No. 3 - 2008, November

on the Prestige and MSC Napoli cases Page 10-13

TheHarren & Partner GroupPage 8-9 MEMBER PORTRAIT Piracy preventative measures Page 16-17 The Swedish Club Letter 3–2008 Content

Leading article The road ahead 3 Loss Prevention P&I www.excelload.com …a one-step source for cargo securing computation 4-5 Fatalities in enclosed spaces 6-7 Member portrait The Harren & Partner Group 8-9 Salvage Prestige and MSC Napoli: two very different approaches 10-13 Regulations IMO calls for increased damage stability of cargo and passenger vessels 12-13 ISM Spelling out the need to avoid a prescriptive ISM 14-15 Piracy Rocketing piracy calls for insurance review 16-17 Claims report New Flame – Progressing one of the most difficult wreck removals of recent times 18-21 Club Information News from Piraeus 21 Cargo Safe reefer operations onboard 22-23 MRM New MRM training providers 24 Out and About with MRM 24-25 FD&D Rule B attachment of EFTs – Are you playing offense, defense or both? 26-29 Claimants seeking to attach ”EFTs” head into overtime – Are you in the game? 30-33 Club Information News from Asia / New Members / Basic Facts 33 American Liberty ship becomes Greek 34 Out and About 35 Staff kick-off 36-37 Staff News 38 Public Holidays 38 Historical Corner – The Swedish Club Medical Center 1945-1955 39 Club Calendar 40

Head Office Sweden Greece 5th Floor, 87 Akti Miaouli Visiting adress Gullbergs Strandgata 6 GR-185 38 Piraeus 411 04 Göteborg Greece Tel +30 211 120 8400 Postal adress P.O. Box 171 Fax +30 210 452 5957 SE-401 22 Göteborg Sweden E-mail [email protected] The Swedish Club is a mutual marine insurance Tel +46 31 638 400 Emergency tel +30 6944 530 856 Fax +46 31 156 711 company, owned and controlled by its mem- Japan Suzuyo Hamamatsucho Building 5F E-mail [email protected] bers. The Club writes Hull & Machinery, War risks, 2-1-16 Kaigan, Minato-Ku, Tokyo 105-0022 Emergency tel +46 31 151 328 Japan Protection & Indemnity, Loss of Hire, Freight Tel +81 3 5442 5466 (24 hour tel) Demurrage & Defence insurance and any addi- Hong Kong Suite 6306, Central Plaza Fax +81 3 5442 5922 18 Harbour Road, Wanchai tional insurance required by shipowners. Hong Kong E-mail [email protected] Tel +852 2598 6238 Fax +852 2845 9203 E-mail [email protected] www.swedishclub.com Emergency tel +852 2598 6464 2 The Swedish Club Letter 3–2008 Leading Article

The road ahead

Lars Rhodin Managing Director

To take the helm at The Swedish Club is an honour coupled with the past, at least not of this magnitude. Claim values are increasing, great leadership responsibilities. Frans Malmros has been exemplary claim frequencies are on the rise – all related to the recent shipping during the transition period, allowing me to step gradually into the boom – amid financial turbulence. Never has the call for underwrit- decision-making process. I give him credit for his efforts in handing ing discipline been more valid than it is today. We should appreciate over seamlessly. what we know and also what we do not know. We shall do our best We have a fine Club with great traditions, strong values and loyal to manage the manageable. membership. Our brand name is second to none. This is our legacy, The Club is its membership and the people set to run the opera- and our strength is derived from what we have delivered in the past. tion. We are committed to our task of providing efficient insurance I have always felt proud of working for the Club; a respectable com- related services. We should be reliable in whatever we do. Insurance pany with dedicated members. Likewise, I have always believed in is a promise; to respond to a situation giving rise to a claim under the our ability to meet future needs and to develop services to members policy. Members entrust their fleets with us, and we shall respond accordingly. as we have undertaken to do. Our approach will be proactive in The Swedish Club stands for rapid casualty response, efficient nature, may it be underwriting, casualty response or claims manage- claims management, loss prevention and security. The mutual was ment. We have to make a difference. That is our quest! formed out of necessity in the days when the conventional market To develop the Club means that those of us working for the mem- was not prepared to handle the new risks lying ahead. We have a pur- bership need to improve. Improve our standards and strive for best pose; to meet shipowners’ insurance needs as they are transformed practices in all areas. We provide an added value. The members’ ap- at any given time. In most cases insurance is reactive in its nature. preciation of our services is our only yardstick. I promise to do my However, it is our mission to approach casualties and eventualities best in my new role and look forward to teaming up with all of you in a proactive manner. Loss prevention is the finest art in this field. in the effort to making what is already great even greater. We shall To run an insurance club is not just a matter of rating exposures. We remain the preferred choice of discerning shipowners. shall do our part in reducing claims and in assisting our stakehold- Yours sincerely, ers in managing the cost associated with them. We strongly believe in the positive effects of efficient implementation of Maritime Re- source Management. Our legacy apart, we are set to address the challenges that lie ahead. As of the time of writing, we operate in a largely volatile en- vironment with features that perhaps have not been experienced in P hoto The Swedish Club Letter is published three Editorial Advisory Board Peter Andersson, Susanne Blomstrand, : S

canpi times a year and distributed free of charge to ves- Birgitta Hed, Lars Malm, Tord Nilsson, Lars Rhodin,

x/AFP P x/AFP sels insured with us and to our members. Carola Weidenholm

hoto The Swedish Club Letter is an editorially inde- Production co-ordinator Susanne Blomstrand

/L pendent newsletter and opinions expressed by N eon PR-consultant TRS Public Relations Ltd., London external contributors are not necessarily those of eal The Swedish Club. Articles herein are not in- Layout Eliasson Information, Göteborg tended to provide legal advice and the Club does Print PR Offset, Mölndal not accept responsibility for errors or omissions © The Swedish Club. Articles or extracts may be quoted provided or their consequences. For further information that The Swedish Club is credited as the source. Cover photo: The tanker MSC Napoli regarding any issue raised herein, please contact beached near Branscombe in Devon, our head office in Göteborg. 0811PR5200B 23 January 2007.

3 The Swedish Club Letter 3–2008 Loss Prevention P&I

A one-step source for cargo securing computation

ExcelLoad Cargo Securing rangement can be made for the specifi c type of Solutions is the result of Stefan Järlhem cargo. This lashing protocol is then automati- more than ten years of co- Managing Director cally distributed via email to all interested and operation between Cargo Translogic Consulting & Service Co Ltd, relevant parties in the transport process. Bangkok Control AB, Sweden, and Translogic Consulting & Can be used as a search tool   Notwithstanding many years of discussions Service Co. Ltd., Thailand. The database containing all lashing protocols on the securing of cargo in load carriers, opinions Together they have more can also be used to search for specifi c protocols still vary, not only among the supply chain part- than 60 years of experience by those persons possessing the authority from ners, but also within the traffi c police, who are from the transportation our customers to conduct this kind of search. It one of the authorities with the power to inspect and logistics industry. could be very useful prior to a random inspection cargo securing arrangements inside load carriers Stefan Järlhem, founder of of a load carrier fi rst to check the load carrier in in transit. Translogic, has also served the database. If it is represented, and the issuing While the question of responsibility for se- as offi cer and captain in the date of the lashing protocol is within a reason- curing cargo is still being discussed within the Swedish merchant fl eet. able time range, there is no need to open up the Ministry of Commerce, there are (thank heav- specifi c load carrier to check its securing arrange- ens), parties within a common industrial fl ow ments, and the time can be used to check other of heavy Swedish goods who prioritize the per- load carriers instead. formance of the cargo securing arrangement. To- The lashing protocol is attached to relevant gether, these parties have created cargo securing cargo documentation to follow the cargo in tran- routines to maintain a high level of safety during sit and will, upon any inspection of the cargo the whole transport, from production to the fi nal securing arrangement, show that the cargo is se- destination of the cargo. cured in line with the relevant rules and demands from the authorities. Unique lashing protocol Currently the calculations are made accord- Rederi AB Transatlantic and Stjärnfrakt AB are ing to the 1998 :2 report from the Swedish Trans- two carriers for a joint customer within a fi xed port Research Board (TFK) “Securing of Cargo fl ow of cargo between Sweden and the UK. They – Loading and Securing Cargo on Load Carriers. have jointly implemented a web-based solution Advice and Instructions”. This report was drawn with the aim of calculating and recommend- up with representatives from the Swedish Rail ing the best way to secure the cargo in transit. Administration, the Swedish Maritime Admin- Thereafter the server for the specifi c solution au- istration, the Swedish Road Administration and tomatically produces a unique lashing protocol the Swedish Coast Guard. In addition to these in Swedish and English to follow the cargo in administrations, representatives from relevant transit. The lashing protocol clearly shows in text companies, including The Swedish Club, and and drawings how an effi cient cargo securing ar- organisations within the transport and logistics

4 The Swedish Club Letter 3–2008 Loss Prevention P&I

sector were also represented in the project group must have adequate training to avoid the mistake formed to write the report. mentioned above being repeated. The Traffi c Po- lice is, after all, the authority to check the secur- Training needed to avoid ing of cargo on load carriers on the road. mistakes by the Traffi c Police Despite a correctly developed method of cargo Tailored to each specifi c vessel securing and an attached lashing protocol for At present we are revising our Cargo Securing cargo in transit by road and on the North Sea val- Software from delivery on a CD ROM to be- id for the above-mentioned fl ow of transport, the come fully web-based in order for our customers Swedish Traffi c Police had views concerning the to use our services no matter whether they are cargo securing arrangement. One of these views located in the offi ce, on board a ship or during a was the consideration of the friction between the cargo securing inspection using a pocket PC. cargo and the loading surface. When calculating When it comes to securing load carriers on the required forces to withstand cargo shift, the board ro-ro vessels, ExcelLoad has developed Ex- traffi c police were of the opinion that the friction celLoad Shipping, tailored to each specifi c vessel, must be zero. A coeffi cient of friction equal to where the calculations for obtaining the longi- zero or close to zero is like standing on ice with tudinal, transversal and vertical accelerations skates on one’s feet, quite slippery therefore! at any position on board the vessel are done ac- Increasing the friction between the cargo and cording to the formulas provided by Det Norske the loading surface with e.g. rubber pads, walk- Veritas (DNV). The accelerations are then used ing boards or other measures is the best method to calculate the adequate securing arrangements to prevent cargo from sliding, if a method to fully according to the IMO publication 1994/1995 block the cargo cannot be achieved. If additional Amendments to the Code of Safe Practice for securing is needed to prevent the cargo shifting, Cargo Stowage and Securing. a suitable number of over the top lashings and/or ExcelLoad Cargo Securing Solutions helps loop lashings can be used, which is also described professionals to fi nd effi cient cargo securing in detail in the attached lashing protocol devel- arrangements for road, rail and sea transports. oped for the above-mentioned steel transport. From a set of inputs such as cargo dimensions, The response of the Swedish Traffi c Police weight, friction and mode of transport, the soft- mentioned above is, of course, not signifi cant ware calculates the forces acting on cargo during For more information, please visit for traffi c police in general, and a small group the whole transport, and presents the optimal www.excelload.com of police offi cers have already participated in the number of lashings needed. A printable lash- training programme on cargo securing offered ing protocol is generated, intended to follow the by the Swedish Coast Guard. Hopefully, the re- cargo in transit. sponsible persons within the Swedish Police Au-  thority will realise that all traffi c police offi cers

