Thu, 13 October, 2016
In its judgment in The Aqasia, handed down today, the Commercial Court has held that Article IV Rule 5 of the Hague Rules does not apply to bulk cargoes. Resolving a question that has been open for more than 90 years, Sir Jeremy Cooke held that there is no limit of liability in bulk cargo cases, because there is no relevant ‘package’ or ‘unit’ to which such limit can apply. Lionel Persey QC and Benjamin Coffer appeared for the successful cargo interests.
A copy of the judgment can be found here.
Tue, 11 October, 2016
Members of Quadrant Chambers have been involved in The Atlantik Confidence  EWHC 2412 (Admiralty), a landmark case in the Admiralty Court regarding the breaking of limits under the Limitation Convention 1976 (as amended in 1996). It is the first case in which an English Court has determined that a person was barred from relying on the limits provided by the Convention.
Nigel Jacobs QC and Ruth Hosking (instructed by HFW) acted on behalf of cargo underwriters (Axa) seeking to break limits, and Robert Thomas QC, Thomas Macey-Dare, and Koye Akoni (instructed by Clyde & Co) sought to maintain limits on behalf of the shipowner and P&I Club. The case arose in the context of the fire on board and subsequent sinking of the bulk carrier, ATLANTIK CONFIDENCE, about 150 nautical miles off the coast of Oman while on a laden voyage from Turkey to Oman. After a trial spanning over 7 weeks, and evidence from 12 witnesses of fact and 12 experts, Teare J concluded that the vessel was deliberately sunk by the master and chief engineer at the request of the alter ego of the shipowner. In such circumstances the loss of the cargo resulted from his personal act committed with the intent to cause such loss and Article 4 of the Limitation Convention applied so that the Owners’ claim for a limitation decree was dismissed.
Thu, 06 October, 2016
The Court of Appeal handed down judgment today (7th October 2016) in Grand China Logistics Holding (Group) Co Ltd v Spar Shipping AS  EWCA Civ 982 dismissing an appeal by unsuccessful time charterers. In doing so, it determined the controversial question of whether a charterer’s failure to pay an instalment of hire punctually and in advance under a time charterparty is a breach of condition, entitling the shipowner to terminate the charter and claim damages for the loss of the balance of the charterparty.
The Court of Appeal (Sir Terence Etherton MR, Gross and Hamblen LJJ) unanimously held that the answer to that question is “no” and that, without more, such a failure merely entitles the shipowner to withdraw the vessel from service in accordance with the withdrawal clause.
The decision, for all practical purposes, finally resolves an issue which has attracted much market interest and generated conflicting observations from judges of the highest standing. It also reviews modern principles applicable to the proper classification of a contract term as a condition.
The leading judgment of Gross LJ also contains a valuable summary of the legal principles relating to renunciation in the context of late and non-payment of hire under time charterparties.
The Court of Appeal firmly rejected a novel argument by the appellant time charterers that the test for renunciation by time charterers in relation to defaults in payment of hire (whether by late or short payment) was applied too strictly (“unwarrantably severe”) and was out of step with the Court’s approach in other non-payment contexts under different types of contract, thereby amounting to unjustified “preferential treatment” for shipowners under time charters.
Simon Rainey QC, Nevil Phillips and Natalie Moore appeared for the successful respondent owners, instructed by Thomas Cooper LLP.
Headline Summary of the Decision
The obligation to pay hire under a time charterparty is not a condition but an innominate or intermediate term. Flaux J’s decision to the contrary in The Astra  EWHC 865 (Comm) was wrong.
The obligation to pay hire promptly and in advance under a time charterparty lay at the heart of the contractual bargain represented by such a charterparty. Late and short payment would unilaterally convert a contract for payment in advance into a transaction for unsecured credit and without any provision for the payment of interest: such conduct went to the root of the contract, was renunciatory and entitled an owner to terminate.
While therefore removing the availability of a condition from the shipowner’s arsenal of remedies for non-payment of hire, the Court of Appeal has roundly endorsed the critical importance of prompt and full payment of hire in advance, and has emphatically highlighted the risks which a time-charterer takes in making payment late or in missing payments, however much it protests that it wishes or intends to perform or perform better.
If an owner wishes to be able to terminate for any failure to pay hire – irrespective of renunciation or repudiation - and claim damages in addition, it will now have to contract on special terms to this effect (cf. the hire provisions in the new NYPE 2015 form which so provide).
