P&I Associates Durban office, after 24 years in the same building, is moving location on 27 March.   We are however fortunate to be able to retain our existing telephone and fax numbers and of course E-mail and mobile numbers will also remain the same.

Our move is scheduled to commence early on Friday 27 March 2009 and there may be short period where main telephones are not connected and also possibly a short break in our E-mail however the latter is unlikely as our mail is routed through “Mimecast” so we will be receiving mail directly from their server.

The physical address of our new office will be:-

P&I Associates (Pty) Ltd.

1^st Floor,

1 Kingsmead Boulevard,

Kingsmead Office Park,

Durban,

4001

South Africa.

All other details including our postal address will remain the same.

During the move operation there may be an interruption of telephones so if you are unable to contact us please utilise either our emergency mobile number +27 83 250 3398 or one of the following staff mobiles.

Alan Reid                  +27 83 250 3392

Michael Heads         +27 83 453 4899

Ronald Evans           +27 83 441 5685

Jason Hossack        +27 83 303 1549

Byron Elkington        +27 83 703 8113

David MacDonald    +27 83 253 0170

Best regards,
Alan Reid

South African Public Holidays 2009

All of our offices in South Africa will be closed on the below dates but we can always be contacted on our duty mobile: -   +27 83 250 3398

1 January                  New years Day

21 March                   Human Rights Day

10 April                      Good Friday

13 April                      Family Day

22 April                      General elections * (only for 2009)

27 April                      Freedom Day

1 May                         Workers Day

16 June                     Youth Day

9 August                    National Women’s Day

24 September           Heritage Day

16 December            Day of Reconciliation

25 December            Christmas Day

26 December            Day of Goodwill

Is a ship “under arrest” when the Kenya Ports Authority simply “restrain her from sailing”, without “legal authority”?

The accident occurred very late one evening, and in our capacity as P & I Club Correspondents, we was called to attend on board the vessel, by the Master, within one hour of the accident.  By this time, the Harbour Master had already been on board, accompanied by his stevedoring staff (who are part of the “parastatal” organization of the Kenya Ports Authority), and on his return to his office, he drafted a letter and had it presented to the Master of the vessel, holding the vessel fully responsible for the damage sustained by the stevedore’s equipment in use at the time.  It stipulated that;

“…………. we hold the vessel fully responsible for the damage caused to the forklift truck by the impact (of falling heavily from a height onto the tanktop of the cargo hold).  The vessel is, therefore, restrained from sailing until a Banker’s Guarantee is deposited with the Authority for the cost of repairs or replacement of the damaged forklift truck”

At the time of the accident, a heavy forklift truck was being lifted from the cargo hold, where it was working for the whole day during cargo discharge operation, using stevedore’s appointed crane driver.  At the end of the day, the stevedores were transferring the forklift truck from the ship’s hold to the shore, using ship’s crane.  At some point, either the crane failed, or the crane driver lost control of the lift, with the result that the stevedore’s equipment went into a free-fall and landed heavily onto the ship’s tanktop in the cargo hold, thereby sustaining extensive structural damage.

As a result of this “restraint from sailing”, the vessel was delayed for three days in port, causing her to miss the start of a new charter, with all the consequential penalties and expenses accrued.  The delay in putting the Bank Guarantee in place, due to poor communications between banks, also exacerbated the situation.

The owners of the vessel then decided to launch a counter claim against the Kenya Ports  Authority, because of wrongful arrest, on the grounds that the restraint of the vessel from sailing lacked legal authority.  In order to assist the shipowners and their P & I Club, we looked up copies of both the Kenya Ports Authority’s Act and the Kenya Merchant Shipping Act, and it was shown that the Harbour Master should have sought Court Order from the High Court/Admiralty Court for the legal arrest of vessel to be executed.