5 The Swedish Club Letter 3–2008 Loss Prevention P&I

in

The UK Marine Accident Investigation paratus, the motorman recovered and was Branch (MAIB) issued a Safety Bulletin enclosed able to leave the tank. However, the sea- in July 2008 to raise awareness of loss man never regained consciousness. He had of life of seafarers working in enclosed been asphy xiated in the oxygen depleted at- spaces. Since September 2007 the MAIB mosphere of the tank, which had not been has started three investigations into ac- spaces inspected for several years and was heavily cidents in which a total of six seafarers corroded. It is not certain why the seaman have died in enclosed/confi ned spaces: This article was previously published in MAIB Safety entered the tank but it is likely it was to de- Bulletin 2/2008. The bulletin is also available on termine whether a small amount of water in 4 On September 23rd 2007, three experi- www.maib.gov.uk the tank bottom was salt or fresh water. enced seamen died inside the chain locker on board the emergency response and res- Increasing number of accidents cue vessel Viking Islay. Co-incident with the MAIB investigations, the The fi rst two were overcome while ty- Marine Accident Investigators International ing off an anchor chain to prevent it from cut. This allowed a path for the air from the Forum (MAIIF) identifi ed the large number rattling in the spurling pipe. The third to self-heating cargo, to enter the store. When of fatalities in the shipping industry world- die was the fi rst rescuer who entered the tested, the air in the cargo hold contained wide which were related to work in confi ned chain locker wearing an Emergency Escape only 6% oxygen. or enclosed spaces and considered that the Breathing Device (EEBD). He was soon occurrence of such accidents was increasing. constrained by the device and removed 4 On June 11th 2008, an experienced sea- Accordingly, in October 2007, MAIIF tasked its hood. All three men died as a result of man died on board the passenger cruise its representative from Vanuatu to research the the lack of oxygen inside the chain locker ship Saga Rose after he entered an almost incidence of this type of accident with a view to caused by the on-going corrosion of its steel empty ballast tank. the submission of a paper to the International structure and anchor chain. The tank’s manhole cover, which was in- Maritime Organization (IMO). To date, re- side a small cofferdam accessed from with- sponses from 18 administrations identify 120 4 On January 18th 2008, two seamen col- in the engine room, had been removed and fatalities and 123 injuries resulting from entry lapsed in a store on board the general cargo the seaman had been instructed to confi rm into confi ned spaces since 1991. These sta- ship Sava Lake. the tank’s contents. As it was not intended tistics do not include the fatalities from Sava The chief offi cer entered the store to try for the seaman to enter the tank, no per- Lake or Saga Rose. and rescue the men but was soon forced to mit to work was issued. When the seaman leave when he became short of breath and was found to be missing, an experienced Safety Lessons his vision narrowed. The two seamen had motorman was sent into the cofferdam to There can be few aspects of personal safety been asphyxiated. The store was adjacent to check on his wellbeing. He found the sea- on board ships that have received more at- the vessel’s forward cargo hold containing man lying at the bottom of the empty tank tention than the importance of following the ‘steel turnings’. To allow for the drainage and raised the alarm. The motorman then correct procedures before entering a danger- of sea water and the removal of cargo resi- entered the tank but collapsed when try- ous enclosed/confi ned space. Tragically, it is due, the bellows pieces on the cargo vent ing to recover the seaman. After the ship’s clear that the measures which have been put trunk either side of the cargo ventilation emergency response team provided air to into place have failed to prevent the death of fan motor, located in the store, had been the stricken crew via in-line breathing ap- many seafarers. Indeed, the data collected on

66 The Swedish Club Letter 3–2008 Loss Prevention P&I ILLUSTRATION: HANS DAHLBERG HANS ILLUSTRATION:

Don't forget to check the atmosphere before going down there!

behalf of MAIIF indicates that accidents in It is essential that the IMO recognises the Recommendations enclosed/confi ned spaces continues to be one unacceptably large fatality rate in this area Shipowners and managers, and industry bod- of the most common causes of work-related and takes the lead in identifying initiatives to ies and organisations are recommended to: fatalities on board ships today. This is due to: improve this very poor safety record. It is also • Identify and implement measures aimed at vital that all shipping industry bodies raise the improving the identifi cation of all danger-  Complacency leading to lapses in proce- awareness of the continuing and increasing ous and potentially dangerous spaces and dure; number of deaths in enclosed spaces to show increasing compliance with the safe work-  Lack of knowledge; that no-one is immune to the physical effects ing practices required when working in  Potentially dangerous spaces not being of the lack of oxygen or harmful gases. While such compartments. identifi ed; and, the holding of breath might seem a logical step • Individually and collectively raise the  Would-be rescuers acting on instinct and to a person entering a tank ‘for a few seconds’ awareness of the continuing high incidence emotion rather than knowledge and train- or to a would-be rescuer, it is all too frequently of fatalities of seafarers working in enclosed ing. the last life sustaining breath he or she ever spaces. takes. 

77 The Swedish Club Letter 3–2008 Member portrait

The Mr Peter Harren, the founder of Harren & Partner. Harren & Partner Group

  The Harren & Partner operation of ships and their eventual sale. Therefore Harren & Group was founded in 1989 Partner is able to offer far-reaching services which successfully with the purchase of the mul- accompany the whole lifecycle of a ship. The 1,300 employees on tipurpose carrier Orion III by shore and on board ensure in their daily work that the wide range of captain and master of com- the company’s worldwide activities meet the highest standards. merce Peter Harren. Early in Member Portrait his life he began his career as The fleet today a sailor, first on coastal ves- From its foundation until today the fleet has grown on a sustained sels and he later went in for basis and currently includes 47 ships from the various segments: the Great Voyage as a captain. After 15 years at sea he planned to tankers, container feeders, heavy lift carriers, bulk carriers, multi- found a shipping company of his own and consequently began his purpose carriers and dock ships. The majority of the ships vary studies in business administration. in size between 4,000 dwt and 16,000 dwt, and they are able to “During my time as a sailor and captain I saw many companies utilize smaller harbors. The largest vessels of the fleet are bulk in this branch which had such serious liquidity problems that dur- carriers with sizes of 70,000 dwt. It is conspicuous that the ships ing difficult times they were not even able to pay their telephone achieve the highest quality and safety standards. “We implement bills”, Peter Harren says about his experience. Obviously he was safety instructions on our ships, which are not yet prescribed. For looking for a different way to run his own company, and the com- example, our small tankers have already been equipped with inert bination of his different professional backgrounds gave him the gas units to decrease the danger of explosions” reveals Peter Har- possibility of looking at the shipping business from a different an- ren about the focus on safety, which is self-evident for the Harren gle. The result was the strategic decision to diversify the fleet from & Partner Group. the outset. Operating in many different shipping markets should Relationship be the basis of success and the way to limit the risks. So he chose with The Swedish Club to build up a fleet consisting of bulk carriers, tankers, container Harren & Partner became assured with The Swedish Club in late feeders, and heavy lift carriers, which together serve to reduce the 2000, when the group took over two Panmax bulkers. “It was the risks involved in typically fluctuating shipping markets. first time that we have arranged cover for our vessels outside our borders and we dare to say it was a good idea”, says Peter Grön- Company policy includes woldt, insurance manager of the Harren & Partner Group. important philosophy In 2003 the fleet grew with the acquisition of three handysize Apart from diversification, the company policy includes another and four handymax bulkers plus some container vessels later on. important philosophy, which is to offer all necessary ship operating Today the group has nine vessels covered for H&M and LoH with activities from a single source. True to this concept, the Harren & The Swedish Club as the leading underwriter. Partner Group encompasses various companies, each with a clearly Peter Grönwoldt sums up: “Every shipowner buys insurance defined sphere of responsibility. The closely linked departments cover for the unexpected and undesired moment. Nobody can at the Bremen head office allow for customized concepts ensuring always be fortunate, and sometimes you cannot avoid an accident, top quality and maximum flexibility from the conceptual design no matter how hard you try. But we strongly believe that only in of a new vessel and supervision of construction work to the smooth a distress situation can the value of any cover be seen in its true

