Wed, 10 May, 2017
The Supreme Court has today given judgment in The “Ocean Victory”, an appeal which considered important issues in three areas: safe port obligations in charter parties, the impact of insurance provisions on the right to claim against third parties, and the scope of limitation of liability. All of the parties instructed members of Quadrant Chambers. James M. Turner QC was instructed by Gard, Michael Davey QC was instructed by Sinochart, and David Goldstone QC was instructed by Daiichi.
Click here to download the judgment.
The vessel “Ocean Victory” was ordered to discharge a cargo of iron ore at Kashima, Japan in October 2006. Whilst discharging, the meteorological phenomenon of “long waves” made it unsafe to remain at the berth. The vessel attempted to leave the port and in so doing met with severe weather at the entrance to the port. As a result, she grounded and was a total loss. Losses amounted to some US$ 170 million. The trial judge, with as much experience of safe port claims as any other in this field, held that the port was unsafe, since both the susceptibility to “long waves” and the danger of storms closing the entrance/exit to the port were “characteristics" of Kashima. The Court of Appeal disagreed with the judge, holding that what had to be considered was the combination of characteristics, and deciding that the combination of characteristics was not characteristic of the port. The Supreme Court unanimously held that the Court of Appeal was correct. It reaffirmed one traditional understanding of what made a port unsafe, but some may say it left unresolved a number of issues as to how tribunals are to act in what is a fertile area for shipping disputes.
Having decided that the port of Kashima was safe, none of the other points arose for decision. But the Supreme Court recognised that they were each of general importance.
The second question which arose was the right of the bareboat charterers of the vessel to bring a claim at all. The bareboat charterers alleged that as a result of the total loss of the vessel at an unsafe port, they were liable to the registered owners of the vessel and entitled to recover such loss from the time charterers who had sent the vessel to such a port. It was argued by the time charterers and sub-time-charterers that there was no such liability, as the bareboat chartering regime contemplated that the parties would look to insurance paid for by the demise charterers, to the exclusion of claims between the parties. As between registered owners and bareboat charterers it made sense that there would be no litigation, but if that ruled out claims against third parties responsible for the loss, the answer becomes less clear. The judge ruled that the charter regime did not preclude a claim. The Court of Appeal disagreed. The Supreme Court upheld the Court of Appeal by a majority of 3:2. How this will play out for other contracts with insurance -based solutions will no doubt provide much scope for debate.
Finally, the Supreme Court ruled on a relatively old question under the 1976 Convention on Limitation of Liability of Shipowners. That regime expressly brought charterers within the fold of parties entitled to limit their liability for maritime casualties, but left unanswered questions as to how limitation was intended to work as between Owners and Charterers themselves. Could Charterers limit their liability against Owners in respect of the loss of the vessel? In 2004, in the “CMA Djakarta”, the Court of Appeal ruled that Charterers could not. The House of Lords granted permission to appeal, but the case settled before the hearing. The correctness of the decision was therefore open to question, and difficulties in applying the regime in practice had led to uncertainty. The Supreme Court unanimously endorsed the decision in The “CMA Djakarta”, though it will remain a matter of controversy as to whether the workings of the regime have been fully explained by this decision at the highest level
Tue, 09 May, 2017
We are delighted to announce that Quadrant Chambers has been shortlisted for Chambers of The Year as part of The Lawyer Awards 2017.
The awards ceremony will be taking place at Grosvenor House, Park Lane on Tuesday 27th June 2017. A full list of the nominations can be viewed here.
Thu, 04 May, 2017
John Russell QC and Benjamin Coffer (instructed by Clyde & Co LLP) have obtained permission from the Supreme Court to appeal the controversial Court of Appeal decision in Volcafe v. CSAV  1 Lloyd's Rep. 32.
The Supreme Court will therefore have the opportunity to clarify the fundamental legal principles which apply in cargo claims, and in particular the burden of proof, the relationship between the defences in Article IV.2 of the Hague Rules and the obligations of the carrier under Article III.2, and the scope of the inherent vice defence.