Part IX of the Kenya Ports Authority Act 1978,  which deals with Control of Ports - Section 40 (1) states that;

“Where any port charges are owing in respect of any ship, an authorized employee may arrest the ship and the tackle, apparel and furniture thereof and may detain it until the amount of such charges is paid……………”

Although the “authorized employee” is defined as “an employee authorized by the Managing Director to exercise the powers or perform the duties in respect of which the expression is used”, there is no mention of the legal authority conferred in him or her by the High Court/Admiralty Court, for such person to execute an arrest of the vessel.  It is also uncertain whether or not the claims for the repair or replacement of the damaged stevedoring equipment  could be considered as “Charges”. 

However, Part VII of the Kenya Merchant Shipping Act 1968, which deals with Legal Proceedings - whereby Section 294 (1), (2), (3) and (4) of the same Part VII deal with Damage Occasioned by Foreign Ships, stipulates that; 

“(1) Where –

(a) injury has in any part of the world been caused to property belonging to a citizen of Kenya, or to a person (not being a body corporate) or a body corporate resident in Kenya, or to the Kenya Ports Authority, by a ship not registered in Kenya; or

(b) a claim is made for damages by or on behalf of a citizen of Kenya or person resident in Kenya, or the Kenya Ports Authority, in respect of personal injury (including fatal injuries) against the owners of any such ship, and at any time thereafter, that ship is found in any port or place in Kenya, the Court may, upon it being shown to it by a person applying that the damage was probably caused by the misconduct or want of skill of the Master or mariners of the ship, issue an order directed to “a detaining officer”, or to any officer named by the Court, requiring him to detain the ship until such time as  the owner, Master or agent thereof has made satisfaction in respect of the damage or injury or has given security, approved by the Court, to abide the event of any proceedings that may be instituted in respect of the damage or injury, and to pay all costs and damages that may be awarded thereon.

(2) A detaining office or other office to whom the order is directed shall detain the ship accordingly.

(3) Where it appears that before an application can be made under this section, the ship in respect of which the application is to be made will have departed from Kenya, the ship may be detained for such time as will allow the application to be made, and the result thereof to be communicated to the officer detaining the ship; and that officer shall not be liable for any costs or damages in respect of the detention unless the detention is proved to have been made without reasonable grounds.

(4) In any proceeding in relation to any such damage or personal injury, the person giving security shall be made defendant and shall be stated to be the owner or the ship that has occasioned the damage or injury, and the production of the order of the court made in relation to the security shall be conclusive evidence of the liability of the defendant to the proceeding”

From the Merchant Shipping Act, it is quite clear that detention of the vessel requires a legal authority of the High Court/Admiralty Court, but to understand why the Harbour Authority took action to arbitrarily restrain the vessel from sailing, one must look at history of “maritime authority” in Kenya.  Until 2006, there was no such thing as a Kenya Maritime Authority, and the Kenya Ports Authority was acting as the agents on behalf of the Kenya Government, with all the staff working as Merchant Shipping Superintendents and the Government Safety  Inspectors being employees of the Kenya Potrts Authority.  Therefore, the Harbour Master continued to exercise his powers as “maritime authority by default” and vessels were detained or restrained from sailing arbitrarily by a simple act of withholding their Port Clearances and/or refusing to give them the services of Pilots and Harbour Tugs. 

In their capacity as Port State Control Inspectors, the Kenya Ports Authority used to have the power to detain any vessel on account of being substandard or contravening the IMO Conventions, but this responsibility has now been entrusted in the Kenya Maritime Authority, subject to the New Merchant Shipping Bill and the Kenya Maritime Authority Bill being passed through Kenya Parliament, within a foreseeable future. 

Because of the very highly bureaucratic nature of KPA organization, the procedures that are normally followed, in cases like these, when the Master of the vessel initially receives a restraining letter from the Harbour Master, is for the P & I Club Correspondent and Surveyors to immediately visit the  Mechanical Engineering Department in order to ascertain the quantum of claim.  This may take several days for the Engineers to obtain a guestimate. Finally, one has to visit, in person, the Principal Legal Officer who would have to consult the Senior Harbour Master, the Managing Director and/or the Accountants, to obtain information about the nominated Bank.  All this costs the vessel a lot of time waiting in port, considering that the some of the non-marine KPA personnel only work during the office hours, and they insist on that.  The Claims Manager in the Insurance department of the Kenya Ports Authority only comes into the picture when claims go through their underwriters.

