PM gets extension to article 50.

 

The EU last night agreed to extend the period referred to in Article 50 as follows.

Conclusions – 10 April 2019
EUCO XT 20015/19 1
EN
1. The European Council takes note of the letter of Prime Minister Theresa May of 5 April 2019 asking for a further extension of the period referred to in Article 50(3) TEU.
2. In response, the European Council agrees to an extension to allow for the ratification of the Withdrawal Agreement. Such an extension should last only as long as necessary and, in any event, no longer than 31 October 2019. If the Withdrawal Agreement is ratified by both parties before this date, the withdrawal will take place on the first day of the following month.
3. The European Council underlines that the extension cannot be allowed to undermine the regular functioning of the Union and its institutions. If the UK is still a Member of the EU on 23-26 May 2019 and if it has not ratified the Withdrawal Agreement by 22 May 2019, it must hold the elections to the European Parliament in accordance with Union law. If the United Kingdom fails to live up to this obligation, the withdrawal will take place on 1 June 2019.
4. The European Council reiterates that there can be no opening of the Withdrawal Agreement, and that any unilateral commitment, statement or other act should be compatible with the letter and the spirit of the Withdrawal Agreement and must not hamper its implementation.
5. The European Council stresses that such an extension cannot be used to start negotiations on the future relationship. However, if the position of the United Kingdom were to evolve, the European Council is prepared to reconsider the Political Declaration on the future relationship in accordance with the positions and principles stated in its guidelines and statements, including as regards the territorial scope of the future relationship.
6. The European Council notes that, during the extension, the United Kingdom will remain a Member State with full rights and obligations in accordance with Article 50 TEU, and that the United Kingdom has a right to revoke its notification at any time.

 

Accordingly, provided Parliament approves the necessary statutory instrument to amend ‘exit day’ in the EU Withdrawal Act 2018 in time, the UK will not leave the EU at 11pm  on 12 April 2019. The requisite SI is The European Union (Withdrawal) Act 2018 (Exit Day)
(Amendment) (No. 2) Regulations 2019.

Is half a deal better than a no-deal exit in a fortnight? Parliament votes today.

29 March. The government today is putting forward a motion to pass part of its withdrawal agreement with the EU, the withdrawal agreement, but not the political declaration. If this passes there will be an extension to exit day to 22 May in accordance with the agreement reached between the PM and the EU last week. If not, exit day will be 12 April unless a further extension is requested by the PM, whoever that may be. In the meantime Parliament votes again on indicative votes on Monday after the failure of any of the proposals put forward on Wednesday to obtain a majority.

 

MPs  voted by 286 to 344 to reject the government’s withdrawal agreement.

 

9 April. The House of Commons has just approved the government motion that the Prime Minister requests an article 50 extension until 30 June. Leaders of the 27 EU Member States will consider the request tomorrow at the meeting of the  Council of Ministers. If there is no unanimous agreement to extend article 50 then the UK leaves the EU without a withdrawal agreement on Friday at 11pm.

Brexit. Parliament takes control of the process but no deal exit on 12 April still a real possibility.

Last night MPs voted to take control of the Brexit process, and indicative votes will be held on Wednesday to endeavour to find a majority view in Parliament as to what form Brexit should take. This cannot affect the withdrawal process but can only give guidance as to the future negotiation after withdrawal of the relationship between the EU and the UK.

The PM stated she would introduce a statutory instrument to amend ‘exit day’ in the EU Withdrawal Act 2018 and this would be laid on Wednesday, so no exit on 29 March. Mrs Leadsom has now stated that this will take place after the indicative votes on Wednesday.

A further extension beyond 12 April can only be granted if the PM asks for one.  If the withdrawal agreement is passed then the extension would be to 22 May. If not then the UK would leave the EU on that date. It is possible that this might be forestalled by a vote of no confidence in the government followed by the appointment of a temporary PM with the mandate of requesting a further extension and ensuring the UK participates in the elections to the European Parliament on 23 May.

Brexit. UK leaves EU on 29 March?

Yes, unless ‘exit day’ in the EU Withdrawal Act 2018 is amended by statutory instrument. The procedure for this is set out here https://www.hansardsociety.org.uk/blog/changing-eu-exit-day-by-statutory-instrument. This states “Normally, from laying to making the SI, the draft affirmative procedure takes around six weeks.

However, given the steps outlined above, the process could be accelerated. We see no insuperable procedural obstacle to proceedings on the ‘exit day’ SI being completed by 29 March if the draft SI were laid, for example, on Friday 22 or Monday 25 March.”