88 The Swedish Club Letter 3–2008 Member portrait P hotos : & harren partners

The Blue Giant, equipped with helicopter landing deck, cabins for Harren & Partner is taking a new approach: upcoming cadets gain 200 workers and a bell for operations in a water depth of 200 m. practical experience on board the ice-fitted Hanse Explorer. TheHarren & Partner Group

light. We have experienced professional assistance combined with too small, only five years after it was opened. In 2007 the group technical know-how plus an understanding of the shipowner’s opened a new extension and now the whole office complex offers needs and sorrows.” space for more than 150 people. But the dynamic evolution of the Innovations group has different faces, and the fleet is only one of them. The The innovative potential of the group has been proven lately in the group is always monitoring the shipping markets in order to jump common development of the Combi dock ships with experts from at the chances when they appear. The latest activity in that regard the Lloyd Shipyard in Bremerhaven. The vessels are equipped for was the large modification of the second combi dock vessel Blue the operation of sophisticated projects and especially accommo- Giant. Because of the need for off-shore compatible vessels, the date the wishes of the shipping industry, to transport completely Blue Giant was equipped with a helicopter landing deck, cabins mounted units, which are continuously increasing in size. The for 200 workers and a bell for operations in a water depth of 200m. owner of the vessels is the company K/S Combi Lift which emerged With this equipment the vessel can be deployed for off-shore opera- from a joint venture between the Harren & Partner Group and tions on pipelines, valves and so on. J. Poulsen Shipping A/S in 2002. K/S Combi Lift supervises a fleet of eleven modern heavy lift carriers, which are optimized for The training vessel Hanse Explorer the transportation of various project cargoes, including dangerous Somewhat different from the daily business of the Harren & Part- cargo. ner Group is the operation of the Hanse Explorer. This ship is The high standard of this fleet is underlined by the combined especially designed to enhance the training of junior staff, as one bestowal of three certificates for quality management (ISO 9001), of Harren & Partner’s declared objectives is a high proportion safety management (ISO 14001) as well as environmental manage- of trainees. In addition to the usual onshore training, Harren & ment (OH SAS 18001). Thus Combi Lift K/S is the first company Partner is taking a new approach: upcoming cadets gain practical worldwide which can exhibit these three DNV certificates for land experience on board the ice-fitted Hanse Explorer. as well as for shipping operations. The operating of the dock vessels Moreover, the vessel can accommodate up to twelve passengers will be effected by the Harren & Partner Group. for a very exclusive and private cruise. While the Hanse Explorer Apart from that the market demands for ship operating ac- navigates through fascinating landscapes, the passengers can enjoy tivities are always on the lookout for innovative potential. One the luxury interior and delicious food, which the vessel offers in example is H&P Logistics & Engineering GmbH & Co. KG abundance. founded in 2007. This company meets a huge market with tailor Future prospects made transport solutions for door-to-door project, and heavy cargo At present the order book comprises twelve vessels, which shows loading …and all from one source! that the growth of the fleet is far from over. To follow the markets, as the Harren & Partner Group usually does, the focus currently Dynamic growth lies on heavy lift carriers. Nobody knows where the limit of growth With the continuous growth of the fleet more and more employees will be, but until today there is no reason to change the strategy were needed over the years in order to maintain the high standards that Peter Harren conceived nearly twenty years ago. Diversifica- of shipping operations. For the staff at the Bremen head office tion was, and will remain, the basis of success. the group built a new office building in 2002. But as company  growth exceeded all expectations, the new building soon became

99 The Swedish Club Letter 3–2008 Salvage Prestige and MSC Napoli: two very different approaches

The salvage perspective…   The lead salvor in the case the shape of a disastrous spill. This of the Prestige was SMIT. They vessel had hull damage and was in requested a place of refuge and danger of breaking up as her struc- were refused, despite warning the tural integrity degraded. She was in Spanish authorities of the potential no fit state to survive bad weather. consequences. They had lined up a If the tanker had been permitted preferred location for refuge. I am to enter a refuge, plans could have sure that, had their request been been implemented to minimise the granted, the vessel would have been environmental impact, including saved. Pollution would have been protective booming. In any event, Response to major ship casu- minimal. The Spanish took what at that point the leakage from the alties, especially those with a they thought was the easy way out. Prestige was extremely limited. They ordered the casualty – under So, the big lesson from this potential to cause gross pol- tow at the time – to head out into case is that the easy decision is not lution, is now characterised the hostile Atlantic. Now that deci- necessarily the right one. In fact, sion can be seen as instrumental in Lars Landelius prompt access to a refuge would by intense media interest, the loss of the vessel and the entire have been the key to bringing this political sensitivity and, in cargo, resulting in clean-up and compensation costs situation under control. Instead, the authorities exceeding 1 billion Euros. gambled that this ship would not break up before many instances, an acute fear becoming someone else’s problem. of the economic and environ- The easy decision is not always the right one The beaching was a brave decision mental consequences of a It is always easier for politicians to say no. At least, The MSC Napoli case offers a sharp contrast. As Secretary of State’s Representative, or SOSREP, catastrophic spill. ordering her out appeared to be easier, until the con- sequences of this course of action became clear, in Robin Middleton represented the national interest In this article Captain Lars Landelius, The Swedish Club’s salvage expert, and former A former SOSREP’s perspective… SOSREP Robin Middleton   One key principle of the Brit- personally, a beaching incident on this scale was one of my night- compare and contrast the ish system is a readiness to deal with casualties occurring in UK mares. There was a very real pos- Prestige and MSC Napoli waters, rather than exporting them sibility that such a situation could elsewhere. During the Prestige op- happen at any time. In fact, we had cases. eration, SMIT asked me whether looked at potential beaching loca- I would be prepared to accept the tions. At the same time, it was with tanker as the Spanish had rejected a sense of disbelief that I was faced it. I replied that we would receive with the decision to approve the the Prestige if the vessel was dis- beaching of a major casualty when charged and in a stable condition only one month from retirement but, that, of course, was not the – after eight years in the post! point at issue. This tanker needed shelter quickly, without the stresses Difficult decisions are the of an ocean voyage. stock in trade In the case of MSC Napoli, Robin Middleton These feelings were suppressed there was never any doubt that this very quickly. The SOSREP deals vessel could sink. The French asked for help as this with incident after incident and difficult decisions vessel also posed a threat to the UK and the UK was are the stock in trade. You become battle-hardened. best placed to receive it. The MSC Napoli situation developed rapidly on January 17 last year. At that point I had faced four Beaching was one of my nightmares incidents since the New Year, including a ground- Beaching the MSC Napoli prevented its sinking ing at Montrose and another in the Pentland Firth in the middle of the English Channel. Speaking – involving a ship with an explosive, toxic cargo.

1010 The Swedish Club Letter 3–2008 AGM Salvage Prestige and MSC Napoli: two very different approaches oolMG EFE P hotoEFE

The salvage perspective… x/EPAP canpi

in this emergency. The deliberate beaching of S :

the casualty was a brave decision on his part. hoto P Bringing a casualty into a refuge is always controversial at the local and regional level, for obvious reasons. This ship was set down off Branscombe, Devon, in a World Heritage area known as the “Jurassic Coast.” There were thousands of tonnes of HFO in her tanks. The cargo of over 2000 containers included haz- ardous substances. Lyme Bay is a sensitive location for a place of refuge but, in practical terms, Middleton had no choice. There really was nowhere else to go. Happily, the relatively positive outcome vindicated a prompt, coura- geous decision. The Prestige sinking off the Spanish coast in November 2002.

The effectiveness The Prestige case. In 2002, the crippled tanker Prestige was refused a place of refuge by of the SOSREP system the Spanish authorities. As a result, the casualty was ordered out into the Winter Atlantic. The I have no doubt that the UK’s SOSREP system Prestige broke up just a few days later, producing pollution damage estimated at over 1 billion is the finest command and control structure to Euros. be found anywhere in the world. Its effective- There is a widespread consensus that refusal of a place of refuge contributed to the loss of ness has been demonstrated time and again. the Prestige and her cargo. At the same time, no-one can deny that unpalatable choices must be Taking a decision to deliberately beach a ship faced when a tanker is damaged and actively leaking oil. The International Maritime Organization is no easy matter. I have done it in the capacity attempted to confront the problem of shelter for casualties in the 2003 “Guidelines on places of of Salvage Master. The casualty was relatively refuge for ships in need of assistance,” IMO Resolution A949(23). In particular, the IMO Guidelines continues on page 12 attempt to reconcile conflicting factors. It may be beneficial, in an emergency, to allow the ship 9 to approach the coast and enter a port or haven. On the other hand, allowing access to a refuge A former SOSREP’s perspective… could aggravate the dangers of pollution. I had been up all night the night before the MSC Napoli emergency and I was running out of clothes. When the news came in I was at the MCA’s Southampton headquarters. It was around 10.30 in the morning. After tracking the casu- /PA WIRE/PA /PA PHOTOS/LEWIS WHYLD alty for the day and speaking to the French X

I eventually accepted it into UK waters after SCANPI: midnight that night. I ordered that the vessel hoto should proceed to the Outer Portland Harbour P area for shelter and to allow stabilising opera- tions. The towing tugs altered course for UK at around 05.00 in the morning and the tow part- ed. By the time the tow had been reconnected it was too late for the vessel to make passage round the dangerous Portland Bill headland in daylight. I ordered it to overnight in a fairly sheltered position in Lyme Bay, having refused The MSC Napoli beached off Branscombe, Devon in January 2007. a request for it to go into Torbay. The MSC Napoli case. In the case of the MSC Napoli, damaged and in a critical condition While the vessel was sheltering overnight during a severe storm in the English Channel in January 2007, the UK authorities allowed access in Lyme Bay, I moved the UK command and to refuge in Lyme Bay. When the container vessel’s condition began to deteriorate rapidly, the control centre to Weymouth. I had already de- UK SOSREP at that time, Robin Middleton, sanctioned the proposal to deliberately set this vessel cided that beaching was a real possibility in this down to prevent her sinking – despite the presence of 3,600 tonnes of heavy fuel oil in her bunker instance. I had also given the environmental tanks. 9 continues on page 12-13 1111 The Swedish Club Letter 3–2008 Regulations Salvage

IMO calls for increased damage stability of cargo and passenger vessels

  The International Maritime Organisation (IMO) has resolved to step abandoned to the wind and waves. If an accident happens near to the up protection of new cargo and passenger vessels in the case of accident. coast, total loss can quickly occur along with serious consequences Accordingly, all new vessels built from 1 January 2009 will be governed for the marine environment. by new technical design regulations to ensure a higher level of stability in a damaged state. On board documentation also for tankers The decisive factor in implementing the new stricter SOLAS regula- New SOLAS 2009 tions that come into effect on January 1st 2009 is the date of laying In the recently revised SOLAS regulations, the previous concept of risk down the keel. All vessels lay down after this date must comply with assessment has been extended. On the basis of current average statistics, these requirements. For cargo and passenger vessels now in planning, IMO saw itself obliged to devise a better method of assessing the residual an extensive recalculation of the damage stability is now necessary. In stability of damaged vessels. This now applies not only to cargo vessels, but addition, special “on-board” information for damage control is being also to passenger vessels. The new regulations clearly stipulate that these called for, which will be documented in a damage-control plan for vessels must have a double bottom that extends over their entire breadth. the crew. A new aspect in the IMO requirements is that this on-board Vessel designs without a double bottom are only permitted if a comparable documentation is also to be introduced for tankers. level of safety in the event of grounding is proven by means of additional The IMO committees have been working since 2005 on improv- calculations. ing the technical protective measures with regard to damage stability. No exceptions apply to lubricating oil circulation tanks arranged under In particular on the recommendation of the flag states, the decision the main engine. With regard to their arrangement, it is important that came about to ensure better protection. a minimum distance of 500mm to the keel line of the vessel is always ensured. The specification in the new SOLAS 2009 regulations has been A formal decision will be taken in November agreed in order to prevent lubricating oils from escaping or the engine from The rules of SOLAS 2009 are being augmented with “Explanatory sucking up seawater in the event of a vessel striking the ground. Notes” containing technical explanations. IMO finalised the content The latter inevitably results in the main engine failing. Without engine in July; a formal decision on the “Explanatory Notes” will be taken power, a vessel is rendered disabled in the case of average, thus leaving it at the meeting of the Maritime Safety Committee in November. The

