MANAGING MAJOR MARINE CASUALTIES IN THE 21ST CENTURY:A WHOLE NEW BALL GAME
3RD ASIA MARINE CASUALTY FORUM 11 APRIL 2019
MICHAEL RITTERT: +44 20 7264 8449E: [email protected]
TOBY STEPHENST: +65 6411 5379E: [email protected]
A Case Study of “SANCHI” c/w “CF CRYSTAL”
THE OLD SCHOOL
CASUALTIES IN THE 20TH CENTURY
WHAT HAS CHANGED?
CASUALTIES IN THE 21ST CENTURY
• Communications
• Email!
• SCOPIC
• Greater Governmental Intervention:
• Local Government
• Regional Government
• National Government
• Investigations:
• Flag State
• Port State
• ISM
• Charterers / Oil Majors
GREATER ENVIRONMENTAL PRESSURE
WHAT HAS CHANGED?
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60
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100
120
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160
18019
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19
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LOF Cases 1993 - 2017
WHAT HAS CHANGED?
Based on reported LOF’s to Lloyds Salvage Arbitration Branch
ALTERNATIVE CONTRACTS
LAW IS EVOLVING
WHAT HAS CHANGED?
• “CMA CGM LIBRA”: Vessel
unseaworthy due to poor
passage planning
• Liability regimes are
evolving
• Legal Systems are more
sophisticated
NOWHERE TO HIDE!
WHAT HAS CHANGED?
marineinsight.comvesseltracking.net
“MSC NAPOLI”
WHAT HAS CHANGED?
CLEANUP COSTS
WHAT HAS CHANGED?
“MAERSK HONAM”
WHAT HAS CHANGED?
SANCTIONS
WHAT HAS CHANGED?
©finance.yahoo.com
SOCIAL MEDIA
WHAT HAS CHANGED?
THE IMPACT ON REPUTATION
WHAT HAS CHANGED?
60.0000
70.0000
80.0000
90.0000
100.0000
110.0000
0 5 10 15 20 25 30Sh
are
pri
ce:
as a
perc
en
tag
e o
f o
pen
ing
valu
e
on
th
e d
ay o
f an
no
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cem
en
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Days after attack is annoucned
Market Response to Cyber Attacks JP Morgan
Ebay
Sony
Barclays
TalkTalk
Maersk
Rosneft
WPP
FedEx
Merck
Yahoo! (owned byVerizon)Bell
Equifax
IMMEDIACY OF RESPONSE
WHAT HAS CHANGED?
HFW CRISIS MANAGEMENT CENTRES
OUR GLOBAL NETWORK
LONDON
PARIS
GENEVA
BRUSSELS
PIRAEUS
SÃO PAULO
DUBAI
RIYADH
KUWAIT
SHANGHAI
SINGAPORE
HONG KONG
MELBOURNE
HOUSTON
HFW CRISIS MANAGEMENT
CENTRES
HFW OFFICES
HFW ASSOCIATION OFFICES
JAKARTA
RIO DE JANEIRO
ABU DHABI
“SANCHI” C/W “CF CRYSTAL”
A CASE STUDY
3RD ASIA MARINE CASUALTY FORUM 11 APRIL 2019
MICHAEL RITTERT: +44 20 7264 8449E: [email protected]
LOC INVOLVEMENT
HFW INVOLVEMENT
CASUALTY UNFOLDING
M/T SANCHI SALVAGE
Urgent Transmission from Lloyd's List Intelligence Casualty Reporting Service Message Generated 07:02:25 07-Jan-18 UK Time
SANCHI (Panama) CF CRYSTAL (Hong Kong)London, Jan 7 -- A press report, dated today, states: Crude oil tanker Sanchi (85462 gt, built 2008), with 32 crew members
on board and carrying 136,000 tonnes of fuel to South Korea, was involved in a collision with bulk carrier CF Crystal (41073
gt, built 2011), with 21 crew members on board and carrying 64,000 tonnes of grain from the United States, en route to the
Guangdong Province in China, around 160 nautical miles east of the mouth of the Yangtze River, at 2000 hrs, local time, Jan
6. The incident caused a massive fire on board Sanchi forcing the tanker to tilt to the right. Thirty two sailors from vessel
Sanchi remain missing, which includes 30 Iranians and two Bangladeshis. The emergency operation were continuing this
morning…..
