Reed Smith Shipping Bulletin - May 2010

by Reed Smith
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In This Issue:

1 ARBITRATION...3

1.1 WHAT AMOUNTS TO TAKING A STEP IN PROCEEDINGS FOR THE PURPOSES OF SECTION (9)3 OF THE ARBITRATION ACT...3

1.2 ICSID TRIBUNAL HAS JUSRISDICTION OVER INVESTMENTS RELATING TO A SHIP...4

2 COSTS...6

2.1 CLAIMANT EXPOSED TO COSTS ORDER DUE TO FAILURE OF SOLICITOR TO OBTAIN ATE INSURANCE...6

2.2 APPROPRIATE ORDER AS TO COSTS WHERE CLAIMANT FAILING TO BEAT PART 36 OFFER BUT DEFENDANT WHOLLY UNSUCCESSFUL IN PART 20 PROCEEDINGS...7

3 EU...9

3.1 EUROPEAN COMMISSION CONVENES LEGAL EXPERT GROUP TO SEEK SOLUTIONS ON CONTRACT LAW...9

3.2 COMMITTEE ON LEGAL AFFAIRS' DRAFT REPORT REJECTS PROPOSED DELETION OF ARBITRATION EXCLUSION IN BRUSSELS REGULATION...9

3.3 WHETHER COURT SEISED HAD JURISDICTION WHERE DEFENDANT ENTERED APPEARANCE BUT DID NOT CONTEST JURISDICTION...10

3.4 GUIDANCE ON WHEN COURT SEISED OF RELATED ACTIONS PURSUANT TO APPLICATION TO STAY PROCEEDINGS...11

4 INSURANCE...13

4.1 INSURER APPLYING “BUT FOR” CAUSATION TEST...13

4.2 WHERE CLAIMANT OVERSTATED A CLAIM FOR DAMAGE FOLLOWING A FIRE IT WAS FATAL TO ENTIRE CLAIM...15

4.3 WHETHER ARBITRATORS PROPERLY DECIDING LOSSES ARISING OUT OF ONE EVENT...16

5 JURISDICTION...18

5.1 WHETHER COURTS WHERE COMPANY HAD ITS SEAT HAD JURISDICTION...18

5.2 WHETHER LATER PROCEEDINGS COULD BE STAYED WHERE THERE WERE CROSS-CLAIMS...19

5.3 INTERACTION BETWEEN BRUSSELS REGULATION AND SPECIALISED CONVENTIONS...21

6 MISCELLANEOUS...22

6.1 WHETHER DAMAGES COULD BE RECOVERED FOR LOSS OF USE OF FUNDS BY REASON OF FRAUD...22

6.2 WHETHER CONTRACTS SIGNED BY MUNICIPALITIES VOID DUE TO LACK OF CAPACITY...23

7 PRACTICE...25

7.1 GUIDANCE ON SERVICE OUT OF THE JURISDICTION AND STANDARD OF PROOF IN JURISDICTION ISSUES...25

7.2 FISHING EXPEDITION UNACCEPTABLE IN PRE-ACTION DISCLOSURE APPLICATION...29

7.3 TEST FOR USUAL RESIDENCE FOR PURPOSES OF SERVICE...31

7.4 FREEZING INJUNCTIONS: DETERMINING THE APPROPRIATE CROSS-UNDERTAKING...32

7.5 SUPREME COURT RULES ON EFFECT OF LIMITATION ON CHANGE OF CAPACITY AND ADDITION OF NEW PARTY...33

7.6 SUBSTITUTION OF NEW PARTIES AFTER EXPIRY OF THE LIMITATION...34

7.7 WHETHER REMAINING DEFENDANTS ENTITLED TO DISCLOSURE OF SETTLEMENT AGREEMENT BETWEEN CLAIMANT AND OTHER DEFENDANTS...35

8 SHIPPING...37

8.1 WHETHER SUBCONTRACTOR ENTITLED TO CONTRIBUTION FROM CHARTERER WHERE SHIP DAMAGED BY SUBCONTRACTOR...37

8.2 WHETHER SHIP MANAGERS ENTERING INTO CHARTERPARTIES AND DIVERTING DIFFERENCE IN HIRE AS PART OF FRAUDULENT SCHEME...39

8.3 WHETHER ADVANCED PAYMENT BOND ISSUED BY BANK PROVIDING FOR REPAYMENT OF “ALL SUCH SUMS DUE TO YOU UNDER THE CONTRACT” INCLUDED PRE-PAID SUMS IN EVENT OF BUILDER’S INSOLVENCY...41

8.4 WHETHER TITLE TO BUNKERS PASSED TO SHIPOWNERS ON REDELIVERY OF VESSEL...43

8.5 WHETHER OWNERS IN BREACH OF OBLIGATION TO DELIVER VESSEL READY TO RECEIVE CARGO WITH CLEAN SWEPT HOLDS...46

8.6 WHETHER OWNERS ENTITLED TO HIRE FOR EARLY AND REDELIVERY...51

Please see full newsletter below for more information.

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