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42003Shanghai International Maritime Forum 2003On 17th November2003, the UK Clubheld the third seminar,now known as theShanghai InternationalMaritime Forum, with theChina Maritime SafetyAdministration inShanghai. More than 200people attended fromMembers, shippingcompanies, China MSAdelegates from many portsin China, maritime courtjudges, insurers, lawyers,correspondents, Classification Societies and2 003 1117UK P&I Club representatives of government environmental200 agencies.The Forum was opened by the Deputy Ministerof Communications, Hong Shanxiang and LiuLunxian, Deputy Director of the Shanghai Peoples’Congress and was chaired by senior members ofChina and Shanghai MSA including Lui Gongchen,Administrative Director-General of China MSA, XuGuoyi, Deputy Director General of China MSA, Yu Chengguo, Deputy Director General of ShanghaiMSA, Zhi Guanglu, Vice President of Shanghai MSAand Yang Xinzhai, Director, Dept of Ship Safety and Pollution Prevention.Speakers included James MacHardy, GeneralManager of SIGTTO, Dudley Tait of Lloyd’s Register,Dr KK Sharma of Norgas, Chao Guorong of Shanghai MSA, Professor Wu Wanqing of DalianMaritime Universityand Jon Hansen of DNV. SLKuang of China Marine Services delivered a paperon the HNS Convention prepared by Dr Wu Chao,the Club’s Legal Director and Environmental Adviser.The Forum was closed by Herry Lawford and Zhi Weblinkhttp://www.msa.gov.cn/Guanglu on behalf of Chen Aiping, Director-Generalof Shanghai MSA.

HKMLA/CMLA Seminar in Hong KongUK P&I Club200392627200The UK Club was a sponsor of the first MaritimeLaw Seminar organised by the Hong KongMaritime Law Association, the University of HongKong and the China Maritime Law Association inHong Kong on 26th and 27th September 2003.Over 200 people attended from Hong Kong,China, Taiwan and Singapore and heard openingspeeches from Geoffery Ma, Chief Judge of HongKong, Judge William Waung, Hong Kong AdmiraltyJudge, Judge Wang Yanjun of China’s SupremeCourt, Judge Rao Zhongxiang, Vice President ofWuhan Maritime Court and SS Tse. The Role of theAdmiralty Judge in Hong Kong was discussed by Weblinkhttp://www.hkmla.org/index.htmlhttp://www.cmla.org.cn/Judge William Waung, while Judge Rao Zhongxiangof the Wuhan Maritime Court spoke on theapplication of ’international maritime practice’. HenryLi, a Member of CMI’s Executive Committee,described the work of China’s eleven specialistmaritime courts. Other speakers included PhilipYang, Prof Si Yuzhuo, Vice Chairman of the CMLA,Prof Zhu Zengjie of Cosco, Chief Judge HuangYongshen of Qingdao Maritime Court, George Wangof CPI, Raymond Wong of Richards Hogg Lindleyand Chen Bo of CMAC.5

6Getting to Grips with Human ErrorWorkshops in Taiwan and Hong Kong .2 003 1031114UK Club57Health & SafetyExecutives On 31st October and 4thNovember 2003, the UK Clubheld ’Getting to Grips with the HumanError’ workshops in Taiwan and HongKong for 57 Members’ training, HSEand other staff. The workshop,introduced by Capt Karl Lumbers, theClub’s Loss Prevention Director andled by Capt Malcolm Lowle, the Club’s HSEconsultant, covered safety and managementsystems, safety culture, and the need to measureperformance accurately, system faults and human error and the identificaton, assessment andDVDmanagement of risk. The Club’s DVD ’No Room ForError’ was shown. In Hong Kong the event was heldunder the auspices of the Hong Kong ShipownersAssociation. The materials provided for the workshop are available on the UK Club s website athttp://www.ukpandi.com/31p/humanelement.html2 003 1118UK P&I ClubOn 18th November 2003, in a short ceremonyconducted by Professor Jiang Zhengxiong,Dean of the Faculty of Law and Professor YuSicheng, President of the University, Herry Lawfordwas enrolled as a visiting professor at ShanghaiMaritime University. For his inaugural lecture hespoke on Criminal Responsibility in Shipping,illustrating his lecture with historical and currentexamples from China, the US and the UK. Thelecture is available on the UK Club Encyclopaedia.http://www.ukpandi.com/3lp/humanelement.htmlLecture to Shanghai Maritime UniversityHerry Lawford is delivering his inaugural lecture Weblinkhttp://www.shmtu.edu.cn/

