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Shipping Offshore Update December 2021

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Shipping Boom on the Norwegian stock market

After a period of strong headwinds, the shipping industry sets course for historic annual results. High demand for goods combined with a lack of supply and a lean world fleet has driven freight rates and shipping shares through the roof.


Limitation of liability for collisions claims in respect of wreck removal expenses

A recent decision in the Norwegian proceedings relating to the collision between the Norwegian navy frigate “Helge Ingstad” and the oil tanker “Sola TS” saw Hordaland District Court weigh in on a question that has been the subject of international debate for some time. The court held that the Norwegian state’s indemnity claim against the owners of the “TS Sola” in respect of the costs of the removal of the wreck of the “Helge Ingstad” is subject to the limitation amount for claims in respect of property damage and not the separate and higher limitation amount for claims in respect of clean-up and wreck removal.


Are lawyers’ notes from crew interviews legally privileged?

In another recent decision in the Norwegian proceedings relating to the collision between the Norwegian navy frigate “Helge Ingstad” and the oil tanker “Sola TS”, the Gulating Court of Appeal has held (LG-2021-115658) that notes taken by lawyers from crew interviews were legally privileged and such privilege had not been waived by disclosure in the proceedings of a report referencing content from those notes.


The right to claim deprivation interest in pollution incidents in Norway

Norwegian authorities normally respond to an oil spill or other type of pollution along the Norwegian coast by initiating a state-led operation, often involving significant costs. A recent amendment to the Norwegian Pollution Act has created a statutory legal basis for the authorities, when claiming reimbursement from the owners, to include a claim for so-called deprivation interest as from the time the relevant costs were incurred.


Whose liability is it anyway? Apache UK Investment Limited v Esso Exploration and Production UK Limited (2021) EWHC 128

On the 17 May 2021, the Commercial Court clarified the proper interpretation of the Petroleum Act 1998, dealing specifically with the extent of previous licensees’ liability in decommissioning programmes.


Eternal Bliss did not last forever for shipowners Court of Appeal overturns decision narrowing scope of demurrage

The High Court decision last year in The Eternal Bliss changed the landscape for owners and voyage charterers by establishing that damages in excess of demurrage can be claimed by owners, even where the only breach was the failure to load and discharge within the laytime. Demurrage had previously been thought to be a complete code for damages caused by that breach. Judgment has now been handed down in the Court of Appeal overturning that decision.


Tiered dispute resolution clauses – problems in drafting

There are various forms of tiered dispute resolution clauses requiring negotiation and/or mediation before arbitration, and difficulties may arise when the procedure is not followed. A recent English case, NWA and Other v NVF and Others [2021] EWHC 2666, has added further insight to the interpretation of these clauses and the need for clarity in their drafting.


High Court provides further guidance on implied terms under English law

In the shipping and offshore industry, guarantees are frequently given as security for a legal promise for performance of a separate or primary contract. However, as guarantees are themselves a form of security, do they also contain an implied term that security cannot be sought for breaches of their provisions? That question was recently answered by the High Court in CVLC Three Carrier Corp v Arab Maritime Petroleum Transport Company [2021] EWHC 551 (Comm).


Always on demand? – Shanghai Shipyard Co Ltd v Reignwood International Investment (Group) Company Limited

On 23 July 2021, in a decision with potentially far-reaching implications for the shipbuilding industry and for guarantees generally, the Court of Appeal issued a judgment addressing what makes a guarantee issued by an entity other than a financial institution a “demand guarantee" rather than a “see to it guarantee”.


Equipment leasing in the maritime industry – protection of legal title

Companies leasing out equipment for use on board vessels need to be mindful of the legal risks and challenges in protecting legal title to their equipment. In this article we have highlighted potential threats and possible measures of mitigation.


MARPOL Annex VI – EEXI AND CII – can your contracts cop?

The IMO recently introduced amendments to MARPOL Annex VI aimed at improving the technical and operational efficiencies of all types of ships. These amendments are expected to enter into force as soon as 1 January 2023. The amendments introduce the Energy Efficiency Existing Ship Index (EEXI), a technical measure concerned with ship design, and the Carbon Intensity Indicator (CII), an operational measure concerned with a ship’s trading and operation.


Decarbonisation in shipping – the EU proposals

On 14 July 2021 the European Commission published its “Fit for 55” package setting out various legislative proposals to enable the EU to reach its objective to reduce emissions by at least 55% by 2030 (as compared to 1990 levels).


The EU ETS expands to shipping

One of the most talked about and controversial aspects of the EU’s proposed “Fit for 55” package is the European Commission’s proposal for a revised Emissions Trading System (EU ETS). This article examines the proposal and details its potential impact on the shipping industry.


Key aspects of FuelEU Maritime proposal

On 14 June 2021, the European Commission presented a package of proposals aimed at ensuring that the European Union achieves its goal of cutting greenhouse gas emissions by at least 55% by 2030. The proposals include, amongst other things, the new FuelEU Maritime initiative, specifically aimed at the shipping industry.