A copy of a fuller article written by Simon Rainey QC, Nevil Phillips and Natalie Moore can be found here.
A copy of the Court of Appeal’s judgment can be found here.
Wed, 05 October, 2016
Quadrant Chambers is delighted to announce that it has been shortlisted for Chambers of the Year, as part of the 2016 British Legal Awards.
The awards ceremony will be taking place at Finsbury Square, EC2 on Thursday 24th November 2016. Further details including a full list of the nominations are available via the attached link.
Wed, 28 September, 2016
In a judgment of remarkable length, erudition and temporal scope handed down on 28 September 2016, the Full Court of the Australian Federal Court allowed the shipowners’ appeal in Ship “Sam Hawk” v Reiter Petroleum Inc  FCAFC 26.
The Claimant, Reiter, had claimed that its contract with the vessel’s time charterer for the supply of bunkers had bestowed a maritime lien over the vessel in its favour. That was because, it said, the terms of the bunker supply contract provided for US law to determine the existence of such a lien.
Overturning the first instance judge, the Full Court held unanimously that, on any view, the governing law of the contract could not determine that question, not least because the shipowner was not a party to it. It could only be governed by the law of the place of supply (Turkey), the law of the flag (Hong Kong) or the law of the forum (Australia). There was no evidence that the laws of Turkey or Hong Kong differed from that of Australia, which did not recognise a maritime lien for bunkers.
A majority of the Court (Rares J dissenting) also held that the majority in the well-known (though much-criticised) Privy Council decision in The Halcyon Isle  AC 221 was correct, so that the characterisation of the claim as giving rise to a maritime lien (or not) was a matter for the law of the forum, not of the lex causae.
This is a potentially important decision for bunker suppliers and shipowners in particular. It is also questionable whether it represents the law of England & Wales, which may well have been altered by the Rome I and II Regulations on Contractual and Non-Contractual Obligations, under which remedies are to be governed by the lex causae and not the law of the forum.
Both the leading and dissenting judgments of the Full Court made reference (among myriad other authority) to the recently-published second edition of The Law & Practice of Admiralty Matters (OUP, 2016), by Professor Sarah C. Derrington of the University of Queensland (an associate member of Quadrant Chambers), and James M. Turner QC.
Mon, 19 September, 2016
We are delighted to announce our nominations for the 2016 Chambers Bar Awards.
In addition to Quadrant Chambers again being nominated for Shipping Set of Year, Simon Rainey QC has again been nominated for Shipping Silk of the Year and Nevil Phillips has been nominated for Shipping Junior of the Year.
The 2016 Chambers UK Bar Awards will be held at The London Hilton on Park Lane on Thursday, 27th October. A full list of the nominations and can be viewed here.
Fri, 16 September, 2016
Quadrant Chambers is delighted to again be ranked as a leading barristers’ chambers within the 2016 edition of The Legal 500.
In addition to 46 barristers receiving individual rankings across 8 practice areas, Quadrant Chambers is recognised as a leading set in Aviation, Commercial Litigation, Commodities, Energy, Insurance and Reinsurance, International Arbitration and Shipping.
The Guide recognises Quadrant Chambers as being “known for the rigour and talent of its barristers” who “demonstrate strong knowledge and ‘a commercial approach” and that “the clerking team is close-knit and genuine, and one of the best in London”
All results regarding Quadrant and its members can be accessed here.
Thu, 15 September, 2016
Chirag Karia QC of Quadrant Chambers has secured a landmark ruling from the Commercial Court that an arbitral tribunal has the power to award litigation funding costs (including uplift and success fees paid to a professional litigation funder) as “other costs” under section 59(1)(c) of the Arbitration Act 1996. The sole arbitrator in the ICC reference below had ruled that Chirag’s client (Norscot) was entitled to recover the fees it had paid to its professional litigation funder, being the larger of 300% of the costs advanced by the funder or 35% of the sum recovered by Norscot, from the respondent in that reference (Essar). Upon the hearing of Essar’s challenge under section 68(2)(b) of the Arbitration Act 1996, the Commercial Court held, inter alia, that arbitral tribunals have the power to award litigation funding costs and fees as “other costs” under section 59(1)(c) of the 1996 Act. Chirag was assisted by Nicholas Bacon QC of 4 New Square in the case. See, Essar Oilfields Services Ltd (Mauritius) v Norscot Rig Management Pvt Ltd (Mauritius).