Workshop for Cosco at Kuangou2 003 9 2122UK Club Group photo in the Kuangou GuesthouseDVD On 21st and 22nd Septemberthe UK Club held aworkshop for Cosco at the Kuangou Guesthouse outside Beijing. Participants attended from most of the Coscoshipping companies and discussion included P&I and TT cover and claims issues, environmental liabilities,Defence and time charter risks and hull cover. A showing of the No Room for Error DVD was held and theparticipants made a visit to the Great Wall.TT ClubTT Club given BestRating upgrade AM BestTT ClubB++TT Club 200250,900,00010,700,000B+B++AM BestTT Club (Mr PaulNeagle)AM Best, the financial ratings agency, hasupgraded the TT Club’s rating to B++ (VeryGood) after its recent review of the insurer’sperformance. The assigned outlook is ’stable’. Themutual organisation, which specialises in theinsurance of transport and logistics risks, filed adramatic improvement in its 2002 financial yearresults, posting a US$50.9m turnaround to achieve aUS$10.7m surplus after tax.According to AM Best the improved rating, upfrom B+ (Very Good), "reflects the significantimprovement in the company’s prospective riskadjustedcapital position resulting from a revisedbusiness plan and reduction in net retained riskthrough changes to the reinsurance program. Therating continues to reflect the positive trend in TT’sconsolidated financial performance."Mr Paul Neagle, Chief Executive of TT Clubcommented: "This latest upward revision of ourfinancial rating is an important milestone andindicator of success in our three-year strategy toreturn the Club to its previous level of financialstrength. I am delighted this has been recognised bythis upgrade and look forward to furtherimprovements as our strategy delivers consistentresults for our Members in future years."7

UK Defence Club Feature-8 therefore, if they remain able to pay, must exerciseWithdrawal disputes. Withdrawal of a ship is a drastic step withIn a buoyant market, issues overthe length of and rate for fixturesare highlighted. As the market rises,owners will want their shipsredelivered at the earliest possiblemoment in order to refix at moreattractive rates. Conversely,charterers will be trying to squeezeas many voyages out of the fixture,either directly or by lucrative subcharters.Withdrawal of a ship on timecharter is the owner s traditionalremedy against non-payment by adefaulting charterer. However, in abuoyant market, the remedy may beput to a different commercial use.Owners who have fixed at belowthe current market rate will beanxious to ensure that they receivepayment under those fixtures. Theymay also however hope for atechnical slip from charterers in payment of hire,giving them a right to withdraw for non-paymentbefore the fixture has run its full course. Charterersextreme caution to avoid such slips.These conflicting aims can lead to costlymany pitfalls. It should only be used as an ultimatesolution and always only after seeking legal advice.This article will summarise the key issues but is inno way a substitute for full legal advice relevant toeach particular situation.1. Is there an automatic right to withdraw?Late payment of hire alone does not give theowner a right to withdraw. However, mostcharterparties will contain an express clause that, indefault of regular and punctual payment, will give theowner the right to withdraw the ship from the

W ithdrawal from Timecharters charterer s service. This is usually found within standard form clauses. For example, NYPE 46 provides:Payment of said hire to be made in New York incash in United States Currency, semi monthly in advance ..otherwise failing the punctual and regular payment of hire, or bank guarantee, or any breach of this Charter Party, the Owners shall be at liberty to withdraw the vessel from the service of the Charterers without prejudice to any claim they (the Owners) may otherwise have on the Charterers . In the absence of an express right to withdraw, generally, the owner s remedy for non-payment will be to sue for debt. Sometimes charterers mayindicate a clear intention not to perform the contractby express repudiation of their obligations, or byrepeated non-payment. The owner can accept thatrepudiation and bring the contract to an end. Thisalso exposes the charterer to a claim for damages.2. When can the owner withdraw?The right to withdraw arises when the chartereris in default of payment of all or part of the hire due.Default does not have to be deliberate. It is vitaltherefore for a charterer to pay close attention to theprovisions of the hire clause. The smallest slip on hispart may allow the owner to withdraw. It is immaterialthat the slip was due to an oversight or difficulty withthe banking system effecting a payment. Compliancewith the obligation to pay hire punctually is strict.The owner cannot however anticipate acharterer s default. In a recent case, an ownerpurported to terminate by sending an e-mailmessage to the charterer. Whilst the messagearrived at the charterer s office after the hire becamedue, at the time it was sent, the charterer was not yet in default. The court held that the notice given was premature. The withdrawal was therefore illegitimate. 3. What if the charterer pays after the due date? Payment of hire after the due date will not deprive the owner of his right to withdraw. If payment9