The salvage perspective… A former SOSREP’s perspective…

continued from page 11 small, however, and the working envi- continued from page 11 experts the op- 9 ronment, all those years ago, was very 9 portunity to different. The salvor had much more identify a bet- flexibility in those days. I simply talked it over with the Coast Guard ter option. They backed the choice of Lyme and got on with it. Bay. In many respects, the actual beaching location was ideal. Emergency Towing Vessels During my drive to Weymouth I stopped I have also been involved in another beaching, in my capacity as SCR. for an early breakfast. I was then informed This involved a 30,000 DWT cargo vessel which had to be beached in by the salvors that, with daylight, they could Japan after a grounding ripped the double bottom open. In that case, see the vessel was settling and would sink. It the Tasman Pioneer, the authorities agreed promptly to a beaching, was at that point that I gave the instruction to but guarantees were put up by the Club. beach the vessel in Lyme Bay. It would be wrong, at the same time, to imply that all recent devel- opments have had a negative impact. For example, many governments The right decision was made but many now invest in standby salvage, with ETVs – Emergency Towing Ves- people doubted sels – stationed around the coasts and ready to intervene when neces- The decision was the right one but many peo- sary. This is a prudent response to the ever-present pollution risk. ple felt otherwise at the time. I’d just made a decision that everyone felt would lead to me Quick response – a central issue being sacked. For some days afterwards, as the As for the P&I Club, the central issue here is its ability to respond salvage proceeded, people took the view that to ensuing liabilities and to possible requests for guarantees in addi- this would be the end of the road for Middle- tion to the certificate already provided under the CLC and Bunker ton. They were wrong. conventions. Occasionally, the guarantees demanded are excessive. At It is often overlooked that the problems at the same time, no-one can guarantee that there won’t be liabilities. In Portland dominated this case. We were going most instances, a Club Letter is accepted, but there can be difficulties to land the best part of 2,500 containers and, when this is not so, as delays result. at one point, I had to threaten to take over the To conclude, I do not believe that the catastrophic Prestige spill port unless a “Notice to Quit” was lifted. In would have occurred, had Spain had its own SOSREP figure, armed 2003 the UK extended powers of intervention with the necessary political power. I believe every EU coastal state within their waters to include the ability to should adopt the SOSREP system. take control of any public or privately owned  coastal facility and use it for purposes includ-

12 The Swedish Club Letter 3–2008 Regulations Salvage P hoto : i S tock P hoto IMO calls for increased damage stability of cargo and passenger vessels

technical explanations of the new SOLAS regulations are available for inspection by design offices, shipyards, ship owners and the sup- plier industry on the Germanischer Lloyd website. The leaflet for damage stability calculations SOLAS 2009 is available at www.gl- group.com.

International minimum standards The International Convention for the Safety of Life at Sea (SOLAS) is a UN convention governing ship safety. The convention creates international minimum standards on merchant vessels and stipulates binding rules governing all conceivable preventive measures. SOLAS contains technical regulations that prescribe safety-enhancing struc- tural measures and equipment for assuring damage stability and the general improvement of ship safety. The stability of a ship corresponds to the residual safety in the case of average. Stability is not only calculated on the basis of the hull construction, but also applies to varying loads. The stability assessment is more difficult in complex vessel designs and variable service conditions.  For further information, please contact: Christoph Peickert Germanischer Lloyd AG Deputy Head of Stability Department E-mail: [email protected]

A former SOSREP’s perspective…

ing offloading of cargo, etc. It was clearly better Eventually, at the request of all concerned, I conducting its own enquiry into the incident. for the port to continue to run itself but I could did oversee the running of the port for the du- Meanwhile, the weight of history favours the not allow anything to halt the salvage opera- ration. At that stage, I also moved beyond the use of Lyme Bay as a refuge. In 1795, for ex- tion until the threats posed by the casualty had SOSREP role, being nominated “Gold Com- ample, The New Practical Navigator* made been removed. mander”, responsible for handling both shore specific mention of the value of Lyme Bay as a We had to clear a series of sites in the port, and offshore aspects of the response including shelter from southerly gales. construct bunds to contain leaking boxes, set the activities of the civilian and police organi-  up security systems for the reception of hazard- sations. This was a first in the UK. ous and dangerous goods, establish a treatment centre for oily materials, open huge container Doubts have been raised at the use of washing bays – destroying a football field in Lyme Bay as a place of refuge the process – and set up an isolated site for the Meanwhile fresh problems continued to arise, work of the Chemical Strike Team. These facil- ranging from spontaneous combustion of the ities were operating round-the-clock for many contents of some of the boxes to a tip-off from months. At one point, we had space for just 15 Interpol, passed on by Special Branch, that more containers and we had several hundred one container may hold asylum-seekers. The still on the ship. cargo and waste processing task was immense. The operation produced thousands of tonnes “I moved beyond of scrap metal, oily water, and contaminated the SOSREP role” and foul goods. For a significant period we Things were made worse by the difficult re- kept seven of the UK’s largest waste reception * “The New Practical Navigator” was written by lationships between the port authority, other facilities occupied round the clock. I would John Hamilton Moore, Teacher of Navigation, contractors based within the port, salvors, have stepped down from the SOSREP post Hydrographer & Chartseller to H.R.H. the Duke of chemicals management contractors and those in February 2007. As it was, the case deferred Clarence. This work contains specimen exam papers responsible for the various storage and process- my retirement by almost a year. And, during for Admiralty and East India Company Officers. ing sites. As a result of the overwhelming de- this period, many other incidents occurred One question asked: “State what you would do if you mands of the salvage operation and associated – all demanding SOSREP’s attention. The commanded a man of war that had become embayed in Lyme Bay in a strong southerly gale.” activities, the port itself was grinding to a halt. fact that the decision to beach MSC Napoli The recommended answer was: “Run her up Everyone was interfering with everyone else off Branscombe is now widely regarded as the the beach” (with extra marks for those who and there was no system of overall control and right thing to do brings some compensation for remembered to advise reducing sail just before coordination. Feelings were running high. this delay. Devon County Council is currently impact, to save the masts).

13 The Swedish Club Letter 3–2008 ISM Spelling out the need to avoid a prescriptive ISM

During 2000 Dr Phil Anderson was engaged in doctoral research that included an extensive survey of the impact of ISM Code implementation. In 2005 he joined the IMO’s Group of Independ- ent Experts (GIE) to undertake a similar project. Both outcomes highlighted the lack of hard, em- pirical data required to measure ISM’s effectiveness with precision. There was, however, a wealth of subjective comment and feedback based on personal experience. More recently, in 2007, the UK’s Maritime and Coastguard Agency decided to commission work exploring issues arising from the IMO investigation. This project was entitled “Impact and ef- fectiveness of the ISM Code in the UK fleet and its influence on the development of a safety culture in the commercial shipping industry”. The contract for the work was awarded to Phil Anderson’s

  Regardless of individual views on the Dr Anderson’s colleague added some obser- Is the world moving towards a new and attributes or failings of ISM, this system is now vations of his own in this article. Looking at the more prescriptive ISM model? at the very centre of modern safety manage- Bourbon Dolphin’s lessons for the industry in a ment in the 21st Century shipping Industry. broad context, Arne Sagen questioned whether “I hope not. I think it would be a sad day if this Dr Anderson reflects: “Whenever fatal acci- ISM auditors are too prone to label deviations were to happen. Yet, at the same time, it is hap- dents, collisions, groundings and spills occur, as ‘Non-conformities’, with a “standard” time- pening now – at least at one level. Many smaller the subsequent root cause analysis will explore frame of three months allowed for correction. shipowners have bought their ISM systems off the way in which safety was managed and that Sagen noted that it is rare to classify problems the shelf. These off-the-peg manuals are all the process, inevitably, will take you to the ISM as ‘Major Non-conformities’ (which require same. Their use can lead to ludicrous situa- Code.” prompt remedial action and expose those re- tions. Finding a company with one of these sponsible to potential penalties, including the ‘standard’ systems always rings my alarm bells. Failure to comply with withdrawal of certificates). Some results of applying an off the shelf solu- a fundamental of the ISM Code tion can be laughable. For example, you can A recent article by ConsultISM team member Towards a more prescriptive ISM? find yourself asking a company how it intends Arne Sagen looked at the outcome of the Nor- Phil Anderson opposes prescription. He ex- to carry out crude oil washing on board its fer- wegian Government’s Commission of Inquiry plains: “There are many difficulties here, not ries! into the April 2007 loss of the anchor-handler least the fact that Courts have yet to interpret “In circumstances like this, ISM is just Bourbon Dolphin and eight of her crew. The failure to comply with ISM within the con- skin-deep. The system is put in place with the Commission found that there had been a fail- text of accidents. There are those, of course, sole aim of getting the required certificates. ure to comply with a fundamental of the ISM who argue for what I call a ‘Blueprint ISM.’ Managers of such companies will take ISM Code – that all risks are identified. More spe- At present, we have a mandatory Code setting seriously only when a court makes an example cifically, there were no vessel-specific anchor- out a framework but offering no detail. It is up in a fatal accident case and imposes harsh sen- handling procedures for the Bourbon Dolphin to each company to develop their own SMS. tences for corporate manslaughter.” and, furthermore, crew qualification require- It is a matter for the company to decide how ments were inadequate for the demanding to pursue and achieve goals identified within What is the significance of the recent UK operations undertaken. Classification society the SMS. MCA work? DNV and the Norwegian Maritime Directo- “This approach has many advantages. At rate failed, in their audits, to detect flaws in the the same time, much is left to interpretation “Well, it should be said that the UK flag is company’s Safety Management System (SMS) and this does tend to create problems. The not typical, as it is amongst the best. At the – in itself also suggesting a weakness in the company’s SMS must be ‘sold’ to Class, which same time, our findings have wide applicability Directorate’s auditing of DNV. acts on the flag state’s behalf. Meanwhile, en- within the industry as a whole.” The Commission’s conclusions include counters with regulators, such as the US au- a call for anchor-handling procedures to be thorities may produce demands for change to This project had four goals: vessel-specific. There was also an observation the SMS. The system is then modified, to be • To establish the effectiveness of the ISM that risk assessments should not be confined US-friendly, for example. In this way the SMS Code, as a tool to improve safety and safety to individual hazardous operations but also comes under differing regulatory influences culture, since 1998. extended to the vessel itself (and, indeed, both and so begins to move away from the first prin- • To establish ISM’s impact on the UK fleet vessels, if they are working together). ciples identified by the ‘owning’ company.” against the Paris MOU “White List” mari-

