Shipping News - December 2017

IN BRIEF - LATEST NEWS AND CASES FROM THE WORLD OF SHIPPING Our transport and logistics team covers recent local shipping news and summarises some interesting maritime cases from Australia and around the world which have been handed down in recent months.

The partners and solicitors in our team take this opportunity to wish all our clients a happy Christmas and enjoyable holiday season.

NEWS The Australian Federal Government introduced the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 into parliament on 13 September 2017. It seeks to simplify and make more flexible the arrangements for the carriage of cargo around the Australian coast. The Bill has been referred to the Senate Rural and Regional Affairs and Transport Legislation Committee for report by 4 December 2017.

The reforms were contained in a discussion paper released earlier in the year. They include:

removing the five-voyage minimum requirement for issuing Temporary Licences (TL) for single voyages streamlining the licensing process where no General Licence vessels are available streamlining the TL variation process amending the voyage notification requirements and the tolerance limits on cargo volume and loading date variations extending the geographical reach of the act by amending the definition of "Coastal Trading" to include voyages to and from other defined places in Australian waters, such as offshore installations AUSTRALIAN DECISIONS Fair Work Ombudsman v Maritime Union of Australia [2017] FCA 1363

O n 24 February 2017, Jagot J in the Federal Court determined that the Maritime Union of Australia (MUA) had, as had been found by the Fair Work Ombudsman, organised and been involved in conduct of employees at the Sydney and Brisbane terminals of Hutchison Ports, which was unlawful industrial action, thereby contravening section 417(1) of the Fair Work Act 2009, making itself liable to the imposition of a pecuniary penalty.

In reaching her decision her Honour, contrary to submissions made on behalf of the Union, took evidence contained in MUA correspondence and press releases at "face value"; such evidence included statements that the Union would "unleash every tool available, legal, political and industrial", would be using every "lever at our disposal to ensure that this anti-union attack is repelled", and "it's imperative we throw everything including the kitchen sink at Hutchison...".

Delaware North Marine Experience Pty Ltd v The Ship "Eye-Spy" [2017] FCA 708

The plaintiff chartered the vessel "Eye-Spy" to replace its own vessel which was a catamaran and was unavailable to operate in the passenger ferry service, the charter was necessary to cover a two-week period. The vessel was bareboat chartered but soon after its delivery to the plaintiff it suffered a failure of her starboard stern tube assembly due to inadequate cooling water supply, the cause of which was the principal issue in the proceedings. The defendant sought to argue that there had been human intervention on the part of the plaintiff. Justice McKerracher accepted the evidence of the plaintiff's witnesses on this issue and found that there was most probably a latent defect in the vessel and he was not satisfied that that part of the vessel had been properly maintained by the defendant. As a result the plaintiff recovered most of the damages which it claimed and the cross-claim against it failed.

For admiralty lawyers the more interesting aspect of the claim, however, relates to the claim made by the defendant for damages for unjustified arrest. That aspect of the claim was not pursued but they did, however, seek damages for the plaintiff's demand for excessive security. The plaintiff had originally demanded $316,000 for its claim plus $50,000 costs and $11,000 for interest as security for the release of the vessel. His Honour found that the plaintiff's claim was at least $100,000 too much and was therefore excessive. The entitlement for compensation of the defendant in that regard was the interest charged for the provision of the security monies which the defendant had to fund. McKerracher J found that the appropriate calculation was the commercial rate of interest that the company was obliged to pay the funder less any amount which it received on the funds deposited.

SUK v Hanjin Shipping Co Ltd [2017] FCA 404 Jagot J made orders in November 2016 recognising the rehabilitation proceedings in Korea concerning Hanjin, pursuant to the Model Law enacted in the Cross-Border Insolvency Act 2008 (Cth) and recognising Mr Suk, the plaintiff, as a "foreign representative" within the meaning of the Model Law, as well as granting further consequential relief. In these subsequent proceedings her Honour noted that Article 18 of the Model Law requires a foreign representative to "inform the court promptly of:

any substantial change in the status of the recognised foreign proceeding or the status of the foreign representative's appointment; any other foreign proceeding regarding the same debtor that becomes known to the foreign representative." As her Honour explained, the obligation is important because it enables the court, when it is made aware of any substantial change in the status of the foreign proceeding, to revisit its orders or make new orders. The plaintiff failed to comply with Article 18.

The changes were identified by her Honour as being that on 2 February 2017 the Seoul Central District Court terminated the rehabilitation proceedings and declared Hanjin bankrupt. When her Honour became aware of the circumstances, she vacated the orders she had previously made.

Ozmen Entertainment Pty Ltd v Neptune Hospitality Pty Ltd [2017] FCA 1124

The plaintiff was the owner of the vessel "Seadeck" which had entered into a charter and licence agreement with the second plaintiff, Kanki Sea Tourism Hospitality & Entertainment Limited (Kanki) and the defendant. The relationship between Kanki and the defendant was governed by a joint venture agreement (JVA) entered into at the same time. Kanki terminated the JVA on 25 July 2017 and the plaintiff asserted that it was entitled to terminate the charter agreement by reason of the same breaches relied upon by Kanki in terminating the charter.

In the present application, the plaintiffs sought interlocutory relief for the appointment of a receiver and manager to take control of the vessel and any business operated...