The crew that disappeared

Agents are unwittingly smuggling illegal immigrants

ILLEGAL immigrants, posing as crew members, are becoming an increasingly common phenomenon in the maritime industry. This type of well- organised scam is difficult for an unsuspecting agent to discover, given its similarities to a genuine port call.

In the latest BIMCO members’ report of such an incident, the agent was notified by “owners” Sealink Shipping Piraeus that their vessel, the Suwa, would soon be arriving in Israel. The unsuspecting agent, who accepted the nomination, notified the relevant authorities and arranged hotel accommodation for the incoming crew of 12, all of whom were Indian nationals. Soon after the new crew arrived in Israel and checked into their hotel, the “master” informed the agent that the vessel’s arrival would be delayed because of engine failure. The following morning, the hotel advised that all 12 of the crew had left the hotel without notice, leaving the agent responsible for the unpaid amount of $2,000. All further efforts to contact the owner or the vessel proved unsuccessful.

Unfortunately, BIMCO members alone have reported 15 such incidents in the past three years. In most cases, the port agent receives a nomination by telex6 giving a vessel’s ETA, name and details, stating that the port agent’s services are only required for a crew change. An agent becomes victim of the plot as soon as he accepts the nomination and begins to arrange entry for the crew, visas and other related aspects. Shortly before the alleged new crew arrives at the airport, the vessel is reported delayed and the agent is asked to book the crew into a hotel. These “crew members”, who are in fact illegal immigrants, then disappear.

BIMCO continues to strongly urge agent members to verity the background of new and unknown principals through the BIMCO Services Division. Failure to exercise due diligence in any crew change may result in serious sanctions and fines against the agent by the local immigration authorities. Moreover, the agent is often forced to absorb all costs involved, including repatriation of the illegal immigrants, which may amount to $30,000 per person.

This subject will be addressed during the session Illegal Immigrants Posing as Crew Members in BIMCO’s newest residential course. Ship Agent’s Obligations and Remedies - a Practical Workshop, to be held in Copenhagen from November 3 to 5.

Case № 8

Court ruling on proper method of establishing average fuel consumption under warranty

Arab Maritime Petroleum Transport Co v Luxor Trading Panama and Geogas Enterprise Geneva (The “Al Bida”)

The words “about” and “average” are among the most common words in use in maritime contracts, but what do they mean? This case concerns the interpretation to be placed on those terms. Line 7 of the charterparty here concerned provided, inter alia, that the vessel was to be capable of maintaining under normal working conditions an average sea speed of about 15.5 knots in moderate weather on an average consumption of 53 metric tons IFO fully laden and 50 metric tons in ballast per 24 hours. Clause 50 provided as follows - “Details of vessel... regarding vessel’s specifications and gas specifications are as per attached Form С (Gas) which forms part of this charterparty. These specifications to be considered i as representations by the owners. Form С (Gas): specifications of the vessel and the gas installation which are representations by the owners... Speed- Trials speed 19.90 knots. Guaranteed sea speed on a year period: about 15.5 knots — Consumption IFO at sea - average consumption 53m/tons full laden and 50m/tons in ballast...”

An unusual feature of the dispute which arose between shipowners and charterers was that the vessel, which had powerful engines and achieved a speed of 19.90 knots on delivery trials, had no difficulty in achieving the warranted speed throughout the charterparty, and in fact was often employed at considerably higher speeds. But the charterers complained that she consumed more fuel at those speeds than she would have done if she had been capable of performing the warranted speed at the warranted consumption figure. The dispute came before Mr Justice Evans in the Queen’s Bench Division. Commercial Court, by way of an appeal from an arbitral award in which the arbitrators found in favour of the charterers, stating that the word “about” had to be tailored to the ship’s configuration, size draught and trim etc. and that in this case the starting point was the speed and consumption in ideal weather so that where voyages were performed at speeds in excess of the speeds of the stipulations of the charters the starting point was 15.5 knots at 53 tonnes laden (50 tonnes per day in ballast) and no other. The amount of the award ($36,199.40) was in fact the balance of the charterers’ claim for excess consumption, after deducting agreed counterclaims which amounted to $268,149.60. The charterers’ claim was put forward on various alternative bases; at its highest level, it was to the order of US$500,000. It succeeded as a damages claim for two distinct breaches of contract in a sum of $304,349.

In the appeal by the owners of the vessel, the owners contended that the word “about” imported a margin on either side of 15.5 knots so that the owners warranted that the vessel was capable, on a consumption of 53 (or 50) tonnes per day, of a speed which fell within the range established and the margin was either 5 per cent (ie s knot) or S knot so that the owners were not in breach unless for the stated consumption the “average” speed fell below 14.75 or 15 knots. The charterers, on the other hand, argued that the starting point should be 16 or 16.25 knots in all conditions of moderate weather and if the consumption was greater than the warranted consumption figure then the owners were in breach of the warranty.

Two issues were before the court. The first concerned the meaning or effect of the word “about”. The second issue concerned the proper method of establishing the “average” consumption for the purposes of the warranty itself in the light of the relevant entries in Form С (Gas). With reference to the word “about”, the court took the view that the construction of the shipowners was correct, and was justified in law by the principle or rule that a contracting party is not to be held liable in damages for failing to achieve more than the minimum obligation which he undertook by his contract. The court said that the meaning of the word was plain enough and that the word “about” clearly did import some margin below, and. if relevant, above, the stated figure of 15.5 knots, and when it is sought to hold the shipowner liable in damages for a breach of this undertaking, he is entitled to have his liability measured by reference to the lower end of the range. It was held that the effect of the word “about” was that some margin had to be recognised on either side of the stated figure and the size of that margin was a question of fact in any particular case.

With regard to “average”, the court said, inter alia, that averages must be calculated on whatever basis is fair and reasonable, as between parties, as a means of establishing what the capability of the vessel is, at the time when the warranty takes effect, for the purposes of the charterparty in question. The assessment of “averages” then becomes a question of evidence and of fact. It was held that the owners’ submissions on this second issue failed, and that the “average” consumption need not necessarily be struck on a yearly basis, under the preamble in the charterparty (line 7) alone or read in conjunction with Form C.

Case № 9