14 The Swedish Club Letter 3–2008 ISM the need to avoid a prescriptive ISM

consultancy, ConsultISM. The work programme was completed in March of this year and an outline of the findings was presented to the IMO’s Maritime Safety Committee in London during May. In this interview, Dr Anderson considers the failings of the ISM Code while, at the same time, paying due regard to its strong beneficial influence. He comments on the latest work for the UK MCA and has some blunt words for senior managers within shipowning and shipmanagement groups world- Dr Phil Anderson and ConsultISM Ltd can be contacted by wide. email at [email protected] or phone +44 1434 605 512 www.consultism.co.uk

time administrations, from 1998 to 2006. of July 1998. In the UK-specific case, this ap- aged to respect approved Safety Management • To investigate other safety and pollution proach is also fruitless due to the very small Systems. We also believe there is benefit to be prevention systems in use and identify incidence of UK flag vessel detentions. found in more focused training on the systems whether they can offer scope for improv- Phil Anderson says: “This work demon- approach to safety management, together with ing the ISM Code in any future revision. strates that shipping’s systems approach to an investigation into how other high-risk in- • To identify, in a broader sense, any poten- safety management is far from mature. This dustries, such as civil aviation, promote team- tial improvements to the ISM Code which reflects a long tradition of prescriptive rule- work in ways which will allow individuals who might form the basis of recommendations making. The respondents’ most frequent con- have not worked together previously to quickly for revision of the Code and its supporting cern centred on lack of standardisation in the slot together as team members.” guidelines. interpretation of what is required within an SMS. This, in turn, reflects unhappy experi- Fresh work under way Most in-depth study ences with external auditors who impose their Dr Anderson and his team continue to assess of ISM to date own ideas and interpretations. This can have a the impact of the ISM Code on modern safety This was a wide-ranging body of work, prob- detrimental effect and undermine the compa- management within shipping. One current ably amounting to the most in-depth study of ny and its SMS. The big danger here is that we project is examining the ability of non-EU ISM to date. Over nine out of 10 respondents are pushed into taking a big step backwards, states bordering the Mediterranean to respond participating in the study felt that ISM had to the ‘shelter’ of prescriptive rules. to a major oil spill. Part of this work concerns contributed to improved safety in a general the application of ISM to national fleets and sense. Over eight out of 10 felt that safety had Good SMS is achievable with governmental systems for monitoring compli- also improved in their own company as a re- minimum financial investment ance. sult of ISM. It was recognised that the cost “On a positive note, it was apparent that a good Phil Anderson remains deeply concerned of marine insurance claims had risen signifi- SMS is achievable with minimum financial about the way in which flag states delegate re- cantly, but there was consensus on the point investment, provided there is the necessary sponsibilities to classification societies, both in that shipping today was much safer and more commitment from senior management and the Mediterranean region and in other parts environmentally friendly than was the case 10 all involved in implementation. of the world. He says: ”The reality is that very years previously. “With most respondents concerned at the few governments are prepared to face up to absence of a uniformally agreed interpreta- their direct responsibilities. It is revealing that Full impact of the “ISM effect” tion of the existing ISM Code, there was no governments often commission comparative cannot be isolated suggestion that the Code needs revision. One ISM studies but rarely look, in a targeted way, The problem is that the full impact of the helpful suggestion from respondents was that at the ISM experience within their own fleets. “ISM effect” cannot be isolated from other in- external auditors should provide more positive This reflects the fact that this subject is highly fluences, such as the revisions to STCW and feedback – highlighting good practice when political and is likely to remain so.” MARPOL, together with the intensification found – as well as focusing on deficiencies and  of oil major vetting inspections and P&I Con- non-conformities. dition Surveys. Attempts to utilise Port State Control data to explore ISM Code implemen- Conclusions from the study tation fail due to the lack of benchmark data “Our conclusions from this study include the prior to the ISM Phase 1 implementation date view that external auditors should be encour-

15 The Swedish Club Letter 3–2008 Piracy Rocketing piracy calls for insurance review

  The number of piracy attacks and armed among the best covers in the business and it robberies is increasing quarter by quarter, both provides owners/members with a very com- on the oceans and in port. During the first Carola Weidenholm prehensive H&M, Loss of Hire and P&I six months of this year alone 71 vessels were protection against claims resulting from war- boarded, 12 hijacked, and 11 fired on. Attack- Corporate Communications related actions. One thing to note is the fact ers are also becoming more violent and more that piracy is covered under the ITC 1/10/83 heavily armed, which imposes a great threat and severity is alarming,” says Tord Nilsson. H&M conditions. The same applies to Swed- to crew and passengers as well as to ship and “This situation makes it even more important ish and DTV (German) conditions, whilst the cargo. This makes traumas, injuries, kidnap- for shipowners, ship managers and us, as a Norwegian Plan only covers Piracy under the pings and murders the main hazards for a crew marine insurance company, to review what we War cover of the Plan. In the future we might today. can do to assist our members in this respect,” see piracy covered only under the War poli- “Almost 200 crew members have been tak- he continues. cies, as it is difficult to determine whether a en hostage, 6 have been kidnapped, 7 killed piracy attack is carried out for political rea- and another 7 are still missing – and we are Important with the right sons and then called terrorism (covered by the only talking about half a year,” Tord Nilsson, insurance War Insurance under ITC, Norwegian, DTV Area Manager of Team Göteborg 1 and Sen- On 31 May 2008 transits through the Gulf of and Swedish conditions) or for economic rea- ior Underwriter at The Swedish Club, points Aden were added to the “List of Areas of Per- sons (covered by H&M insurance under ITC, out. ceived Enhanced Risk” (Listed Areas) and the Swedish and DTV but under the War cover Somalia waters transit areas were amended as under the Norwegian Plan). Somalia the new high risk area a result of numerous piracy attacks. The War At present the piracy activity is increasing Risk Insurance is valid in all waters world- Current situation rapidly in the Gulf of Aden and around So- wide, except for a number of areas which are An estimate of 1,000 pirates harry in the wa- malia. During the first six months of 2008, specifically excluded. Trading to these places ters around Somalia. They operate from a 24 incidents were reported in the area and 19 is in most instances allowed but subject to an few mother ships sending out heavily armed of them occurred in the Gulf of Aden. At least Additional Premium, but can, if conditions speedboats that are hard to detect on radar. eight vessels have reported being fired on by are severe enough, not be allowed. If owners Generally it does not take more than 20 min- pirates armed with rocket-propelled grenade wish to trade to excluded areas, they have to utes from detection until they have taken over launchers and automatic weapons, according notify the Club prior to entering the excluded a ship. Mostly the ship and crew are then taken to the crime service at the website of The In- area, enabling the Club to provide the owner/ to the seaport of Eyl in Somalia, infamous as ternational Chamber of Commerce (ICC). It member with Additional Premium terms and a pirate’s nest, and ransom is demanded in re- appears as if the gangs now are operating more conditions. Upon leaving the excluded area the turn for the captives. off the northern coast in the Gulf of Aden, owner/member has to advise the Club that the According to Reuters, at present 13 ships where the close proximity to shore grants vessel has left the excluded area. Cover for the are detained in the Gulf of Aden and 200 sea- swift access to the many vessels passing south call or breach is usually offered for a specific farers are held hostage against their will. through the Suez Canal. time period which is also dependent on the To address the severe problem an interna- Second on the list of piracy is Nigeria, situation at the place/port in question and is in tional naval establishment has been stationed where 18 attacks were reported – 12 of them most charterparties paid for by the charterers. in the area. Included in this force is the Danish were aimed at vessels anchored at the port of For a full break-down of the current excluded warship, Absalon, which on the 17th of Septem- Lagos. Next on the list is Indonesia with 13 areas kindly visit our website and our most re- ber caught two vessels suspected of piracy out- acts of piracy. cent War Circular. side the Horn of Africa. On board they found “The escalation in the number of attacks The Swedish Club’s War Insurance is 10 pirates and typical equipment often used in hijacking civil ships. 4 The main targets for the robbers are nautical equipment, the crews’ personal effects and the ships’ safe. Also the European Union 4 In some cases the ship is seized or diverted and the cargo is discharged. (EU) is discussing arrange- 4 Attacks occur in South East Asia, Far East, East coast of South America and Africa. ments for the future safety of trade in the area. 4 Attacks occur as much at sea as in port at anchor. 

Good to know 4 The most exposed areas are: 1) Somalia, including Gulf of Aden 2) Nigeria, 3) Indonesia

16 The Swedish Club Letter 3–2008 Piracy

Rocketing piracy calls for insurance review Photo: U.S. Navy photo/Released

Somali pirates in small boats were able to hijack the MV Faina. Piracy preventative measures Keep yourself updated on the piracy situation of your area of trading. The easiest way is at: www.icc-ccs.org

In piracy infested areas, be vigilant and maintain a 24-hour visual and radar watch.

Establish a ship’s security plan: stating crew responses, radio procedures and reporting procedures.

Appoint a security officer and make sure that the crew knows about the plan.

Set up an emergency area – possibly with separate communications – to which the crew can retreat if attackers board the ship.

Provide the strongest possible lighting over the side, bow and stern area. Be careful not to interfere with safe navigation rules at steam. Use search lights to probe for suspect crafts using radar guidance.

Seal off means of access to the ship. Access doors, holds and storages should be locked when not in use.

Keep water hoses ready for use and fire main pressurised.

Delay anchoring by slow steaming or longer routing.

Report any attacks or suspicious boats to the IMB Piracy Reporting Centre, e-mail: [email protected] or telephone:+603 2031 0014/+603 2078 5763

isit ICC Weekly Piracy Update at www.icc-ccs.org/prc/piracyreport.php for information and warnings regarding current high-risk areas.

