QLU Summer 2017: The Court confirmed that the crossing rule did not apply where one vessel was navigating along a narrow channel and another vessel was navigating towards that channel with a view to entering it.

QLU Summer 2017: The Court confirmed that the crossing rule did not apply where one vessel was navigating along a narrow channel and another vessel was navigating towards that channel with a view to entering it.

In this decision, the Court confirmed that the crossing rule did not apply where one vessel was navigating along a narrow channel and another vessel was navigating towards that channel with a view to entering it. Collision cases are fact-specific and therefore it is difficult to learn lessons from them asides the obvious need to obey The International Regulations for Preventing Collisions at Sea 1972 (“Collision Regulations)”.Since few collision cases reach the Courts, we will use this decision to discuss wider issues of cover, apportionment of liability, recoverable losses and new court rules applicable to collision cases

Nautical Challenge Ltd v Evergreen Marine (UK) Ltd (The “Alexandra 1” and The “Ever Smart”) [2017] EWHC 453 (Admlty)

Facts

The VLCC Alexandra 1 was inbound to Jebel Ali approaching a narrow channel when she collided with the outbound container vessel Ever Smart at night in good visibility (10-12 miles). Ever Smart was at the time navigating within a narrow channel, and Alexandra 1 was approaching the entrance to the channel with a view to embarking a pilot and then entering the channel.

The collision occurred outside the dredged channel but within the pilot boarding area. Ever Smart had disembarked her pilot and Alexandra 1 was waiting to embark that same pilot.

The owners of Ever Smart argued that the two vessels were crossing and this involved a risk of collision. Alexandra 1 had Ever Smart on her starboard bow and therefore was under a duty to keep out of the way of Ever Smart pursuant to rule 15 of the Collision Regulations.

The owners of Alexandra 1 contended that the crossing rules had very limited, if any, application to questions of navigation in and around a narrow channel. Moreover, the crossing rule did not apply because Ever Smart was not on a sufficiently defined course.

Judgment

The court agreed with the owners of Alexandra 1. In the court’s view the crossing rule did not apply in the present case where one vessel was navigating along a narrow channel and another vessel was navigating towards that channel with a view to entering it.

The judge apportioned liability as follows: 20% Alexandra 1 and 80% Ever Smart.

  1. Where a vessel was preparing to enter a narrow channel, the narrow channel rule applied in place of the crossing rule. Rule 15, the crossing rule, did not apply to Alexandra 1 as she approached the channel. Her duty was to navigate in such a manner that, when she reached the channel, she would be on its starboard side in accordance with rule 9.
  2. Ever Smart had been in breach of rule 9 in not navigating on the starboard side of the channel, and this was irrespective of the fact that Alexandra 1 was not yet in the narrow channel.
  3. There had been a breach of rule 5 by Ever Smart in that the master had failed to keep a proper lookout, irrespective of the presence of the pilot on board, as well as a breach of rule 7 in that he had failed to confirm his assumptions as to how the ships would pass.
  4. The speed of Ever Smart had been excessive, she had failed to take avoiding action and she had failed to sound warning blasts. These failings were a result of the failure to keep a proper lookout.
  5. Alexandra 1 had failed to keep a good aural lookout and had thereby contributed to the collision.

Comments

Where a collision occurs which is 100% the fault of one vessel, that vessel shall bear her own losses and compensate the other for her losses as a result of the collision. However, because of their very nature collisions almost always involve a degree of fault by each party involved. The general rule is therefore that the total damage is calculated and the % liability of each vessel for causing the collision is calculated and each vessel's owners pay their fair percentage of the total damage.

An Owner can claim damages from the other vessel not just for the immediate loss of use of the vessel during the period of repairs but also for further knock-on effects to the vessel’s ability to return to normal trading, provided of course that such knock-on effects are not too remote or unforeseeable and that the loss can be proven by evidence. There is no set methodology for calculating loss of profits.

If a time charterer has no proprietary interest in the chartered ship they cannot recover damages for economic loss when a third party damages that ship.

Clubs will provide 100% guarantees to the damaged vessel and cargo even though they may cover only one-fourth of the liability for the collision damages. The Club concerned will then obtain counter-securities from the insured shipowner and also from the hull underwriters (or brokers) to the extent of their respective interests. Clubs now offer collision liability cover up to four-fourths, which obviates the need for such counter-securities to be obtained.

Owners’ Club will provide a Letters of Indemnity if a vessel damaged in a collision needs to be taken for repairs.

The Club will cover the insured shipowner's liability to cargo carried in his own ship, even though the Club's cargo cover is conditional upon the application of the Hague or Hague-Visby Rules and these Rules exclude claims by cargo in respect of the negligent navigation of the carrying vessel. In most jurisdictions it is indeed most unlikely that the owner of cargo in the insured vessel could succeed in a claim against the owner of that vessel in a collision situation. The cargo owner may bring a claim against the noncarrying vessel in accordance with her degree of blame, if any, but cannot recover either from the carrying vessel or from the non-carrying vessel in respect of that part of the blame attributable to the carrying vessel. However in the US there is a well-established principle called the "innocent cargo rule". The effect of this Rule, now encapsulated in the wording of the New Jason Clause, is that cargo may recover from the non-carrying vessel the whole of its loss, provided only that there is a degree of blame, however slight, upon the non-carrying vessel. The non-carrying vessel is then entitled to recover against the carrying vessel in respect of the carrying vessel’s degree of blame for the collision.

In this indirect manner the owner of the carrying vessel may become obliged to pay part of the claim on cargo carried on board his own vessel. As the shipowner would be unable to recover in respect of this payment from his hull underwriters, Club cover is extended to fill that gap.

Running down risks (RDC risks) provided by Hull and Machinery underwriters on London Terms do not cover liability such as personal injury, pollution and wreck removal.  The P&I Clubs have therefore stepped into the breach.

Members are indemnified in respect of certain costs and expenses incurred in protecting their interests before a formal inquiry into the loss of or casualty involving the entered vessel, or in connection with the defence of criminal proceedings, brought against the master  or a seaman aboard the entered vessel or some other servant or agent of the member. This head of cover is subject to the proviso that no costs or expenses shall be recoverable unless they were incurred with the written approval of the managers.

New provisions in Civil Procedure Rule 61 prioritise electronic track data. The parties are expected to make mutual disclosure and exchange of any electronic track data during the course of pre-action correspondence and, in any case, are required to disclose it within 21 days after the Defendant files its acknowledgement of service. Where both parties have electronic track data in their control, they must exchange this data within 7 days of a request by one of the parties to do so. Where a party proves uncooperative in disclosing/exchanging its electronic track data, the Court may penalise it in costs. 

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