Location of the Casualty
• Chinese, Japanese and Korean interests
• Collision and wreck location – international waters, Chinese or Japanese EEZ?
• Pollution
• Managing a casualty in China
ROLE OF POLITICS / GOVERNMENT
M/T SANCHI SALVAGE
19
ROLE OF POLITICS / GOVERNMENT
M/T SANCHI SALVAGE
• Choice of contractor
• Decision making
• Access and information sharing
– Control of the Casualty Site
– ITOPF
• Flag & port state investigations
– Stakeholders
• Location of the collision and wreck
– Mobilisation time
– Communications ashore
• 24/7 or daylight firefighting
– Expertise
– Authority Direction
• Availability of resources
– Fi-fi Foam and/or Pyrocool
• Difficulty of access
– Search & Rescue
– Repatriation
GEOGRAPHICAL / PHYSICAL ISSUES
M/T SANCHI SALVAGE
21
Shana News Agency
POTENTIAL COMPLICATIONS DUE TO IRANIAN INVOLVEMENT
Strict legal position / Sanctions
• JCPOA Articles 36 and 37
• President Trump announcement 8 May 2018
• Executive Order 13846 of 6 August 2018
• Re-imposition of US secondary sanctions
– 180 day wind down ended on 4 November
– Sanctions reintroduced on, amongst others, petroleum, petroleum products, petrochemicals
– Prohibition … assisting or providing goods or services / significant support to … person determined to be part of the energy, shipping and shipbuilding sectors / underwriting services
THE SANCTIONS BACKDROP
M/T SANCHI SALVAGE
22
THE SANCTIONS BACKDROP
M/T SANCHI SALVAGE
Potential Complications due to Iranian involvement
• MAMANCOCHET MINING LIMITED v. AEGIS MANAGING AGENCY LIMITED AND OTHERS [2018] EWHC 2643 (Comm)
• Banking / commercial position
• Potential impact on casualty response
– Payment
– Security
• Impetus for Settlement – 05/11/18
LOF
• 6 January 2018 with SCOPIC invoked 7 January 2018
Wreckhire
• 24 January 2018
• Addenda No. 1 to 3
– Bunker Removal Addendum – April 2018
– Eyeball ROV – May 2018
• Variation Orders 1 to 8
• Ad hoc agreements
Issues regarding termination and transition
• Clause 9(iii)
• Clause 8(c)
TRANSITION TO WRECK REMOVAL – ENGLISH LAW CONTRACTS
M/T SANCHI SALVAGE
24
Chinese Ministry of Transport via AP
• Technical difficulties and bespoke solutions
– Edge of technical capability
– Contractors, Experts and Owners collaboration
– Bespoke equipment manufacture – investment
• Proving a negative
– Where did the bunkers and cargo go?
– Contrast to other cases – a new standard?
– Extensive investigations and extensions to services
NO “OFF THE SHELF SOLUTION” AND PROVING A NEGATIVE
M/T SANCHI SALVAGE
25
HFW CRISIS MANAGEMENT CENTRES
OUR GLOBAL NETWORK
LONDON
PARIS
GENEVA
BRUSSELS
PIRAEUS
SÃO PAULO
DUBAI
RIYADH
KUWAIT
SHANGHAI
SINGAPORE
HONG KONG
MELBOURNE
HOUSTON
HFW CRISIS MANAGEMENT
CENTRES
HFW OFFICES
HFW ASSOCIATION OFFICES
JAKARTA
RIO DE JANEIRO
ABU DHABI
©2019 Holman Fenwick Willan LLP. All rights reserved
Whilst every care has been taken to ensure the accuracy of this information
at the time of publication, the information is intended as guidance only.
It should not be considered as legal advice.
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