Sued in the Suez
After nearly a week, the Ever Given has finally been dislodged from the Suez Canal and is back on its way after causing severe delays. Hundreds of vessels will now be free to pass through one of the busiest shipping routes on the planet.
As things return to normal, the lawyers will step in and begin to work out whether the delays we have seen are actionable. The answer might end up being surprising to a lot of people. Whereas things like protection & indemnity (P&I) and hull insurance are pretty standard features of policies, delay cover is a much rarer ‘optional extra’ that many owners do not avail themselves of.
Nevertheless insurers are expecting a significant number of claims and things will get complicated as different parties have different arrangements. For example, so-called ‘timecharterers’ will have remained on hire throughout the entirety of the delay; that is good news for the owners of those ships because they are still getting paid but not such good news for the charterers who have been paying for a ship that isn’t moving.
On the other hand there will be owners who lose out because they have agreed to a ‘voyage charter’ where they are simply paid on a per-journey basis. If that journey takes much longer than expected then the vessel loses out on earning potential. Whether those owners could argue that their ship was blocked or trapped within the context of their insurance cover is surely another question that will end up before the courts.
More broadly the blockage in the Suez might end up being viewed historically as the low point for a shipping industry that has already been battered by the pandemic over the past 12 months. With a shortage of shipping containers, port delays and changes afoot in the oil industry, this latest incident in the Suez Canal will only add to the view that prospects in the shipping business are not quite what they used to be.
This week’s episode of the podcast also looks at a shipping case but here it was two vessels that crashed into each other! There are certain international standards that are in place to avoid collisions but here the Supreme Court was asked to provide an interpretation of those rules to see which side was at fault.
Episode link: http://uklawweekly.com/2021-uksc-6/
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