believe could have been prevented by ventilation, particularly when ventilation was not carried out or there was a failure to keep a proper ventilation record.
The club is aware of several clauses which members may consider adopting, including the BIMCO Cargo Fumigation Clause for Charter Parties. This provides clear allocation as to the responsibilities, risks and costs arising from cargo fumigation operations on board ships. Other relevant provisions include Clauses 10 (Seaworthy Trim) and 11 (Fumigation) of SYNACOMEX 2000 and Clause 16 of GRAINCON.
Other contracting arrangements may include the division of responsibility for cargo damage and loss. When preparing a fixture, an owner may want to, for example, look to specifically shift responsibility for cargo claims resulting from soya beans loaded off-specification with an excessively high moisture content on to the charterers. The club would in any event usually recommend incorporation of the Inter-Club Agreement (ICA) as a minimum, whereby the ICA serves as a useful mechanism in apportioning responsibility for cargo claims in certain circumstances. See the guide to the ICA on the club’s website.
The club has previously provided members with updates on the club’s website on the case of the Yangtze Xing Hua from the English courts, which dealt with soya bean meal and delays to the cargo. In this case, the Court of Appeal upheld the decision of the Commercial Court3
. The case serves as useful
confirmation that damage to a cargo which is caused by the prolonged stay of the ship at a port at the express orders of the charterers will be treated as a cargo claim falling under Clause 8(d) of the ICA 1996. It was held that the term ‘act’ in the phrase ‘act or neglect’ in Clause 8(d) of the ICA should not be confined to culpable conduct
3 Transgrain Shipping (Singapore) Pte v Yangtze Navigation (Hong Kong) Co Ltd (The “YANGTZE XING HUA”) [2017] EWCA Civ. 2107
and should be given its broader meaning. The decision confirmed the role of the ICA as a rough and ready mechanism to apportion liability, whereby the ICA deals with causation and not culpability as the measure for apportionment.
Notwithstanding best efforts by members in their contracting arrangements, some factors may be beyond the control of even the most prudent carrier. These may include the various loading and discharge conditions as well as the acceptable margins for moisture content in Brazil compared to what may be considered as acceptable in China. For example, in Brazil, the generally maximum allowable moisture content of soya beans for export is 14%. However, the national standard set up by China (GB1352- 2009) states that moisture content should be equal to or less than 13%. It is important that clear evidence is obtained to show the exact water cargo condition on loading.
The club is aware that the Chinese courts will usually not acknowledge or accept expert findings from other jurisdictions, so a preloading survey demonstrating poor preshipment quality may not help defend the case. The Chinese courts often only accept findings from local experts.
The International Group is working with local partners in China to try to raise awareness of this issue such that local experts may in future be able to attest to any deficiencies in the preshipment quality where applicable.
Should members face any potential claims relating to soya beans, the following list of documents is not exhaustive but usually serves as a useful starting point in the investigation of such claims and the club would encourage members to collect and retain at least this information:
– Bill/s of lading – Mate’s receipt/s – Preloading survey report – Moisture certificate or certificate of quality at shipment
– Stowage plan – Ventilation records.
The club has experience of claims for soya beans in various jurisdictions and most notably in China, with the club’s Hong Kong office providing valuable insight into the practice of receivers and local courts. In the event that a member is presented with a claim relating to soya beans, they should approach their usual claims contact for assistance.
This advice has been prepared with the kind assistance of the Food and Agricultural Commodities Department of CWA International, London.
This information is published on behalf of The Standard Club Ltd by the managers’ London agents:
Charles Taylor & Co. Limited The Minster Building, 21 Mincing Lane, London EC3R 7AG Registered in England No. 02561548
Telephone: +44 20 3320 8888 Emergency mobile: +44 7932 113573
Email:
pandi.london@
ctplc.com Website:
www.standard-club.com
Authorised and regulated by the Financial Conduct Authority FRN 785106
The information and commentary herein are not intended to amount to legal or technical advice to any person in general or about a specific case. Every effort is made to make them accurate and up to date. However, no responsibility is assumed for their accuracy nor for the views or opinions expressed, nor for any consequence of or reliance on them. You are advised to seek specific legal or technical advice from your usual advisers about any specific matter.
The Standard Club Ltd is regulated by the Bermuda Monetary Authority.
60 | The Report • June 2019 • Issue 88
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