We brought this matter to the attention of the Legal Officer working for the newly formed Kenya Maritime Authority, and she confirmed, verbally, that the New Kenya Merchant Shipping Bill has not yet been passed into Act, but she was of the opinion that the Kenya Ports Authority had the right to restrain the vessel in response to the damages sustained by their stevedore equipment, without a legal authority, and the shipowners have the right to sue for wrongful arrest in the Kenya High Court/Admiralty Court.  Unfortunately, Kenyan Courts are notoriously slow in hearing cases, and it will take a few years before any meaningful judgment can be given.

However, she recommended that we make an official complaint in writing to the Kenya Maritime Authority (KMA), and hope that in time they will respond to the same.  The KMA’s standards of service stipulate that they will respond to all written and electronic communications within five (5) working days, or they will inform the member of the public of the time needed to respond to a query, request or complaint.

We have been waiting for a very long time, for this and other queries, and so far we have received no response.    We have discussed this problem with a number of local Lawyers who handle marine claims, they too are lost for words.                                                                                     

M.M. Ittiso.

Mombasa

We will tow you away

By Michael Heads

P&I Associates (Pty) Ltd

Durban

South Africa

In June 2005, a vessel passing north on the South African east coast experienced main engine problems. The vessel stopped and anchored off the coast whilst the crew attempted to carry out repairs.

Whilst the vessel was at anchor, the South African Maritime Safety Authority (SAMSA) maintained a close watch on the situation. The crew were unable to effect repairs and the Owners entered into LOF with a team of international salvors.

The weather on the South African coast is notoriously unpredictable and the weather conditions changed and the vessel began to drag her anchor. The salvors in all likelihood already dispatched a tug in anticipation of the LOF agreement.

The weather conditions grew increasingly worse and the vessel was in danger of running aground. SAMSA ordered that a harbour tug from a nearby port tow the vessel into deeper water.

The master of the casualty declined to take the line for he had been advised that LOF had been signed and was concerned that by taking it he would, perhaps be contravening the LOF.

The vessel subsequently grounded prior to the salvage tug arriving.

As a result of this incident, SAMSA came under political pressure and were accused of failing to take action sufficiently quickly, the local view being that SAMSA has the power to order any vessel anchored “illegally” along our coast to either leave immediately or take a tow.

Section 5 of the Marine Traffic Act, Act 2 of 1981 provides the following:

5. Immobilizing, laying-up, stopping or anchoring outside harbours or fishing harbours

(1)     Except with the permission of the Minister and in accordance with any condition prescribed by regulation or imposed by the Minister in a particular case, no person shall within the territorial waters or internal waters immobilize or lay-up a ship outside a harbour or fishing harbour.

(2)     The Authority may require the master or owner of a ship immobilized or laid-up or to be immobilized or laid-up to find security to the satisfaction of the Authority in an amount determined by the it for the recovery of any costs incurred by the Authority in enforcing any condition applicable to the immobilizing or laying-up of the ship, or in the exercise of its powers under this Act.

(3)     No person shall stop or anchor a ship for repairs within the territorial waters or internal waters outside a harbour or fishing harbour except with the main engine thereof kept in readiness for immediate use and in accordance with any condition prescribed by regulation or imposed by the Minister in a particular case.

(4)     Any person who contravenes the provisions of subsection (1) or (3) shall be guilty of an offence.