104848eight hoursis made late, the owner can accept thatpayment as if it were punctual, waiving theright to withdraw. Alternatively he can rejectthat payment and proceed to withdraw theship. The bank does not have authority toaccept the late payment on his behalf. Theowner must however act promptly inrejecting the payment.4. Are there any restrictions on the right towithdraw? The Anti-technicality clauseA withdrawal clause can operateharshly on a charterer, in particular wherethe failure to pay is due to an oversight, orto technical issues at the bank. In mostcharters, to avoid any abuse of thewithdrawal clause, the parties agree to ananti-technicality clause or grace period .For example:Where hire is due and not received theOwners, before exercising the option ofwithdrawing the vessel from theCharterparty, will give Charterers forty-eighthours notice, Saturdays, Sundays andHolidays excluded and will not withdraw thevessel if the hire is paid within these fortyThe clause gives the charterer an opportunity torectify any default in payment within that graceperiod. The length of the grace period variesdepending on the respective bargaining positions ofthe parties at the time of the fixture. It may rangefrom 48 hours to up to 10 days.5. Can the right to withdraw be lost?If the owner has repeatedly accepted late tenderof hire without complaint this may establish a courseof conduct. This may prevent the owner fromexercising the right of withdrawal on a subsequentlate payment by the charterer. In this situation, theowner should first give notice to the charterer that hewishes to enforce its strict contractual rights despitethe earlier course of dealing.Acceptance of part hire on or before the duedate does not amount to a waiver of the right towithdraw. The owner would be wise to indicateexpressly to the charterer that he does not waive hisright in these circumstances.The owner also must make the decision to

withdraw within a reasonable time, or risk losing his right. What is reasonable will differ from case to case. However, as withdrawal is a serious step, the48 owner should have sufficient time to properly10consider the position and seek legal advice. A delayof a few days after the failure to make payment5would not normally be unreasonable.6. What is the effect of withdrawal?A valid withdrawal terminates the charter fromthe moment of withdrawal. The owner is not entitledto any hire for the remainder of the charter periodand must return to the charterer any unearned hire paid in advance. In most cases where there has been a tacticalwithdrawal, it is usual for the parties to reachagreement that the ship remains on hire to the samecharterers but at the higher market rate as if,practically speaking, nothing has changed. Anydisagreements over the legitimacy of the withdrawalwill then be fought out in arbitration or in the courts. When hire is not paid, the owner may have6other remedies. He may sue for debt. He may have rights against bill of lading holders to lien cargo, or to liens freights and sub-freights. When consideringwithdrawal, he should also take into considerationobligations to third parties under bills of lading. If atthe time of the withdrawal, a laden voyage isuncompleted, the carriage under the bill of ladingmust be performed.An owner is only likely to wish to withdraw a ship on a rising market, or where he is genuinely fearful of the ability of the charterer to pay. It can be seen that this decision should not be taken lightly. It is fraught with danger for the unwary and can resultin substantial claims against the owner if he gets itwrong. Any Member considering embarking downthis route, for whatever reason, should, in the firstinstance, contact the Defence Club. This is a shortened version of advice issued by the UK Defence Club as a Soundings article. The full article can be found on the UK Defence Club website athttp://www.ukdefence.com/index2.html or obtainedUK Defence Clubfrom Felix Lai in Hong Kong (felix.lai@thomasmiller.com)UK Defence ClubSoundingshttp://www.ukdefence.com/index2.html (felix.lai@thomasmiller.com) 11

12DexDex moves outside Lloyd sDex, which has been a Lloyd s insurer since itwas founded, is moving out of the Lloyd’smarket. From 1st January 2004, Dex will besupported by Groupama Transport, an "A" ratedspecialist marine insurer with Swiss Re, itsoriginal capital provider, becoming the preferredreinsurer.In 2000, Lloyd’s approved Dex’s plans to writelarge lines and ship values up to $100 million, butLloyd’s Franchise Board has recently reappraisedAnn Waite, Hugo Wynn-Williams and Peter Wrightits approach and is restricting the lines that marineinsurers can write.D ex 200411 Roman Reut, Marketing Manager explains:DexA "Dex was established as an innovative bluewaterGroupama Transport hull insurer with a desire to break the traditional(Swiss Re)2000Dex1(Lloyd s FranchiseBoard)Dex30-50Dexmould. Writing large lead lines - usually 30-50% ofthe value of a ship and sometimes more - allowsus to invest in our product and, more importantly,provide a high level of claims handling and otherservice to shipowners. We understand the Lloyd’sapproach but complying with Lloyd’s requirementswould limit Dex to write smaller lines"Underwriting policies for 2003 have Lloyd’ssecurity and Dex service. Dex will continue toprovide full after sales support and claimshandling until renewal when shipowners will beable to renew with new risk carrier Groupama2003Dex Transport. Mr Reut comments that he is confidentGroupama Transportthat shipowners will see a seamless transfer asDex the service will continue to be provided in the same way by the same people.Dex(Mark Carter)Dex(Peter Wright)(Ann Waite)DexDex2000300DexAMCLGoldbeamDex Weblinkhttp://www.topdex.comFollowing the restructuring of Dex, MarkCarter, the CEO of Dex Serv has left ThomasMiller. Peter Wright, Dex s Underwriting Director,and Ann Waite, Claims Director will carry out hisresponsibilities. Ann Waite comments We aregrateful for the work that Mark has done for bothThomas Miller and Dex in particular and we wouldlike to thank him for his considerable efforts.Dex began trading in 2000 and now has 300clients. In China and Hong Kong, Dex is theclaims leader of Cosco Qingdao, AMCL andGoldbeam. In addition to above, Dex writessubstantial following lines on a wide range ofships, including bulk carriers, tankers,containerships.

