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Case studies

The purchaser of parcels of grain incurred significant carrying charges pursuant to the sale contract when the ship he had chartered to carry the grain from the US to the Mediterranean failed to lift the cargo within the sale contract shipment period. The purchaser was unable to pass the carrying charges on to the shipowner because the shipowner had no knowledge of the sale contract terms, so the incurrence of carrying charges was too remote a consequence of his breach of the charterparty. Our solution was to conduct a risk assessment and review of purchaser's sale contract documentation and chartering procedure, consequently minimising the impact of carrying charges and incorporating relevant sale contract terms into charterparties.

Investigations – major casualties and public enquiries

'TASMAN SPIRIT'
This well publicised case in Pakistan resulted from the grounding of the ship and the largest ever oil spill in Asia. It became infamous owing to the detention for eight months of the Master, six other members of the crew and the salvage officer. Although the case is ongoing, our early involvement was instrumental in the release of the detainees without payment of the very substantial funds that were being demanded. Eamon Moloney, the lead partner, was named Lloyd's List Shipping Lawyer of the Year 2005 for his work on this case.

Logistics/multi-modal transport/freight forwarding

Acting for a Birmingham-based cargo owner, the ship on which the goods were carried suffered an engine breakdown and was unable to complete her voyage from the USA to India and deliver the goods. The solution to the problem involved salvage, transhipment and re-issue of bills of lading, with the result that the client's cargo was delivered and losses minimised.

Marine insurance

Acting for a cruise ship operator, we reviewed their contract with the shipowner and advised on exposure. This led to our introducing a marine risks policy which, three years later, was called upon following an incident to the ship, with our client's insured benefit approaching US$1m.

Risk assessment

We assessed the business of a travel operator client who was chartering ships and recommended improvements to the contracts which the client was able to negotiate. On our advice, they also took out some marine risk insurance. One of their ships grounded whilst entering port. The amendment to the contract had resulted in the exclusion of that liability (potentially in excess of US$1m) and the insurance covered the legal costs of rejected liability.

Trade finance/letters of credit and bank guarantees

Our client wanted to invest US$300m in a construction project in a third world country. The construction contract guaranteed repayment of contractual pre-payments in the event that the project did not run its course. Our client required security in respect of any such repayment. Working with Standard Chartered Bank, we developed an innovative use of a letter of credit to underpin the refund guarantee.