Monday, June 15, 2020

As Ever the Seemingly Limitless Legal Possibilities for Interpreting the World of Logistics Continue

Maritime Law Throws Up Yet Another Precedent in Latest Limited Liability Case
Shipping News Feature

UK – WORLWIDE – One of the fascinating things about the logistics industry is its ability to throw up a seemingly infinite number of new legal precedents, despite the fact that it has a well-documented history going back generations. Perhaps this is somewhat understandable with some of the newer transport modes such as intercontinental haulage but, despite the fact men have been shipping goods by water for centuries, it is here we often come across the most interesting cases.

This month insurance group the Shipowners’ Club has highlighted such a case, publishing an article written by Ian Teare and Matthew Dow of Law Firm, Wikborg Rein, in which the pair go through the finer points of a recent Court hearing required to determine the comparative meanings of the terms ‘Manager’ and ‘Operator’ as they apply to running a vessel under the terms of the Limitation Convention 1976.

The case concerns a collision between two vessels on 20 November 2016 in which both vessels had been driven towards the coast under the influence of adverse weather conditions created by Storm Angus. The happenings that night led to a Marine Accident Investigation Branch (MAIB) report being published, but a précis of the Limited Liability case centres on the relationship between three protagonists involved in the incident at sea which injured the third party, Reseau de Transport D’Electricite (RTE), when a dragging anchor damaged that company’s undersea cables.

Three associated companies Stema A/S and Stema Shipping (UK), the former selling the cargo of rock to the latter, and the owner of the vessel, Stema Barge ll namely Splitt Chartering APS, all claimed a limit of their liability over the affair. Splitt had chartered the barge to Stema A/S.

Whilst RTE accepted that Split and Stema A/S were entitled to limit their liability, it put to the Court that the third defendant company, Stema UK, was not. It seems the fact that the three companies, all part of the Mibau Stema Group, were related had some influence of the style of the charterparty contract which was not considered a conventional one by the lawyers.

That agreement however was not challenged, with all parties accepting Stema A/S was indeed the charterer, however evidence presented indicated that Stema UK had more than a limited influence on matters involving the barge, indeed one would imagine given the name of the vessel that things were bound to be a little complicated.

And so it proved, an employee of Stema A/S stated that he was ‘an Operator [with] daily responsibility for the operation of barges owned by Splitt’. Stema UK argued that the number of activities for which they themselves were responsible was also sufficient to amount to management and control and thus they could also properly be described as an Operator.

Opposing this RTE pointed out that Stema A/S was both the Charterer and the Operator whilst Stema (UK) merely the owner of the cargo with certain responsibilities toward work on the barge, insufficiently important to make them the Operator. It was accepted by both sides in this case that there might be some overlap between the meanings of Operator and Manager.

To cut to the chase, the judge decreed that the nature of Stema UK’s operation of the barge during the relevant period was such as to make it appropriate to describe them as the Operator and thus entitled to limit their liability. He also pointed out that by using the word ‘the’ RTE was arguing that there could only be one operator, whereas division of operational tasks made this an incorrect assumption.

So Stema (UK) got their liability limited, however the case, as so often, raises more questions than answers. What proportion of managing a ship’s operation makes one an Operator? As the authors conclude, there was no single piece of evidence which alone pointed definitively towards the conclusion, which is why the Judge was at pains to say that he was ‘taking all of the evidence as a whole and in the round’.

To read the account in full click on this link.

Photo: Courtesy of MAIB.