The Court of Appeal held that, even where the Hague Rules apply, there is a legal burden on a carrier as a bailee to prove that it is not liable for the damage, by reference to the terms of the contract (including the Hague Rules and the defences in Article IV.2). However, the Court went on to hold that the carrier could discharge that burden merely by showing “a prima facie case for the application of the exception of inherent vice” . This appears to suggest that the carrier can shift the legal burden back on to the claimant by something less than proof on the balance of probabilities that an exception applies.
The Supreme Court will consider whether that conclusion was correct, or whether a carrier must go further and prove on the balance of probabilities that the loss does in fact fall within one of the exceptions. That requires consideration of the essential nature of a legal burden of proof, as well as the interaction between Article III.2 of the Hague Rules and the defences in Article IV.2.
The Court will also consider precisely what must be proven to establish the defence of inherent vice. The classic definition of ‘inherent vice’ in the carriage context is that of Gorell Barnes J in The Barcore  P 294 at 297: “[The cargo] deteriorated in condition by its own want of power to bear the ordinary transit in a ship”. In the leading decision on the defence, the House of Lords held that “ordinary transit” means “the kind of transit which the contract requires the carrier to afford” or “the voyage provided for in the contract”: Albacora SRL v. Westcott & Laurance Line Ltd  2 Lloyd’s Rep 58 per Lord Reid at 59. These dicta suggest that the defence is only available where the cargo is not capable of withstanding the contractual voyage, i.e. a voyage under the conditions of care which the carrier was contractually obliged to provide.
The Court of Appeal held that the Defendant had discharged the burden of proving that the inherent vice defence applied, because “the damage to the cargoes was due to condensation and that the source of the condensation was the coffee beans themselves” . The Court of Appeal therefore appears to have considered that the carrier is only required to prove that the moisture which caused the damage originated within the goods in order to bring itself within the defence. The Supreme Court will be asked to choose between these two possible approaches to the defence.
Tue, 25 April, 2017
Quadrant Chambers is delighted to announce the Spring 2017 issue of our International Arbitration Newsletter.
Sir David Steel provides the editorial of this edition, where he looks at recent changes to the SIAC Arbitration Rules and the ICC Rules in response to the increasing demand for international arbitration to be more efficient and cost effective.
This issue includes a guest article on third party funding in Asia by Chan Leng Sun, Global Head of Arbitration and Head of Dispute Resolution at Baker & McKenzie Wong & Leow.
Quadrant’s Koye Akoni looks at the recent decision in the long-running saga of IPCO v NNPC, where the Supreme Court held there was no jurisdiction for the English Court (as the enforcing court) to order security for an award as a condition for a party to be allowed to resist enforcement.
Please click here to view the publication.
Previous Publications - Please click on the publication to view
Thu, 20 April, 2017
Our Energy Disputes Seminar is taking place on Wednesday 26 April 2017 with the generous co-operation of CMS UK.
The programme has now been confirmed:
The seminar is free to attend and places will be allocated on a first come, first served basis. We therefore recommend early confirmation to ensure that a place is reserved for you. Registration will open at 5.30pm, with the seminar starting promptly at 6pm. Please join us after the seminar for drinks and canapés.
Thu, 13 April, 2017
Leading aviation specialist Tim Marland acted for the successful appellant aerodrome in Peires v Bickerton’s Aerodromes  EWCA Civ 273, an important decision in the Court of Appeal on the scope of the statutory immunity for nuisance under s.76(1) of the Civil Aviation Act 1982.
Since 1920 there has been a statutory immunity against actions for trespass or nuisance caused by aircraft in flight. The latest incarnation of this immunity is to be found in s.76(1) of the Civil Aviation Act 1982, and is extended to aircraft on the ground by virtue of s.77(2). In Peires v Bickerton’s Aerodromes, the Claimant, who owned a large house less than 60 metres from the boundary of Denham aerodrome, brought a noise nuisance complaint against the owners of the aerodrome in relation to the noise generated by helicopters performing a training exercise on sloping ground just inside the boundary and therefore close to her house.