Section 11 of the Act provides the penalties for contravention of the Act as follows:

11. Penalties

(1)  Any person shall be liable on conviction of -

(a)     any offence in terms of section 3 (2), to a fine or to imprisonment for a period not exceeding twelve months;

(b)     any offence in terms of section 4 (2) or 5 (4), to a fine or to imprisonment for a period not exceeding two years;

 (c)    any offence in terms of section 6 (2) or 7 (3), to a fine or to imprisonment for a period not exceeding three months;

any offence in terms of section 8B (1), to a fine not exceeding R200 000, or to imprisonment for a period not exceeding five years or to both such fine and such imprisonment.

(2)  If any person -

(a)     admits to the Authority that he has contravened or failed to comply with any provision of this Act, which contravention or failure constitutes an offence;

(b)     agrees to abide by the decision of the Authority; and

(c)     deposits with the Authority such sum as may be required of him, but not exceeding the maximum fine which may be imposed upon a conviction for the contravention or failure in question,

the Authority may, after such enquiry as it deems necessary, determine the matter summarily and may, without legal proceedings, order by way of penalty the whole or any part of the said deposit to be forfeited.

(3)  There shall be a right of appeal to the Minister from a determination or order by the Authority under subsection (2) whereby a penalty exceeding R2 000 is imposed, provided such right is exercised within a period of three months from the date of such determination or order.

(4)  The imposition of a fine under subsection (2) shall be deemed not to be a conviction for an offence, but no prosecution in respect of the offence in question may thereafter be instituted.

[S

Accordingly, should any vessel decide to anchor on the South African coastline without permission, which permission needed to be obtained from the Minister of Transport who is responsible for SAMSA, then that Minister (for which read SAMSA) has the powers to order the vessel to leave the area, or, demand that the vessel accepts a tow so that the vessel is taken away from the coast.

One of the main reasons for SAMSA exercising these powers, is to protect our coastline from the risk of pollution should a vessel run aground.  The powers of SAMSA to protect the coastline are included in section 4 of the Marine Pollution (Control and Civil Liability)Act 6 of 1981 and section 18 of the Wreck  and Salvage Act 94 of 1996.

Further, SAMSA, are quite quick to point out that in terms of our Merchant Shipping (Maritime Security) Regulations 2004, which incorporate Regulation XI-2/9 of Solas 74 Convention no vessel can anchor without first obtaining security clearance.

The position therefore, is that no vessel can anchor along the South African coast to effect repairs without first obtaining permission from SAMSA, who may order that various preventative measures are to be taken first, for example, by having a tug of sufficient bollard pull standing by to render assistance should assistance be required in an emergency.

SAMSA have confirmed that they have exercised these powers and they have already used a tug to escort a vessel to a port. They indicated that they were quite prepared to arrest the vessel in order to obtain security for costs however, the owners settled the claim before an arrest was made.

The question which begs to be answered, is what form of towage contract would be forced on a vessel should a vessel be ordered by SAMSA to take a tow. This has not been tested and neither has the question whether the tug or vessel rendering the tow has the right to proceed with a salvage claim under South African common law.

The National Port Authority who operate the ports of South Africa, have rendered assistance to vessel’s and have, after having rendered assistance successfully claimed for salvage under our common law. In this regard, the South African common law closely mirrors English Law on this point.

We shall have to watch closely has future events unfold however, Owners should be made aware, that they cannot simply, as they may have done in the past simply stop and anchor on the South African coastline to effect repairs.

Owners need to immediately contact the local authorities and obtain permission for the anchorage and will need to disclose the problem facing the vessel. SAMSA, will then study the application and either agree to the anchorage perhaps subject to various requirements. If the application is denied, then one can safely assume that SAMSA will issue an order that the vessel leave the anchorage and if the vessel fails to comply with the order, then SAMSA have the powers to order that the vessel to take a tow. As stated, Owners can expect, in my view to face a common law salvage claim once the vessel is brought safely into port for I believe, that even if the vessel were say brought to the Durban anchorage, SAMSA may feel that the vessel is still a risk to other vessels and the environment and therefore the tow should only end in port.