17 The Swedish Club Letter 3–2008 Claims report

Claims Report New Flame   Titan Salvage have the wreck removal contract. They brought in the floating sheer- legs Taklift 6 for the removal of the accommo- dation block and other tasks on site. This crane was mobilised from Brazil to the wreck loca- tion, off Europa Point, Gibraltar. Following the removal of the accommodation the wreck was no longer visible above water. At the time of writing, the project team had recovered over 32,000 tonnes of the vessel’s cargo of scrap metal and some 35% of the hull/wreck itself. Work continues on recovering the remaining cargo and progressing the cutting and removal of the hull. This is being divided into sections A salvage team engaged in the removal with the help of Titan’s puller systems. The New Flame sank whilst departing Gi- of the wreck of the bulk carrier New braltar in August 2007. The vessel was entered with The Swedish Club for P&I, with a follow- Flame reached a significant milestone ing line for Hull & Machinery. Another sal- in August, with the cutting and lifting vor was awarded the original Lloyd’s Form for salvage of the New Flame, which was severely of the vessel’s 600 tonnes ac- commodation Progressing one of the most difficult wreck removals of recent times block. A sec- damaged and in a part-submerged condition following a collision. This salvor invoked the ond milestone was reached in October, SCOPIC clause. Work on the oil removal with the lifting of the complete bow proceeded, with completion on 12 September 2007. section, weighing in at approximately Stern section a priority 900 tonnes. The operation to remove Attempts had been made to sever the vessel’s the New Flame has proved to be one of stern section, with a view to refloating. This, unfortunately, proved to be unsuccessful for a the most challenging wreck removals of multitude of reasons. Titan became involved recent times. when the original LOF/SCOPIC was termi- Gibraltar's new tourist attraction? nated in early November. Tenders were invited and various bids for the wreck removal were cantly, with No. 5 hold and the engine room received by the closing date of 30 November partially flooded. The immediate priority at 2007. that point was to restore the aft section’s buoy- Discussions between the Club and Titan ancy. Obviously, with this work under way, reached a successful conclusion, with the the extensive preparations required for cutting agreement based on a Wreckhire 99 standard were delayed. Unfortunately, violent easterly contract form. gales, during February 9 and 10, led to the The initial plan was to cut and recover the sinking of the New Flame’s stern section and stern section afloat – as this was still above wa- the original plan, to remove the stern section ter – with the sunken forward section removed by refloating, was no longer viable. separately. The priority was to progress work on the A difficult job was made even more stern section. Titan mobilised to Gibraltar. challenging By the third week of December, however, the James Greene, Claims Manager P&I and casualty’s condition had deteriorated signifi- H&M, Team Piraeus, led the Club’s response.

18 The Swedish Club Letter 3–2008 Claims report

Progressing one of the most difficult wreck removals of recent times

Photo: The Swedish Club

He says: “Throughout this project bad weather longed period of bad weather set in and almost and political sensitivities have made a difficult the entire month of April was lost.” job even more challenging. Following the sinking of the stern section, Club and salvor Removal of cargo met in Gibraltar in order to develop a fresh Cargo removal operations began at the end of work plan, focusing initially on cargo removal. April, when the bad weather eased. By early Meanwhile, the barge Big Foot, together with July some 75 per cent – 32,000 tonnes – had cranes, excavators and other heavy equip- been removed and shipped out on coastal ves- ment, was mobilised from Rotterdam. This sels. The next step began on 27 July, when equipment included two 200 tonnes Leibherr work commenced on the removal of the ac- cranes, two 25-tonne grabs and heavy earth- commodation block. The main accommoda- moving equipment. The tug Braveheart was tion unit was landed at Cammell Laird’s yard fixed to tow the barge to Gibraltar. By the end in Gibraltar for processing. As work continued of March the wreck had been prepared for during August, the removal of sections of col- cargo removal. Unfortunately, however, a pro- lapsed structure provided access to more of the 9 continued on page 20

19 The Swedish Club Letter 3–2008 Claims report

continued from page 19 cargo. The final phase work programme will require 9 the removal of hold Nos. 1-5 and the engine room, together with around 1,000 tonnes of cargo and final clearance of the wreck site.

The weather and strong currents was the biggest problem Commenting on this wreck removal operation, Titan Project Manager Dan Schwall says: “We made further progress in September, but not as much as we would have liked. The biggest problem on site is the weather and the strong currents and – most importantly – the difficulties in forecasting accurately. On some days the tides are close to tide table and on others they are not. Gibraltar’s geographical location makes for very unpredictable weather. When the wind is from the east, there is plenty of distance, across the Mediterranean, to build up big swells.” Titan’s Project Manager added that the bow sec- tion has now been severed and delivered to the Steel- mac facility at Cammell Laird for scrapping. The sheerlegs Taklift 6 was used as the platform for chain-cutting. This sheerlegs has a lift capacity of 1,200 tonnes. The weight of the bow section is in the range of 900 tonnes due to an accumulation of cargo on the other side of the collision bulkhead.

Not the toughest – but the most complex Dan Schwall says: “We would hope to finish by the Dan Schwall: ”This is a full year’s end but many factors influence this timetable, not least the weather. We challenge…” still have the stern to deal with and it may be more cost-effective to scale down operations until more lifting capacity is available in the New Year. “Looking back, this hasn’t been Titan’s toughest wreck removal, but it is New Flame accomodation block then… certainly the largest and it has been full of challenge. We have done everything we can to increase production on site. For example, our diving team now ac- cesses the wreck through a dive tube. This does much to increase the dive time available, as it provides some protection from the strong currents. The weather, however, will continue to dominate the project.” James Greene adds: “This has been a costly, lengthy and difficult project. Many factors are involved, including extended weather down-time, political sensitivities, higher op- erational costs (including fuel) and additional coun- ter-pollution measures, together with successive ad- verse changes in the condition of the wreck. Taking weather alone, the barge Big Foot had to wait 28 days in port for the three-day weather window required to moor on location and commence cargo recovery. In total there have been some 97 bad weather days’ downtime, plus a further 11 days delay due to crane downtimes, change of circumstance, etc - totalling 108 days out of 292 days of the operational contract to September 30 2008.”

James Greene: Close cooperation ”A costly, One positive characteristic of the New Flame operation has been the close lengthy cooperation achieved (and maintained) between the parties, despite the emer- and difficult gence of many challenging issues. Taken overall, the work on site has been project…” progressed in a thoroughly professional manner. The fact remains, however, that it is no easy matter to recover over 32,000 tonnes of shredded scrap steel from 30m depth, at an extremely exposed location subject to very strong cur- rents. One persistent problem was the build-up of “walls” of scrap, caused when cargo failed to backfill into the hatches. These had to be shifted me- chanically. Club representatives were on site within 24 hours of the collision. This proactive approach included a remarkable level of commitment, typified by the Club’s decision to purchase recovered cargo, for resale. A total of 31,946 tonnes of steel scrap was delivered to buyers in Portugal, with coastal vessels …and now. making a series of 10 voyages to the purchasers. 

20 The Swedish Club Letter 3–2008 Claims report News from Piraeus P hoto : T he S C wedish lub

News from After Piraeus the rain…

  As this article is being drafted, the world is suffering perhaps the worst financial crisis since the 1920’s, with little end in sight. A great many of the shipowning interests in Greece are being rocked to the core, and those with extensive lending commitments, as part of a new building programme, are undoubtedly feeling the pain. The freight market continues to decline, with examples being quoted in the press of ships being fixed for “free”, with bunkers charged at cost. Given their dominance of world market share, it is not surpris- ing that Greek owners have seen their share of piracy attacks in the Gulf of Aden. In one week alone three Greek-operated vessels were hijacked off the coast of Somalia. Thankfully, loss of life has not featured in any significant way, although that might only be a mat- ter of time. What is certain is that the world’s population needs free P hoto movement of trade. We can but hope that the world’s powers can be

: T united in their approach to this serious problem. he S

C wedish Experience of recent claims in the Greek office have reminded us that, on a number of fronts, shipowners and crews alike should

lub revert to the basic principles of our industry, with a steady helm, a good lookout and proper maintenance. This will ensure that, hav- ing in recent years enjoyed an unprecedented period of prosperity, with the bad weather that is inevitably just over the horizon, the market in Greece will maintain its identity and prevail at the bottom of this cycle and beyond. As reported in the previous edition of The Swedish Club Letter, John Owen has now joined the Piraeus team. By coincidence – and he insists that it is entirely unrelated – we were notified of a major collision. John’s experience, not only as a Club man but as a Master Mariner, was amply demonstrated to the owners concerned. His training and familiarisation with our systems continues and John will be spending some time in Göteborg in November, after the Claims Handler’s Conference. It is with regret that we say goodbye to Annica Börjesson, who is moving to pastures new, and we all wish her well, although we do hope she will stay in touch with her friends at The Swedish Club. Although the storm clouds are gathering, and in time we will all feel the consequences of the current economy at both business and personal levels; thankfully in Greece we do not need to look far for some respite. Even in the winter there is often sunshine on the harbour… 