(ITIC)ITIC Warns on Delivery of Cargo Problems 2003ITIC, the specialist insurer of ship agency, shipbroking,ship managment and other intermediary risks hasissued a Guide for the Release of Cargoes 2003.Designed specifically to assist ship agents in avoidingthe serious risks that arise from wrongful andmisdelivery of cargoes, it is also valuable lossprevention advice for shipowners and charterers. It isavailable on ITIC’s website at the address below and isalso published (in hard copy only) in Chinese.Tony Payne, Managing Director and Stuart Munro,Underwriting Director of ITIC Weblinkhttp://www.itic-members.com/pubs_one2.htmlPresentation to Wang Haiming2 003 924On 24th September a presentation was madeto Wang Haiming of PICC on hisappointment as Chief Underwriter of thecompany. Wang Haiming has been a leading figurein Chinese maritime insurance circles for manyyears and is an old friend of Millers. Manyshipowners in China and adjusters worldwide still Weblinkhttp://www.picc.com.cn/index_html.htmlrely on his encyclopaedic knowledge of Chineseand foreign hull policies and issues.13

In early September, Millers Oasis imaging andworkflow claims handling system was installed inthe Hong Kong and Singapore offices. The systemhas already been in place in London, Piraeus, New2 003 9Jersey, Miami and San Francisco offices. Oasishelps claims handlers achieve consistency andimproves file management. It also allows multijurisdictionalfiles to be viewed in any offices as well as giving much greater opportunities for claims dataOasis in MillerHong KongOfficeanalysis.14

CMS Shanghai BranchMr Shi Depei, Mr Luo Min, Mr Gu Mingxiang, Ms Kuang Shilin MS s Shanghai Branch office has opened at1234 Pudong Dadao, Shanghai 200135Phone: +86 21 5585 1234. Gu Mingxiang is GeneralManager and Capt Shi Depei, Luo Min and Kuang 1234701Shilin provide surveying and consultancy services as+86 21 5585 1234part of CMS s China-wide network. Edgar Wong — a profileC Weblinkhttp://www.cmsonline.net/Edgar Wong joined Millers in1994 after graduating witha degree in Economics fromChinese University of HongKong. Having been a ClaimsExecutive in Thomas Miller HongKong office for six yearshandling UK Club and TT Clubclaims, he has become ThomasMiller’s Shanghai Representativein late 2000, performing both aclaims advisory and marketing 19946UKClubTT Club200080liason role.Edgar was born in Shanghaiand migrated to Hong Kong withhis parents in early 80 s. Heenjoys reading and travelling.15

London Hong Kong Shanghai Beijing TaipeiThomas Miller & Co Ltd Thomas Miller (HK) Ltd Thomas Miller & Co Thomas Miller & Co Thomas Miller (Taiwan)Shanghai Rep. Office Beijing Rep. Office Co LtdInternational House Suite 1201-1204, 12F, Suite 310, Shanghai Suite 1237, Junefield 7th Floor, 107 Jen Ai26 Creechurch Lane Sino Plaza, 255-257 Bund No.12, 12 Zhong Plaza, Tower 1, Road, Section 4,London EC3A 5BA Gloucester Road, Shan Dong Yi Road, Xuanwumenwai Street TaipeiCauseway Bay, HK Shanghai 200002 Beijing 100052Tel: 44 20 7283 4646 Tel: 852 2832 9301 Tel: 86 21 6321 7001 Tel: 86 10 6310 1147 Tel: 886 2 2740 2686Fax: 44 20 7621 1782 Fax: 852 2574 5062 Fax: 86 21 6321 0206 Fax: 86 10 6310 1146 Fax: 886 2 2731 0456DEXSubsidiaries of Thomas Miller Holdings Ltd are the Managers ofthe UK P&I Club, TT Club, UK Defence Club, ITIC, and provideservices to Dex.www.thomasmiller.comwww.ukpandi.comwww.ttclub.comwww.ukdefence.comwww.itic-insure.comwww.topdex.comPDFUK Clubwww.ukpandi.comCopyright by Thomas Miller & Co Ltd; for any enquiries, please contact one of the above offices. The electronic version of theNews (in PDF format) is available from UK Club's web-site: www.ukpandi.com. The electronic version provides also relevantlinks to the activities and extra information.