Michael Heads

Durban

July 2007

Counting the Cost of Bagged Rice in

Southern African Ports

Loss Prevention

By Michael Heads

P&I Associates (Pty) Ltd

Durban

South Africa

I have noted in the last year that there has been a steady increase in the number of bagged rice shortage claims in Durban and from Nacala, Beira and Maputo in Mozambique. I was always used to receiving the odd claim from time to time for a few bags missing from an entire shipment but I have now recorded a marked increase in claims especially from certain quarters of the market. It appears to me that claims were arising far too frequently and felt it was important that members were made aware of the situation.

In Mozambique, I used to receive the odd claim but I never used to receive demands for security. I have now noted the strong presence of French cargo underwriters in the Mozambique market who are insuring rice cargoes into Mozambique and they have become quite forceful with their demands for security in respect of shortage and damaged cargo claims.

About a year ago, I was first introduced to the phrase “extrapolation”. I had never heard the phrase being used in a shipping context. I had studied mathematics to A levels. I immediately reached for the dictionary in order to confirm my understanding of the term since the term is generally used in a mathematics environment. For the benefit of those who have not encountered the word, the word “extrapolation” means according to the dictionary “extend (a graph) by inferring unknown values from trends in the known data”. In layman’s terms, this means that a surveyor, can stand at the hatch coaming and looking down into a cargo hold, he can estimate that there will be a shortage. He is able to do so because there is “always” a shortage on every bagged rice shipment and the extrapolation, is the term for the number of bags, which the surveyor estimates will be short.

This is, in my view, is an incredible surveying technique, which has really left me in awe as to how a surveyor can achieve this amazing feat.

I have taken up this extrapolation survey technique with the French cargo underwriters, who are a strong supporter of the method, and I have even proven to them on many occasions that the extrapolation methodology is not based on any sound surveying principles. Unfortunately, this method of surveying does not appear to be on the decline and therefore members need to be prepared that should they be carrying bagged rice to East Africa, they can expect to receive shortage claims based on the “extrapolation” methodology. In order to defeat the claim, I recommend that the members appoint their own surveyor to be in attendance throughout the discharge, and that the members arrange for a private tally to be carried out on their own behalf in order to have evidence to reflect that the full consignment was landed. Further, if members have a surveyor present at the start and during the discharge in order to gather evidence then this will protect the members in respect of damage/shortage claims.

The “extrapolation” methodology has yet to arrive in South Africa but I am sure, since I understand that it is very common in West Africa, and now in East Africa, that its migration south cannot be to far off.

In South Africa, I have noted the increase in shortage claims on those vessel’s where the members did not have a surveyor present during the discharge and especially when members did not have their own tally. It would appear to me, that as soon as the receiver is aware that the vessel is not carrying out their own tally, that the receiver will then lodge a claim for a shortage.

The port used to carry out a tally on bagged cargo but most vessels are now discharging rice cargoes at leasehold berths and therefore, the port no longer carries out such tallies. This means that the cargo is palletized on board the vessel and landed directly on to road transport and taken to a private warehouse for distribution. The claims that I have seen, seem to be, and not surprising, equivalent to a truckload or two. I therefore recommend that members have a surveyor in attendance at the start and during the discharge and carry out a tally in order to defend any claims for shortages.

I am hopeful that South African surveyors, are experienced enough to realize that  “extrapolation” is “guestimation”. It is a surveying technique not based on any sound marine surveying principles. It is a methodology based on fear of loss rather than actual loss and as we all know, shortages in bag cargo are generally a paper loss, which can be attributed to the cargo being incorrectly tallied at the load port or the discharge port. I have never seen a crew eat 400 bags (20mt) of rice between India and Durban.

It is interesting to note, that when all the holds of a vessel have been sealed, following loading, the “extrapolation” surveying technique appears not too work. 

The question, which begs to be answered, is whether the “extrapolated” surveyor, is a surveyor for his own account, or a surveyor who is essentially a puppet, in the hands of a dictator.

Michael Heads

Durban

June 2007