FONASBA ANNUAL

MEETING
DUBAI
October 2017
C & D Committee

Michele White
General Counsel
INTERTANKO
International Association of
Independent Tanker Owners
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INTERTANKO 2017

2016

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 2017 Membership by Registration
Vessels
Member Companies
Greece 769
Greece 62 Japan 377
Italy 15 Cyprus 275
Germany 12 Hong Kong, China 223
Singapore 10 Switzerland
Single members 209
Japan 10 Norway 188
Azerbaijan
Norway 9 Singapore 181
Bahamas
Cyprus 8 Germany 137
Belgium
Turkey 7 Luxembourg 132
Bermuda
Hong Kong, China 7 Bahamas 121
UAE Cayman Island
6 Monaco 118
USA China
5 Italy 116
India China - Taipei
5 Russia 110
Switzerland Croatia
4 Malaysia 109
Sweden Finland
4 China 67
Netherlands France
4 USA 56
Denmark Isle of Man
4 Denmark 53
United Kingdom 3 Malaysia UAE 48
Spain 3 Mexico India 47
Canada 3 Qatar South Korea 44
South Korea 2 Russia Turkey 43
Monaco 2 South Africa Belgium 42
Luxembourg 2 Venezuela United Kingdom 41
Vietnam Bermuda 40
Other Leading the183
way; Making a difference
 2017 Member Fleet

LPG
8%
LNG
6%

Chemical
8% Crude
35%
Product
14%

Chem/Oil
29%

Vessel type by number of tankers

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 INTERTANKO Athens

Karagiorgi Servias 2
Syntagma
Athens 10 562
Tel+ 30 210 373 1772
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Gas Services

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 Main Focus Areas
Commercial
Safety Seafarers Environment Operations
Sustainability
Tanker design/ Fair treatment Emissions to water Vetting & Payment performance
construction - Criminalization - Ballast water Risk Assessment
- Enforcement of CSR - Shore access/visas - Reception facilities Charter party terms &
- Classification standards - Medical treatment & waste minimization Port state control Documentation
- Hull fouling man’t
Machinery/ equipment Crew competence Ports Worldscale
- Lifesaving appliances
- Classification standards
VETTING
- Training requ’mnts Emissions to air
- SOX, NOX, VOC
- Ports & Terminals
- Offshore Ops
(ECDIS, BWM) Insurance
Fuel COMPETENCY MANAGEMENT
- Tanker Officer
Training
MARPOL Annex VI
Maritime Security
- Compensation
- Greenhouse gas
- Liability limits
- Quality - Piracy
- Sampling BALLAST WATER MANAGEMENT
Standards (TOTS)
- Sanctions
- Officer matrix
emissions
- Reinsurance
- Energy efficiency
- Switching operations - Monitoring,
Anti-corruption
- LNG, Biofuels
- Alternate fuels
GREENHOUSE GAS EMISSIONS
Safe navigation
Seafarer welfare
- ECDIS
Reporting &
- Accomm’n. space Verification (MRV)
Cargo FUEL OIL QUALITY & AVAILABILITY
- Cadet berths
- Pilotage
- eNavigation
- Fatigue/rest hours Ship Recycling
- Properties
- Safe tank entry CYBER RISK MANAGEMENT
Chemical tanker ops
EPA VGP
- Gas detection - Recordkeeping
- Inert gas
- Biofuels
E-NAVIGATIONGas tanker ops
- Monitoring
Refugees

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Members working for Members

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 INTERTANKO Documentary Committee

Recent Clauses and Current Work

Clauses
• Storage (Anti-fouling) Clause (Environmental)
• River Ports Clause (Parcel Tankers) (Chemical Tankers)
• Demurrage Payment Clause (Worldscale and Markets)
• Interest on Late Payments (Worldscale and Markets)
Publications
• INTERTANKO Commentary on BPVOY5 (published 2016)
• Guide to Terminal Conditions of Use (ISTEC)
• Guide to LNG Chartering (Gas)
• Bunker Supply Project 2020 (Bunker)

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Tangible Output & Support

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 Guide to Terminal Conditions of Use

INTERTANKO Guide to Terminal Conditions of Use

• Contractual Issues
• Contract formation and terms
• Limitation of liability
• LLMC 76
• Contractual exclusion of limit of liability
• Insurance Cover
• CAPE BARI case
• Practical considerations
• Charterparty issues

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 Guide to Terminal Conditions of Use
Contractual Issues
Onerous provisions that:
 irrespective of fault, not only exonerate the Terminal from
any liability for any damage caused to the vessel; but also
 require Owners to compensate the Terminal for any damage
caused or injury suffered due to the negligence of the
Terminal
 In addition, COUs usually endeavour to deprive Owners of
their statutory right to limit liability
Master’s authority
 As Owner’s agent – express, implied or apparent.
 Signature or by conduct