 

No draft SI has yet been laid.

PM wins article 50 extension from EU

The PM asked for an extension of article 50 to 30 June.

The PM got a two-tier extension.

22 May if Parliament passes the withdrawal agreement

12 April if it doesn’t.

Much talk of ‘indicative votes’ in Parliament next week. If this leads to a consensus on the type of Brexit to be achieved, this could only affect the political declaration as to the  negotiation of the UK’s future relationship with the EU. The withdrawal agreement, backstop and all, cannot be changed and if it is not passed the UK leaves the EU on 12 April, subject to amendment by Statutory Instrument next week of “exit day” in the EU Withdrawal Act 2018, unless a further extension is granted. This would almost certainly require the UK to hold elections for the European Parliament on 23 May.

Brexit. Nine days to go. PM seeks short extension.

The Prime Minister has just written to the EU requesting an extension to article 50 up to 30 June. A common refrain among EU Members has been that for an extension to be granted there needs to be a plan. As Michel Barnier stated yesterday any extension must be “linked to something new, a new political event, a new political process”. It is by no means certain that the extension requested will be granted by leaders of all 27 Member States. It is possible that an extension may be granted subject to conditions, such as UK participation in the elections for MEPs on 23 May. The possibility of a no-deal exit on 29 March remains.

 

The European Commission has taken the following position on the request for an extension beyond 23 May, according to this report from Reuters a few hours ago.

The European commission opposes extending British membership of the European Union to June 30, as British prime minister Theresa May proposed on Wednesday, according to an EU document seen by Reuters.

In a note on the Brexit process reviewed by the commission at its weekly meeting on Wednesday, officials wrote that leaders meeting May at a summit on Thursday faced a “binary” choice of a short delay of  Brexit from 29 March to before 23 May or a long delay to at least the end of this year, with Britain obliged to hold an election on 23 May for European parliament lawmakers.

“Any extension offered to the United Kingdom should either last until 23 May 2019 or should be significantly longer and require European elections,” the document said. “This is the only way of protecting the functioning of the EU institutions and their ability to take decisions.”

EU states which were due to receive additional legislative seats after Brexit would need to know by mid- to late-April if they would be denied those seats because Britain was staying.

The note also said that in any extended membership, Britain should, “in a spirit of loyal cooperation”, commit to “constructive abstention” on key issues, such as the EU’s long-term budget and filling top EU posts after the May election.

 

So, that looks like a ‘no’.

No deduction from hire clause in time charter means what it says.

In London Arbitration 7/19 the tribunal decided that a clause in a time charter stating ‘Charterers have no right to make any deduction from hire payments… Chrts do not have the right to deduct from hire payment any amounts on alleged under performance, except undisputed off hire” precluded charterers from making deductions from hire by way of equitable set off. The tribunal referred to the unreported decision in Marubeni v Sea Containers Ltd 17 May 1995, in which Waller J said:

“First, in the same way as the words ‘deduction or withholding’ are not terms of art which will always include‘set-off’, they are equally not terms of art which limit their meaning to only covering taxes, levies or duties. Second, the fact that clear words are necessary does not mean that the word ‘set-off’ must be used. The words can be clear from their context. Third, what is said in one contract between other parties in one context, cannot really assist in the construction of another contract between different parties in a quite different context.”

Charterers could not deduct their off hire claims either as these were not undisputed. The charterers had argued that they had not made deductions from hire,but that hire was simply suspended, but that was a distinction without a difference.

Less than two weeks to go until the UK exits the EU – or not?

 

After last week’s votes in the Commons on Thursday, the Prime Minister will put her withdrawal deal to the Commons for a third time on Tuesday. If it is passed she will ask the Council of Ministers of the EU for an extension until 30 June. If it is rejected she will ask for a longer extension and the UK will participate in the election of MEPs on 23 May.

Any extension requires unanimous agreement from all 27 Member States. There is a possibility that this may not be obtained in which case 29 March remains ‘exit day’ – or does it? Watch this space for ferocious times in Parliament in the final week before ‘exit day’ for a motion calling on the government to revoke the article 50 notice – and then to give the EU a further article 50 notice? Interesting discussion of the legalities of this can be found at http://goodlegaladvice.co.uk/?p=12486

After Speaker Bercow’s decision this afternoon not to allow the government to bring back its defeated motion of last week for a second time, we may soon be hearing about the ‘p’ word – prorogue.

