RS Shipping Bulletin November 2010

by Reed Smith
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In This Issue

1 ARBITRATION ...3

1.1 COURT OF APPEAL CONFIRMS THAT SECTION 72 ARBITRATION ACT 1996 IS NOT RESTRICTED TO PROCEEDINGS CONCERNING THE TRIBUNAL’S SUBSTANTIVE JURISDICTION ...3

1.2 ONLY THE AWARD AND THE RELEVANT CONTRACT MAY BE PUT BEFORE THE COURT IN AN APPEAL FROM AN ARBITRATION AWARD ON A POINT OF LAW ...3

1.3 HIGH COURT REFUSES TO REMOVE AN ARBITRATOR FOLLOWING ALLEGATIONS OF BIAS ...4

2 CONTRACT ...5

2.1 IS A GUARANTOR’S LIABILITY TRIGGERED ON PROOF OF A BREACH OF CONTRACT OR BY DEMAND ALONE? ...5

2.2 HOW LONG DOES A PARTY HAVE TO ACCEPT A REPUDIATORY BREACH BEFORE THAT PARTY’S INACTIONIS TAKEN TO AFFIRM THE CONTRACT? ...5

3 COSTS...7

3.1 CAN A COSTS ORDER BE SET OFF AGAINST A DAMAGES AWARD? ...7

4 DISCLOSURE ...8

4.1 LEGAL PROFESSIONAL PRIVILEGE DOES NOT APPLY TO ANY PROFESSIONAL OTHER THAN A QUALIFIED LAWYER ...8

4.2 THE COMMERCIAL COURT CONSIDERS THE ISSUES RELEVANT TO MAKING A DISCLOSURE ORDER IN THE CONTEXT OF AN APPLICATION UNDER S.51 SENIOR COURTS ACT 1981 , IN A SITUATION WHERE THE APPLICANT HAS BEEN THE VICTIM OF FRAUD ...8

4.3 THE COURT DOES NOT HAVE JURISDICTION TO ORDER PRE-ACTION DISCLOSURE WHERE THE PARTIES HAVE ENTERED INTO AN ARBITRATION AGREEMENT ...9

5 EU ...11

5.1 COUNCIL REGULATION 961/2010, DEALING WITH SANCTIONS AGAINST IRAN, COMES INTO FORCE ...11

5.2 IRAN (EUROPEAN COMMUNITY FINANCIAL SANCTIONS) (AMENDMENT)

REGULATIONS 2010 COME I NTO FORCE ...11

6 GAFTA ...12

6.1 HOW IS THE PHRASE “READINESS TO LOAD” TO BE INTERPRETED IN GAFTA FORM 49? ...12

7 INSURANCE ...13

7.1 COMMERCIAL COURT REJECTS ATTEMPT BY AN INSURER TO AVOID A POLICY ON THE GROUNDS OF FAILURE ON THE PART OF THE INSURED TO DISCLOSE MATERIAL FACTS ...13

7 . 2 WHERE AN INSURANCE POLICY PROVIDES FOR ARBITRATION WITHIN A CERTAIN TIME LIMIT, DOES THE EXPIRY OF THIS TIME LIMIT TERMINATE THE RIGHT TO BRING A CLAIM UNDER THE POLICY?. . . 13

7 . 3 COURT OF APPEAL RULES ON THE LAW APPLICABLE TO REINSURANCE CONTRACTS UNDER THE LUGANO CONVENTION . . . 15

8 JURISDICTION . . . 16

8 . 1 ACCEPTANCE BY CONDUCT OF A COUNTEROFFER INCORPORATING AN EXCLUSIVE ENGLISH LAW AND JURISDICTION CLAUSE . . . 16

9 PRACTICE AND PROCEDURE . . . 18

9 . 1 SUPREME COURT RECOGNISES NEW EXCEPTION TO THE WITHOUT

PREJUDICE RULE . . .18

9 . 2 IT IS WITHIN THE COURT’S DISCRETION TO DISPENSE WITH SERVICE OF A PENAL NOTICE WHERE THE FAILURE TO SERVE CORRECTLY HAS CAUSED NO PREJUDICE . . . 18

9 . 3 WHEN JUDGMENT SUMS IN DIFFERENT CURRENCIES ARE TO BE SET OFF AGAINST EACH OTHER, WHAT IS THE APPROPRIATE DATE FOR CONVERSION OF THESE SUMS INTO THE SAME CURRENCY? . . . 10

SALE OF GOODS . . . 21

1 0 . 1 WHEN GOODS CONFORM TO SPECIFICATION ON LOADING, BUT NO LONGER CONFORM ON DISCHARGE, IS THE SELLER IN BREACH OF ITS IMPLIED DUTY UNDER THE SALE OF GOODS ACT 1979? . . . 21

11 SHIPPING . . . 22

1 1 . 1 TRIBUNAL CONSIDERS OWNERS’ ENTITLEMENT TO DEMURRAGE OR DAMAGES ARISING OUT OF PERIODS OF DELAY . . . 22

1 1 . 2 COMMERCIAL COURT CONSIDERS VARIOUS POINTS ARISING FROM

THE CLAUSE IN SHELLTIME 4 DEALING WITH OIL MAJOR APPROVALS...22

1 1 . 3 TRIBUNAL CONSIDERS THE POINT AT WHICH A VESSEL BECOMES AN “ARRIVED SHIP” FOR THE PURPOSES OF TENDERING NOTICE OF READINESS . . . 23

1 1 . 4 WHEN CARGO HOLDS ARE REJECTED , IS THE VESSEL OFF-HIRE ON A “NET LOSS O F TIME” OR “PERIOD OFF-HIRE” BASIS UNTIL THEY ARE ACCEPTED ? IS THERE AN IMPLIED OBLIGATION ON THE CHARTERER TO ENSURE RE-INSPECTION AS SOON AS POSSIBLE? . . . 24

1 1 . 5 CARGO CLAIMS: ISSUES OF LIABILITY AND THE CAUSE OF THE

ARREST AND DETENTION OF THE VESSEL . . . 25

Please see full Newsletter below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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