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 Limitation of Liability
• Statutory Limitation Regime: Convention on Limitation of
Liability for Maritime Claims 1976 (the “1976 Convention”):
• Currently 54 States are party to the 1976 Convention
• Relevant provisions:
• Art. 1: confers on “shipowners” and “salvors” statutory
entitlement to limit their liability in respect of claims falling
within categories listed in Art. 2
• Art. 2: confirms that claims listed “shall be subject to limitation
of liability…..whatever the basis of liability may be”:
• claims in respect of loss of life or personal injury; or
• claims in respect of loss of or damage to property
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 Limitation of Liability
• Chapter II: sets out the limits of liability.
• Lower limits for personal injury claims compared to property claims
• Set limit for vessels under 2,000 GT; from 2,001 GT upwards, limit
calculated per tonne
• 3 different GT ranges with corresponding per tonne limit – lowest limit for
largest vessels
• Increased under 1996 Protocol to LLMC and again by IMO in 2015
Art 4: Conduct barring limitation
A person liable shall not be entitled to limit his liability if it is proved that
the loss resulted from his personal act or omission, committed with the
intent to cause such loss, or recklessly and with knowledge that such loss
would probably result.

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 Limitation of Liability

Development of limitation amounts over

time:

Based on vessel of 50,000 GT

Change in limitation amount for
property damage under
Conventions Protocol and
amendment
Values shown in USD
Lower values for personal injury Credit: http://www.gard.no/web/updates/content/20741048/increased-limits-
of-liability-enters-into-force-in-2015

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 CAPE BARI - Facts
25 May 2012 Vessel called at BORCO Terminal

Conditions of Use printed on a single page document and in BORCO’s standard

form

COU - Presented to Master for signing late at night at the Master/Pilot

interchange – along with other documents including Pilotage/ Towage
Agreement

Master required to sign in order to enter the Terminal. Master did not have
authority to sign a document surrendering Owners’ statutory entitlement to limit
their liability under the 1976 Convention

Vessel came in too fast, tried to turn

Failed and hit the jetty
BORCO Claim US$26m+
Owners limited liability to US$16.7m

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 Clause 4 BORCO COU
“If in connection with, or by reason of, the use or intended use by
any vessel of the terminal facilities or any part thereof, any
damage is caused to the terminal facilities or any part thereof
from whatsoever cause such damage may arise, and
irrespective of whether or not such damage has been caused or
contributed to by the negligence of BORCO or its servants, and
irrespective of whether there has been any neglect or default
on the part of the vessel or the Owner, in any such event the
vessel and the Owner shall hold BORCO harmless from and
indemnified against all and any loss, damages, costs and
expenses incurred by BORCO in connection therewith. Further,
the vessel and her Owner shall hold BORCO harmless and
indemnified against all and any claims, damages, cost and
expenses arising out of any loss, damage or delay caused to any
third party arising directly or indirectly from the use of the terminal
facilities or any part thereof by the vessel.”

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 CAPE BARI - Issues
Bahamas Oil Refining Company International Limited (“BORCO”) vs The
Owners of the Cape Bari (Privy Council)
Appeal by BORCO to Privy Council against finding of Bahamas Appeal
Court
1. Can an Owner contract out of 1976 Convention rights?
2. Did the Master (on behalf of the Owner) actually contract out?

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 CAPE BARI - Finding

1. Can an Owner contract out of 1976 Convention

rights? Yes
2. Did the Master (on behalf of the Owner) actually
contract out? No

• Has to be clear and unequivocal to contract out of rights

arising by operation of law
• The more valuable the right – the more improbable it would
be that it was excluded except by clear wording

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 Why is it important? P & I Cover

P & I Cover for third party risks associated with a call at a port or terminal

BUT Club cover is limited:

….this liability may be determined and fixed by law including any laws
pertaining to limitation of liability. The Association shall in no
circumstances be liable for any sum in excess of such legal liability. (UK P
& I Club)

Which would not have arisen but for the terms of the contract or an
indemnity entered into by or on behalf of the member, unless the
contract or indemnity is approved by the Association. (Skuld)

Owner may find himself exposed where he has lost the right to limit or has
otherwise waived it contractually (subject to P & I Club discretion).

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 Practical Implications

Terminals, Pilots, bunker suppliers will now include express and

unambiguous wording in contracts excluding the statutory right to
limit.

Master is Owners’ representative and therefore has actual and/or

apparent authority
• review whatever he is asked to sign
• ‘for receipt only without authority to bind’
• clear SOPs for Master’s guidance
• Master’s Statement
• Chartering issues? Indemnity?

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 Thank you
For more information, please visit:
www.intertanko.com
Documentary
[email protected]

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