The UK Chamber of Shipping, for example, commented that the Bill could potentially undermine existing international agreements.[13] Similarly, the British Ports Association raised concerns about the compatibility of the Bill with international treaties, as well as the suitability of ports to regulate the wages of port-users.[14] Nautilus, on the other hand, pointed out that the Bill could potentially lead to ship operators ‘port hopping’ to avoid having to pay seafarers the equivalent of the NMW.[15]

Despite its good intentions, the potential impact of the Bill on underpaid seafarers working on board ships serving international routes could be minimal. First, as it was commented by Nautilus, the requirement that a ship must enter a harbour at least 120 occasions in the year for the NMW equivalence declaration to apply means that unscrupulous ship operators can easily bypass regulation by shifting their services between different ports. As the Bill appears, this is an unavoidable risk. It is the author’s view that this risk could only be avoided by a more centralised regulatory approach which would not depend entirely on casting powers on individual harbour authorities. Secondly, the fact that ship operators who fail to provide a valid NMW equivalence declaration will still be able to use a harbour if they pay a surcharge undermines the whole purpose of the Bill. This is because ship operators with significant financial means will be able to buy themselves out of regulation. After all, this is exactly what P&O Ferries did when they dismissed 786 seafarers without prior notice or consultation. Finally, adding yet another issue on the agenda of port inspectors without conducting structural changes on the way port inspections are carried out can only be of minimal practical significance when it comes to the protection of the seafarers’ employment rights.


[1] NMW Act 1998, s 40.

[2] NMW (Offshore Employment) (Amendment) Order 2020, s 2.

[3] MLC, Regulation 2.2. See also MLC, Standard A2.2.

[4] MLC, Guidelines B2.2.3 and B2.2.4.

[5] Department for Transport, Consultation outcome: Conditions for harbour access and seafarers’ pay-rates: scope and compliance, 10 May 2022 < https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1088162/seafarers-wages-consultation-gov-response.pdf> accessed 7 December 2022.

[6] Bill 184 2022-23, cl 3.

[7] Bill 184 2022-23, cl 7.

[8] ibid.

[9] ibid.

[10] Bill 184 2022-23, cl 9.

[11] Bill 184 2022-23, cl 6.

[12] ibid.

[13] UK Chamber of Shipping, ‘Seafarers’ Wages Bill’ (6 July 2022) <https://ukchamberofshipping.com/latest/seafarers-wages-bill-/> accessed 7 December 2022.

[14] British Ports Association, ‘ BPA Reacts to New Harbours (Seafarers’ Remuneration) Bill’ (10 May 2022) <https://www.britishports.org.uk/bpa-reacts-to-new-harbours-seafarers-remuneration-bill/> accessed 7 December 2022.

[15] Nautilus, ‘First reading of Seafarers’ Wages Bill’ (7 September 2022) < https://www.nautilusint.org/en/news-insight/news/first-reading-of-seafarers-wages-bill/> accessed 7 December 2022.