Frazer Hunt Mills Oakley Sydney Australia 6 June 2017 Melbourne Sydney Brisbane Canberra Perth 1
NEWSFLASH! Thursday, 2 June 2017: German shipping line Rickmers filed for insolvency following its bank s failure to approve its restructuring plan Rickmers owns 33 container vessels, 4 dry bulkers and 2 car carriers But has a total combined owned and chartered fleet of 114 vessels Melbourne Sydney Brisbane Canberra Perth 2
68 Hanjin vessels stranded at sea or in port in 23 countries Melbourne Sydney Brisbane Canberra Perth 3
68 Hanjin vessels stranded at sea or in port in 23 countries 540,000 TEU of cargo loaded on Hanjin vessels Melbourne Sydney Brisbane Canberra Perth 4
Hanjin Shipping Co Ltd Melbourne Sydney Brisbane Canberra Perth 5
Terminal operators/stevedores Melbourne Sydney Brisbane Canberra Perth 6
Port authorities Melbourne Sydney Brisbane Canberra Perth 7
Other shipping lines Melbourne Sydney Brisbane Canberra Perth 8
Container parks Melbourne Sydney Brisbane Canberra Perth 9
Lawyers Melbourne Sydney Brisbane Canberra Perth 10
Freight Forwarders Melbourne Sydney Brisbane Canberra Perth 11
Cargo insurers Melbourne Sydney Brisbane Canberra Perth 12
Carriers liability insurers Melbourne Sydney Brisbane Canberra Perth 13
Each policy is different. 1982 Institute Cargo Clauses (A). No cover due to: Delay exclusion; and Insolvency or financial default exclusion. Melbourne Sydney Brisbane Canberra Perth 14
The Institute Cargo Clauses (A) 1/1/09 include Clause 1 Cover for All risks of loss or damage except as excluded Clause 4.5 Exclusion for delay Clause 4.6 Exclusion for insolvency and financial default Clause 8.3 Continuation of cover during delay beyond control of the Assured Clause 9 Termination of contract of carriage Clause 12 Cover for forwarding charges Clause 16 Cover for sue and labour expense MELBOURNE SYDNEY BRISBANE CANBERRA PERTH 15
2009 Institute Cargo Clauses (A): No cover if loss proximately caused by delay; and Cover for loss, damage and expense arising from insolvency or financial default provided the Assured is not aware or in the ordinary course of business should have been aware insolvency or financial default could prevent the normal prosecution of the voyage. MELBOURNE SYDNEY BRISBANE CANBERRA PERTH 16
Need a risk triggered under clause 1 (the all risks clause). Insolvency leading to a loss of goods or adventure covered under an all risks policy. Coverage for forwarding expenses under clause 12. Clause 9 prompt notice of termination required. MELBOURNE SYDNEY BRISBANE CANBERRA PERTH 17
Recovery from insolvent carriers is generally not possible. MELBOURNE SYDNEY BRISBANE CANBERRA PERTH 18
Assess situation and act quickly Clear communication with all parties in the supply chain Awareness of commercial relationships and egos MELBOURNE SYDNEY BRISBANE CANBERRA PERTH 19
Review standard terms and conditions Are the force majeure clauses sufficiently broad to cover insolvent contractor? Consequential loss exclusions do they refer to insolvent contractors? Avoid uninsurable exposures involving liquidated damages or time/volume guarantees MELBOURNE SYDNEY BRISBANE CANBERRA PERTH 20
Review policy coverage for gaps in cover: Forwarders - on forwarding expenses cover MELBOURNE SYDNEY BRISBANE CANBERRA PERTH 21
Melbourne Level 6 530 Collins Street Melbourne VIC 3000 T: +61 3 9670 9111 F: +61 3 9605 0933 Canberra Level 9 121 Marcus Clarke Street Canberra ACT 2601 T: +61 2 6196 5200 F: +61 2 6196 5298 Sydney Level 12 400 George Street Sydney NSW 2000 T: +61 2 8289 5800 F: +61 2 9247 1315 Perth Level 2 225 St Georges Terrace Perth WA 6000 T: +61 8 6167 9800 F: +61 8 6167 9898 Brisbane Level 14 145 Ann Street Brisbane QLD 4000 T: +61 7 3228 0400 F: +61 7 3012 8777 Disclaimer This PowerPoint presentation is intended to provide only a limited analysis of the subject matter covered. It does not purport to be comprehensive, or to provide legal advice. Any views or opinions expressed are the views or opinions of the presenter, and not those of Mills Oakley as a Firm. Readers should satisfy themselves as to the correctness, relevance and applicability of any of its content, and should not act on any of it in respect of any specific problem or generally without first obtaining their own independent professional legal advice. www.millsoakley.com.au 22