“Government interference” and laytime under the  1999 Sugar Charterparty

In Sucden Middle-East v Yagci Denizcilik Ve Ticaret Ltd Sirketi (The MV Muammer Yagci)[2018] EWHC 3873 (Comm) the Court heard an appeal from an arbitral decision  on the following point of law. “where a cargo is seized by the local customs authorities at the discharge port causing a delay to discharge, is the time so lost caused by ‘government interferences’ within the meaning of clause 28 of the Sugar Charter Party 1999 form?”. The case arose out of a substantial period of delay in the vessel’s discharge at Algiers due to the seizure of cargo by the authorities there following the identification of a discrepancy between the cargo and the relevant documents presented by the receivers. The cargo was eventually sold after a four and a half month delay in discharging the cargo.

Robin Knowles J found that delay fell within the laytime and demurrage exception in cl.28 of the Sugar Charterparty 1999 form as being caused by ‘government interferences’. The question put to the court was solely concerned with a seizure of cargo by local customs authorities at the discharge port. The ordinary meaning of the word “interference” was apt to include an intervention in this specific form, that is, by way of seizure. This action on the part of local customs authorities was, in this context, the action of government through its appropriate arm or agency. Seizure of cargo by the customs authorities was not a thing that could be treated as routine. The seizure caused the delay even if the submission of the false documents caused the seizure. The arbitrators had found that the key point would be that all the steps taken were in fact ordinary but that was incorrect. Seizure, of cargo, which is a significant exercise of executive power, cannot be regarded as “ordinary”.

 

The Hague Rules fire exception and barratry.

In Glencore Energy UK Ltd v Freeport Holdings Ltd, “The Lady M”,  [2019] EWCA Civ 388, the Court of Appeal has today upheld Popplewell J’s decision https://iistl.blog/2017/12/30/barratry-and-the-hague-visby-rules/   that article IV rule 2(b) of the Hague-Visby Rules is capable of exempting the carrier from liability to the cargo owner for damage caused by fire if that fire were caused deliberately or barratrously. Cargo owners argued that at common law a term which excluded liability for ‘fire’ would not have provided a defence if it were caused by the negligence or barratry of the crew; and consequently the exception in article IV.2(b) did not have the effect of excluding liability for fires which were caused either negligently or deliberately. The owners argued that the Judge’s interpretation of article IV.2(b) was correct. The words are clear and emphatic, and set out an exception for all loss or damage arising or resulting from fire, subject to the proviso: where the fire is caused with the actual fault or privity of the carrier. There is no proper basis for implying  a further proviso by adding the words ‘or the barratry of master or crew’, not least because ‘barratry’ is not a relevant concept in the Hague Rules.

The Court of Appeal agreed with owners’ contention. There was no sound policy reason for reading the word ‘fire’, both in isolation and in context, in a way that excludes fire where deliberately caused by the crew, from the carrier’s defence under Article IV.2(b). In cases of barratry the carrier’s agents are acting contrary to the carrier’s interests and in breach of the trust reposed in them. The construction of the fire exception was not affected by the Supreme Court’s decision in Volcafe in relation to the construction of the inherent vice exception. It was important not to lose sight of Lord Sumption’s observation that there is ‘no unifying legal principle’ behind the list of exceptions in article IV.2. The correct approach was to construe the exceptions in their own terms, while bearing in mind that they fall under a general heading and have to be construed as part of the overall scheme of obligations, liabilities and exceptions set out in articles III and IV. 66.    Lord Sumption’s observations that the carriers bore the legal burden of disproving negligence for the purposes of invoking an exception under article IV.2 did not address any argument in relation to article IV.2(b), and did not  assist on the assumed facts where there has been a deliberate act by a crew member to the prejudice of the carrier and without the carrier’s actual fault or privity.

None of the common law cases on construction of exceptions clauses assisted. There was no pre-Hague Rules judicial interpretation of ‘fire’ as a term which had a clearly assigned meaning that excluded fire caused by the crew, so that it must be presumed that it was used in article IV.2(b) in the same way. Nor did the travaux preparatoires to the Hague Rules support such a construction. Simon LJ was very doubtful as to whether the threshold for consideration of the travaux préparatoires came close to being met. This was not a provision in respect of which there were ‘truly feasible alternative interpretations’ of the words, nor was it one of those ‘rare’ cases where the travaux ‘clearly and indisputably’ pointed to a definite legal intention.

Simon LJ added: “To adopt Lord Steyn’s analogy, Glencore’s argument not only failed to hit the bullseye, it should not have been aimed at the target.”