At first instance Peter Smith J held that the immunity did not apply since the training operation did not involve “a flight” within the meaning of the immunity and the frequency and duration of the activities meant that they were not reasonable within the meaning of s.76(1). Tim Marland was instructed by the aerodrome for the appeal. The Court of Appeal held that the judge’s interpretation of the statute could not be justified. In reliance on the definition of ‘in flight’ in the Air Navigation Order 2016, and by reference to inter alia the Standardised European Rules of the Air, it was clear that ‘flight’ included helicopters manoeuvring to perform standard training activities. It was also clear that the only element of reasonableness within the statute was as to height, not as to matters such as frequency or duration – indeed, the very existence of the immunity presupposed that the activities complained of would be, from a common law perspective, unreasonable.
The Court of Appeal gave a written judgment in recognition of the wider implications of this decision, in particular the safety implication which would attend if helicopters performing aerial manoeuvres were not ‘in flight’ and therefore not subject to the safety regulations set out in SERA and the Air Navigation Order. In its judgment the Court has confirmed the width of the immunity and that it is not confined to flights from A to B, but essentially covers all aerial activity which is compliant with the Air Navigation Order.
A copy of the judgment is available here.
Mon, 10 April, 2017
Matthew Reeve reviews the repercussions for carriers and the remedies available to them, following the recent Hanjin litigation.
Please click here to view the full article, which was published in Volume 14, Issue 2 of International Corporate Rescue and appears here with the kind permission of the publishers, Chase Cambria.
Mon, 03 April, 2017
On 21st and 22nd March 2017, the Supreme Court heard oral argument in Taurus Petroleum Ltd v State Oil Marketing Company of the Republic of Iraq.
The principal issues in the appeal are (a) identification of the beneficiary and creditor of the issuing bank’s primary promise to pay under a letter of credit; (b) the situs of debts owed by issuing banks under letters of credit; (c) the extent of immunity from execution afforded to a State’s Central Bank by ss 13 and 14 of the State Immunity Act 1978; and (d) the principles to be applied when a court is exercising its discretion to make extraterritorial receivership orders, appointing a receiver by way of equitable execution.
Guy Blackwood QC (led by Gordon Pollock QC, Essex Court Chambers) acted for the appellant, Taurus, instructed by Holman Fenwick Willan (Jeremy Davies/Sarah Hunt).
The proceedings are recorded and can be found by following the attached link.
Fri, 31 March, 2017
We are delighted to announce the appointment of Sarah Longden to the newly established role of Business Development Director. Sarah brings with her a wealth of in-depth knowledge and experience, gathered from over 20 years in professional services marketing. She will be working closely with Chief Operating Officer Peter Blair, Senior Clerks Gary Ventura and Simon Slattery and with the marketing team, John Clements and Rebecca Ward in continuing to strengthen Quadrant’s leading presence in the legal market.
“Sarah was chosen in a competitive selection process from a strong field of high calibre applicants. She was the outstanding candidate and is a highly impressive talent, known for her experience and expertise in marketing and business development”, remarked Head of Chambers, Luke Parson QC. Peter Blair said “Sarah has an extensive background in marketing and business development and we are delighted that she is now part of the team. I am confident that her detailed knowledge and understanding of the market place will greatly assist in the further development of members’ practices and Chambers business as a whole”.
Wed, 29 March, 2017
Robert Thomas QC and Benjamin Coffer appeared for the successful claimants in The Maersk Tangier, the first English case to consider package limitation for containerised cargoes under the Hague-Visby Rules. The Judge declined to follow El Greco v. Mediterranean Shipping  2 Lloyd’s Rep 537, in which the Federal Court of Australia held that Article IV Rule 5(c) of the Hague-Visby Rules requires cargo to be enumerated in the bill of lading “as packed”. The judgment also holds that the Hague-Visby Rules can be compulsorily applicable, even where waybills rather than bills of lading are issued.
A copy of the judgment is available here.