Thu, 08 September, 2016
Quadrant Chambers sponsored the 2nd IPBA Asia-Pac Arbitration Day in Kuala Lumpur.
Luke Parsons QC delivered a paper on “Independence, Impartiality and Conflicts of Interest in Arbitration”, which also reflected on his involvement (leading Caroline Pounds) on the highly published Judgment of W -v- M earlier this year. Luke’s paper and additional information about this event can be found via the links below.
Luke Parsons IPBA Paper please click here
Lord Saville's Keynote please click here.
IPBA Information please click here
Fri, 02 September, 2016
It is understood that, on Thursday, 1 September 2016, the Seoul Central District Court accepted a rehabilitation application made by Hanjin Shipping Co Ltd on 31 August 2016, and that, as part of the resulting procedure, the Court required a revival plan to be submitted by 25 November 2016 and appointed the company’s Chief Executive Officer, Seok Tae Soo, as the Manager for that purpose.
The entry of Hanjin into rehabilitation in this way has had a significant impact in the global shipping market, given the size and scope of the business structure of the company (thought to be the world’s 7th largest container carrier). Already, it is understood that a number of Hanjin vessels have been arrested at Chinese ports (including Tianjin and Shanghai) and in Singapore, while there are reports that other Hanjin vessels have been refused entry to ports in North America and South Korea because of fears by service-providers of non-payment. This has produced a spike in freight rates, as manufacturers (which include LG and other Far East producers) seek alternative carriage providers. Hyundai Merchant Marine Co., South Korea’s second-largest container line, has already sought to add vessels to the busiest routes previously operated by Hanjin in order to ease the pressure.
As experienced professionals from the London shipping legal market will know, the experience of Hanjin is, unfortunately, not the first occasion on which a substantial international shipping entity has encountered such difficulty and been placed into rehabilitation or a similar asset-protection procedure in its home jurisdiction. In recent times, the market has witnessed similar procedures affecting Korea Line Corporation, STX Pan Ocean, Samsun Logix, and Sanko Steamship, among others.
As a consequence of such earlier rehabilitation/restructuring events, the potentially complex issues of law which arise (as the entity entering into rehabilitation, its third party contractual counterparts, and other entities affected by the knock-on effects of the rehabilitation all seek to establish, accommodate and resolve its consequences) are ones which the London legal market is well-equipped to address (where, as is very common, the underlying contractual relations are governed by English law and/or are subject to English jurisdiction or arbitration agreements).
Such issues will include the effect of the rehabilitation procedure (as a matter of English law) upon long-term charters, slot arrangements, and pooling agreements; its impact upon service providers and other third party creditors; the possibility of claims by chartering and cargo interests for increased carriage charges (as a result of the need to procure replacement tonnage or carriage services) or in respect of stranded cargoes; the effect of rights of lien; the scope for arrest; the potential effect of international recognition (by way of the Cross Border Insolvency Regulations 2006) of any insolvency measures implemented in South Korea; and the interaction (as a matter of private international law) between English law (where that is the governing law of a contract) and the law of South Korea (as the law of the place of rehabilitation/restructuring).
At this very early stage of Hanjin’s rehabilitation procedure, it is impossible to predict precisely what issues will arise as a consequence. However, previous experience suggests that commercial parties who are affected by the events as they unfold will benefit from prompt and comprehensive advice as to their position as a matter of English law.
Given their pre-eminence in the field of shipping law, and their involvement at almost every level in earlier substantial rehabilitation/restructuring events in the shipping market (including those referred to above), members of Quadrant Chambers are very happy to provide assistance in this respect where required.
Nevil Phillips is a highly regarded barrister whose practice extends across the full spectrum of shipping and commercial law and who is consistently ranked as a Leading Junior in both domestic and international legal directories. He has recently featured as successful counsel in a number of high profiles cases, including SBT Star Bulk and Tankers (Germany) GmbH Co KG v Cosmotrade SA (The Wehr Trave),Spar Shipping AS v Grand China Logistics Holding (Group) Co Ltd and Libyan Navigator Ltd v Lamda Maritime Holdings Sp. z.