Clas Rydén General Manager The Swedish Club Greece

21 The Swedish Club Letter 3–2008 Cargo

 The basic requirement in carriage of tem- It must be emphasized that the set-point perature-controlled cargoes is to deliver the temperature should not be confused with the goods in the same condition as that in which Anders Wranå product temperature. The air warms up as it they were dispatched. As temperature-sensitive Hull Claims Adjuster moves through the cargo space, and the tem- goods deteriorate at a rate that is temperature- Team Göteborg III perature of the return air will be higher than dependent, temperature maintenance is para- the temperature of the delivery air. Exporters mount. must understand this difference when they make requests to a shipping Since modern container vessels, for example, provide ample capac- company regarding the setting on a container. Some exporters do not ity for reefer containers, this would require well-established operational differentiate between the set-point and the food product temperature.* routines as well as profound technical management covering the reefer System failures in container reefer units mostly result from prob- arrangements onboard a prudent reefer carrier. lems with sensory devices, modulation valves, high/low pressure valves, (reversed) circulation fans, clogged drains of defrost devices and fl oors, Reefer transports in general occasionally compressor, disturbed baffl e-plates. Refrigerated produce can be divided into two main categories. Live pro- 18% of the container claims were system failures related to reefer duce such as fruit, plants, vegetables, fl ower bulbs, and dead produce containers. This value has neither increased nor decreased since 2005 such as meat, fi sh, dairy produce, fruit juice, etc. The refrigerated cargo until this date. ** container has become the ideal mode of transportation to carry these It is, therefore, important that the handling agent and ultimately perishables of mostly limited quantity from one place in the world to the carrier shipping/ company and its engineers are familiar with the another. directions supplied by the manufacturer concerning repairs and main- Advanced techniques control the temperature and atmosphere in the tenance. container accurately and consistently, all with the aim of optimizing the keeping qualities of the cargo. Each individual product has its optimum Monitoring and daily routine checks storage temperature. However, within a certain product range the ideal Although there is a liability for the carrier under the B/L and reefer temperature may vary according to place of origin, season and variety. instructions to maintain monitoring of the reefer units carried on a Products such as plants and fl ower bulbs not only require a steady daily basis, there are few standardized documents that exist for check- temperature control, but also have certain requirements as regards rela- lists (onboard) concerning monitoring of temperatures, maintenance, tive humidity. Not only food articles but also many other products, repairs and power supply connections. Usually company-designed forms such as for instance photographic material, medicines and vaccines, may are utilized. benefi t from temperature-controlled storage. The information on these forms and the quality of the information received varies a lot depending on the experience of the, for example, Refrigeration systems the offi cer/engineer carrying out the monitoring work and also how the The operation of the refrigeration system depends on its construction information is interpreted. and control system. It is, therefore, important that the handling agent On board most trading vessels the job is still carried out by a dedi- and ultimately the carrier shipping/company is familiar with the direc- cated engineer. New containerized reefer vessels are sometimes provided tions supplied by the manufacturer. with a remote monitoring device. ** The set point is the temperature at which the controller is set. How- The needs for a standardized form (see example in appendix) must ever, the temperature in the cargo space depends on the location of the be stressed where the whole reefer system must be addressed, i.e. proper temperature sensor for the controller. When transporting chilled foods monitoring of mains, power supply, set temperatures, differences in tem- most modern refrigeration units are controlled by a sensor located in the peratures, alarms etc. delivery air stream, i.e. the air leaving the unit retains a sensor in the Further, this data should preferably be approved on a daily basis by return air for control when transporting frozen foods. a senior offi cer/engineer in order to discover any discrepancies and/or

22 The Swedish Club Letter 3–2008 Cargo PHOTO:ISTOCKPHOTO

reefer operations onboard

system failures in due time. This also makes it possible for a second opin- ers, and as a consequence of this, prudent operating procedures are re- ion about the values noted on the monitoring document. Standardized quired as well as a competent crew. routines and documents also make it easier for carriers that more seldom A recent study made at the Club involving performance on operating carry reefer units and thus do not have the same experience. procedures as well as statistics for casualties related to reefer carriage resulted in some prevention measures and methods that could be used Operating procedures and Crew competence on board. The basic requirement in the carriage of temperature-controlled cargoes  is to deliver the goods in the same condition as that in which they were *BMT De Beer b.v. ISBN-10: 908620001X ISBN-13:9789086200016 2005 dispatched. As temperature-sensitive goods deteriorate at a rate that is ** Questionnaire with BMT De Beer b.v. temperature-dependent, temperature maintenance is paramount. * Modern container vessels provide ample capacity for reefer contain-

23 The Swedish Club Letter 3–2008 MRM

New MRM training providers We welcome all these new training providers to the expanding Maritime Resource Management net- work.

Wärtsilä Land & Sea Academy, Finland, Philippines and USA In June 2008 we signed a MRM training agreement with Wärtsilä. In addition to being a leading engine builder, Wärtsilä offers a large number of training courses to cus- tomers through the Wärtsilä Land & Sea Academy. We have signed an umbrella agreement allowing the MRM In mid-September, a three-day MRM workshop leader meeting was course to be conducted at their training centres in Turku held at The Swedish Club’s Göteborg office. The participants represent- (Finland), Subic Bay (the Philippines) and Fort Lauderdale ed; Wärtsilä Land & Sea Academy, Finland, Liverpool Pilotage Services, (U.S.A.). U.K., Constantza Maritime University, Romania, Chalmers University

Liverpool Pilotage Services Ltd, U.K. In July 2008, an MRM training agreement was signed with Liverpool Pilotage Services Ltd. in the U.K. The company provides pilotage services for the busy River Mersey upon whose eastern shore the Port of Liverpool is located. As part of their continual professional development the Liverpool Pilotage Services will provide MRM training primarily for their own pilots but eventually also for external partici- pants.

Constantza Maritime University, Romania On 22 July 2008, the Club signed an MR M training agree- ment with Constantza Maritime University (CMU) in Ro- mania. CMU is a very active university and has - as one could read in the latest issue of our newsletter - quadrupled its number of maritime students over the last five years. Seminar in Manila on 10 July for Marlow Navigation, Marlow Navigation. Philippines In September 2008 we signed an MRM training agreement with our member Marlow Navigation. Marlow intends to run MRM courses at their new office and training building in central Manila but may eventually expand MRM train- ing to other locations.

Nova Contract Maritime Academy, Netherlands Just before the Workshop Leader Meeting in mid-Septem- ber, Nova Contract Maritime Academy in IJmuiden, the Netherlands signed an MRM training agreement. The academy provides vocational education for young people as well as business courses for adults. The college intends to make MRM part of their management courses.

Satakunta University of Applied Sciences, Finland Also in September, Satakunta University of Applied Sci- ences in Rauma, Finland, joined our group of MRM train- ing providers. The university has already provided resource Seminar in Odessa on 30 September. management courses for nearly 15 years.

24 The Swedish Club Letter 3–2008 MRM

Out and about with MRM  MRM activities flourished with unchanged intensity during the summer and early autumn of 2008. We are especially pleased to have been given several new opportunities of participating in members’ officer seminars with the half-day “Introduction to MRM of Technology, Sweden, Nova Contract Maritime Academy, the Netherlands, Maritime seminar”. On this page we publish Institute “Willem Barentz”, the Netherlands, Aboa Mare, Finland, Satakunta University of Applied Sciences, Finland and Kalmar Maritime Academy, Sweden. photos from a selection of recent MRM meetings and seminars.

Seminar on 26 August at Reederei “Nord” Klaus E. Oldendorff’s Limassol office.

On 2 Octo- ber, an MRM information meeting was carried out in Athens.

“Legendary” instructor Captain Andreas Leontopoulos (to the right) receives well-deserved recognition for long-time dedicated and professional training services to the benefit of The Swedish Club and the Greek shipping community. A cer- tificate and a gift were handed over by MRM Manager Martin Hernqvist in connection with the MRM Information Meeting in Athens on 2 October.

25 The Swedish Club Letter 3–2008 FD&D

Rule B attachment of EFTs  The last five years have yielded tremendous amount of the claim, has provided comfort to growth and prosperity in the shipping business owners and charterers knowing that if they are particularly among vessel owners and charter- James H. Power successful in arbitration their claim will be paid ers. Business was great and disputes were often Senior Counsel in full, including costs and fees, without having quickly settled. Even during these great times, Holland & Knight LLP, New York to scour the globe in search of the defendant’s Rule B attachments have been the “play” of often transitory assets. Similarly, by securing choice by companies seeking to secure claims funds pursuant to Rule B attachment of EFTs arising from disputes between themselves and other maritime players. a successful party has little to fear in enforcing an arbitration award in In the current downward trending freight market Rule B attachments some foreign and potentially hostile jurisdiction. Because arbitration are likely to be used with greater frequency. While the majority of Rule proceedings often take in excess of two or even three years, as seen by B attachments filed in the Southern District of New York were, and the countless allegations supporting interest calculations in Rule B com- are, in aid of foreign arbitration, they nonetheless are an important of- plaints, the financial ability of a defendant to pay a claim two years or fensive maneuver in any shipping playbook. As detailed herein, the ex more from the date the claim arose may be questionable. Thus, the quick parte attachment of Electronic Fund Transfers (“EFTs”) has leveled the offensive maneuver in the form of a Rule B attachment has well served playing field in many disputes. Attachment of EFTs, often for the full the interest of many maritime claimants over the last five years. Are You playing offense, defense or both?

recaps could include language evidencing an intent on Playing OFFENSE the part of the State owned company to agree to subject itself to Rule B attachment. Good Offense Requires Advance Planning Part of playing offense involves creating opportunities Offensive maneuvers to capitalize on the use of Rule B attachments. One can result in increased recoveries such opportunity concerns obtaining security against Another tool in an offensive playbook pertaining to State-owned companies. Over the last several years, Rule B attachments is ensuring that any legal fees in- many private mineral and petroleum companies have curred in obtaining security in aid of a foreign arbi- been “reclaimed” by State interests. Entering into con- tration are recoverable should an award be given in a tracts with State-owned companies, either on a short party’s favor. Absent an agreement to the contrary, legal term basis or on a long term basis poses serious conse- fees and costs incurred in obtaining security via Rule B quences should a significant dispute arise. Under the attachment are not recoverable in an arbitration award Foreign Sovereign Immunities Act (“FSIA”), the assets even though costs and fees incurred in pursuit of the of a company more than 50% State owned are immune arbitration can be recovered by the prevailing party. from Rule B attachment. This fact seriously limits the Various articles on Rule B attachments have suggested ability of a maritime claimant to obtain security for a costs and fees for Rule B attachments vary in range, but claim pending final outcome of an arbitration or some probably most often fall between $5,000 - $40,000. To other foreign proceeding. Therefore, even if a party is ensure that costs and fees incurred in obtaining security successful and obtains an award, it may never be able to in the U.S. pursuant to Rule B, a party need merely to execute the judgment against the State owned company include language in the contract stating that such fees on that State owned company’s home field. In order to and costs are recoverable. avoid this situation, a party may require a State owned company to waive its immunity under the FSIA, even if only for the limited purpose of subjecting itself to Rule B attachment. As such, charter parties, COAs or fixture

26 The Swedish Club Letter 3–2008 FD&D

Are You playing offense, defense or both?

