Welcome to our marine newsletter for October 2018. In this edition we consider the implications of recent maritime decisions, concerning deviation and the Hague/Hague-Visby rules, the incorporation of the InterClub Agreement in a charterparty and whether drug smuggling is a malicious act for the purpose of the Institute War and Strike Clauses. We also provide an update on the mortgage registration process in Saudi Arabia, on developments in Brazil's customs regulations and on the new judicial agreement between Singapore and China.

Geographical Deviation and the Hague/Hague-Visby Rules

In international sea carriage, deviation from the usual geographic route has traditionally deprived the carrier of the rights and defences (including time bar) available under the Hague and Hague-Visby Rules.

This had been questioned in light of the abolition of the "fundamental breach" rule by the House of Lords in 1980. However, the recent case of Dera Commercial Estate v Derya Inc [2018] EWHC 1673 (Comm) ("Dera v Derya") has confirmed that the principle remains valid. Read more.

Acting Maliciously?

The question of whether drug smuggling was a malicious act has been tested in the UK's Supreme Court.

It is widely acknowledged that trading in certain parts of the world carries with it particular risks, such as piracy, political uncertainty, social instability, corruption or drug trafficking. Colombia and surrounding countries, such as Venezuela, carry a particularly large risk in relation to drug smuggling where, despite the fact that law enforcement agencies have tightened up security to prevent smugglers from attaching drug-filled containers to ships, traffickers continue to regard ocean carriers as a cheap and relatively risk-free way to move their product internationally. All that is required is to find a way to attach the drugs to the hull of the vessel in one port and to retrieve them in the desired destination. The involvement of the captain or the crew is neither necessary nor, in fact, desired. Read more.

London Arbitration 18/18 – Caution when Incorporating ICA Terms in a Charterparty

London Arbitration 18/18 serves to highlight the care that should be taken over the precise wording of clauses used in charterparties to incorporate the Inter Club Agreement (ICA).

This arbitration concerned a charterparty on an NYPE 1946 form with additional clauses, which contained a provision stating that liability for cargo claims was to be apportioned between the parties pursuant to the ICA. The Tribunal held that this clause was insufficient to also incorporate provisions of the ICA relating to security. Read more.

Registration of Mortgage over Marine Vessels in Saudi Arabia

Saudi Arabia is implementing drastic changes to transform the Saudi market, attract substantive foreign investors, and develop all public and private sectors. We have recently witnessed essential changes in the transportation sector and the security regime under specific finance transactions. As a result, Saudi officials are currently adopting eased procedures to govern commercial transactions entered with Investors. This article outlines everything you should know about the mortgage registration process before investing in marine vessels in Saudi Arabia. Read more.

Enforcing a Singapore Judgment in China Should Get Easier with the New Singapore Judicial Agreement

The Supreme Court of Singapore and the Supreme People's Court of the People's Republic of China recently signed a Memorandum of Guidance, which is expected to make it easier for money judgments issued by the Singapore courts to be recognized and enforced in the Chinese courts (and vice-versa). Read more.

Brazilian Regulation on the Presentation of the Original Bill of Lading at Delivery

Shippers and other maritime parties suffered for a while as a result of a Brazilian rule which allowed consignees to take delivery of cargo without the presentation of an original Bill of Lading. However, a development in Brazilian customs regulations brought relief to this situation, in the form of the Federal Revenue's Normative Instruction nº 1759/2017, which entered into force on 14 November 2017. Read more.

What's New

A Practical Overview of the IMO 2020 Sulphur Cap - Part 1
Written by Beth Bradley, Benjamin Bryant and Ioanna Tsekoura

Court of Appeal decision in "Alexandra 1": It takes two to cross
Written by Irvine Marr, David Owens and Martyn Haines

The International Comparative Legal Guide to Shipping Law 2018
Written by Ed Mills-Webb and Mark Tilley

Time Bars: Mind your Ps and Qs
Written by Nick Austin and Stuart Jackson

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.