Photo: Istockphoto

ling corporation’s business instead of its own. Playing DEFENSE When assessing whether a plaintiff has plead an al- ter ego theory of liability, courts consider a number of Playing good defense against Rule B attachments can factors including: 1) disregard of corporate formalities; save a party money by avoiding legal fees and costs as- 2) inadequate capitalization; 3) intermingling of funds; sociated with defending against Rule B attachments and 4) overlap of ownership, officers, directors, and person- more importantly, help ensure there are minimal or no nel; 5) common office space, address, and telephone major interruptions in wire transfer payments for busi- numbers of corporate entities; 6) the degree of discre- ness operations. tion sown by the allegedly dominated corporation; 7) whether the dealings between the entities are at arms Having an ability to accept and make payments length; 8) whether the corporations are treated as inde- may help avoid Rule B Attachments pendent profit centers; 9) payment or guarantee of the We have noticed a trend with respect to companies using corporation’s debts by the dominating entity, and 10) agents, subsidiaries and related companies to make and intermingling of property between the entities. MAG receive payments that invoke this principal. Though, Portfolio Consultant, GMBH v. Merlin Biomed Group over time, information regarding money transfer activi- LLC, 628 F.3d 58 (2d Cir. 2001). These factors are not ties usually comes to light and before long parties find mutually exclusive and courts have compiled lists with themselves subjected to Rule B complaints alleging alter more than fourteen factors to consider in determining ego theories. Over the last several years there has been whether to pierce the corporation veil. a movement by Judges towards granting writs of attach- To best avoid Rule B attachment, companies should ment against multiple related companies so long as the remember theses factors when engaging in business rela- pleadings contain the minimum required prima facie tions with subsidiaries or related companies. allegations. In order to avoid attachment of funds being routed by and between related companies a company Establishing a presence in New York by regis- must be careful avoid acts that might allow a claimant tration and appointment of agent for process to “pierce the corporate veil.” Courts often allow pierc- Registration as a foreign business corporation with the ing of the corporate veil where, 1) a corporation uses its New York State Department of State is another defense alter ego status to perpetrate a fraud or 2) where it so that has been around for some time but has gained se- dominates and disregards its alter ego’s corporate form that the alter ego was actually carrying on the control- 9 continued on page 28

27 The Swedish Club Letter 3–2008 FD&D

rious momentum in the last couple of years. 9 continued from page 27 Essentially, a foreign corporation, which may, or may not do any business in New York or the United States, registers as a foreign business corporation under Section 1304 of the New York Business Corpora- tion Law. In addition, minimal action is taken to estab- stockphoto lish a “presence” in New York by obtaining a “virtual I : hoto

office,” a telephone listing or other indicia of ongoing P operations within New York. The reason supporting this defense is found within Judges found that the particular defendant’s assets were the language of Rule B itself. Rule B states, “[i]f a de- immune to Rule B attachment by reason that the de- fendant is not found within the district when a veri- fendant was registered as a foreign business corporation fied complaint praying for attachment and the affidavit with the New York Secretary of State and had appointed required by Rule B(1)(b) are filed, a verified complaint an agent for service of process in the Southern District. may contain a prayer for process to attach the defend- As noted by one Judge in the Southern District, “the ant’s tangible or intangible personal property – up to the Court in this case, will follow the majority of decisions amount sued for – in the hands of garnishees named in in this District that hold a defendant’s registration as a the process.” foreign corporation to do business in New York State, Therefore, Rule B attachment is available only if with a designated agent for service of process in this defendant is not found within the district. There is District, satisfies both prongs of the Seawind Test for a two-pronged test to determine whether a defendant ‘found within the district’.” can be “found” within the jurisdiction of the district court at the time the action is filed. Although Rule B New Jersey Considered A “Convenient does not define the term “found within the district,” Adjacent Jurisdiction” But Not Connecticut the Second Circuit has interpreted it to require a two- In addition, a company defendant seeking to avoid Rule pronged inquiry. First, is whether the defendant can B attachment may well establish a presence, not in New be found within the district in terms of jurisdiction, York, but an adjacent jurisdiction. In Aqua Stoli the and second, if so, whether it can be found for service Second Circuit held that “[c]ircumstances that may of process. Seawind Compania S.A. v. Cresent Line, justify a vacatur [of a writ of attachment] can occur Inc., 320 F.2d 580 (2d Cir. 1963). Courts have tra- where 1) the defendant is present in a convenient adja- ditionally interpreted the term “found” to mean more cent district; 2) the defendant is present in the district than just having an agent for service of process in the where plaintiff is located; or 3) the plaintiff has already district. Some courts have required defendant to show obtained sufficient security for a judgment.” At least that it was engaged in such a continuous and systematic one recent court decision has significantly expanded the course of doing business that a finding of presence in the definition of the term “convenient adjacent district” for jurisdiction would be warranted. Erne Shipping, Inc. v. the purpose of vacating an attachment. In particular, HBC Hamburg Bulk Carriers GMBH & Co. KG, 409 the District Court in Ivan Visin Shipping, Ltd. v. On- F.Supp.2d 427 (S.D.N.Y. 2006) ego Shipping & Chartering B.V., 543 F.Supp.2d 338 (S.D.N.Y. 2008), held that New Jersey is a convenient No Longer A Need For A “Virtual Office” “adjacent jurisdiction.” Previously, it wa s a ssumed t hat a However, as evidenced by District Court rulings in the convenient adjacent jurisdiction only meant an adjacent last several weeks, a monumental shift appears to have jurisdiction within the same State. For example, a con- occurred in Southern District Court Judges’ interpre- venient adjacent jurisdiction to the Southern District of tation of the term “found” and the minimum require- New York would be the Eastern District of New York. A ments needed for a defendant to be “found within the winning play on this issue is far from guaranteed in light district.” Specifically, in the last several weeks, no less of another District Court’s decision in which a defend- than six Rule B attachment proceedings were initiated ant based in Stamford, Connecticut was found subject against one particular defendant. In almost all cases the to Rule B attachment because it was not found within

28 The Swedish Club Letter 3–2008 FD&D

a “convenient adjacent jursidiction.” In First American Bulk Carrier Corp. v. Van Ommeren Shipping (USA) Playing BOTH SIDES LLC, 540 F.Supp.2d 483 (S.D.N.Y. 2008), Judge Stan- ton held an “adjacent district is generally viewed as one This Time I Know I’m Right of another federal court within the same state (such as A careful review of the Southern District docket reveals the Eastern District to the Southern District of New that parties (and their attorneys) often find themselves York), not one in a different state, even if the two states in the position of arguing in favor of Rule B attachment are adjacent.” So, at present, some courts have found of EFT’s in one case and against attachment of EFT’s in that New Jersey is a convenient adjacent jurisdiction but another case. There has been more than one occasion Connecticut is not. This incongruous result will surely where the same party has several cases pending in which face further scrutiny by additional Southern District that party is both a plaintiff and a defendant in a Rule Court Judges in the coming months. B attachment proceeding. While the U.S. legal system provides wide latitude to both claimants and lawyers in Register Now, Register Often the pursuant of available remedies and in advocacy for Nevertheless, it now appears the most effective defen- a certain position, the time may fast be arriving where sive action to be taken by all companies seeking to avoid conflicts of interest soon may prevent one law firm from Rule B attachment would be to immediately file an Ap- taking a position in one Rule B case that is contrary to plication for Registration as a foreign business corpora- a position taken on behalf of another client in a dif- tion under Section 1304 and to appoint an agent for ferent Rule B case. For instance, recent District Court service of process within the Southern District of New decisions hold that appointment of an agent for service York (i.e. Manhattan). While this action may now ap- of process and registration as foreign business corpo- pear to be fully effective in avoiding Rule B attachments ration is enough to establish a presence in New York altogether, there are other important concerns which for the purpose of being “found” within the district. should be weighed before any foreign company, which Hence, Rule B attachment can be avoided. Some New does not already do business in New York, registers as a York and Connecticut based law firms act as agent for foreign business corporation. Potential negative factors service of process for those companies seeking to avoid associated with registering as a foreign business corpo- Rule B attachments. The time may soon come where ration in New York may include tax liabilities, increased a law firm registered as an agent for one company may tort liability exposure, and potential entry of judgment be called upon to argue on behalf of another company which could be enforced in jurisdictions around the that mere registration and appointment of an agent for world. Another potential defensive action might be to service of process is insufficient to establish presence appoint an agent for service of process and register as for the purpose of avoiding Rule B attachment. Only a foreign business corporation in the State of New Jer- time will tell to what extent companies in the maritime sey, which has been held to be a convenient adjacent game of Rule B attachment will continue to be able to jurisdiction for the purpose of avoiding Rule B. This play both offense and defense – sometimes even at the potential choice of jurisdictions illustrates the impor- same time. tance of obtaining further legal advice before making  any decision to register or appoint an agent for service of process in any State.

29 The Swedish Club Letter 3–2008 FD&D

Claimants seeking to attach “EFTs” head into overtime

Pre-season recap

Attachment of EFTs become part of every maritime claimant’s standard playbook For years now, maritime attachment under Rule B has been used to attach Electronic Fund Transfers (“EFTs”) as a means to obtain “quasi in rem” jurisdiction over a defendant and to obtain security for a claim in the U.S. or in a foreign proceeding. There have been numerous articles written about the subject, with some commentators crying foul and others touting riers GMBH & Co. KG v. Proteinas Y Oleicos the effectiveness of the uniquely maritime rem- S.A. De C.V., 2005 A.M.C. 1586 (S.D.N.Y edy. James H. Power 2005) Federal Judges in the Southern District Senior Counsel of New York have similarly expressed mixed Holland & Knight LLP, New York Aqua Stoli was thought to be reaction to the ex parte procedure aimed to a potential game changer attach the property of a defendant without attached at the time funds arrived at one of In early 2006, when the district court deci- first providing an opportunity for defendant several clearing house banks located in Man- sion in the case of Aqua Stoli Shipping Ltd. v. to be heard. In fact, the defendant often re- hattan. Maritime claimants used the decision Gardner Smith Pty Ltd. was appealed to the mains unaware that a writ of attachment has in Winter Storm to attach funds of both the Second Circuit, the international maritime been issued until it is advised by counsel for originator of the funds and the beneficiary of community faced the prospect that attach- Plaintiff or a garnishee bank that funds have the funds as the funds passed through an in- ment of EFTs would be limited or precluded been attached. termediary bank. altogether. From 2002 to 2005 the game had In 2002, the U.S. Circuit Court for the After Winter Storm various Judges in the changed as a new source of security was tapped Second Circuit in Winter Storm Shipping v. Southern District of New York regarded funds by maritime claimants. EFTs were ripe for in- TPI, 310 F.3d 263 (2d Cir. 2002) approved frozen at an intermediary bank in New York terception. However, it was argued by U.S. the “freezing” of EFTs. The Winter Storm de- to be “property” of defendant under Rule B banking institutions that attaching EFTs were cision marked a significant shift by maritime regardless of whether the defendant was the commercially and practically problematic be- claimants in the use of Rule B. Winter Storm originator (i.e. payor) or the beneficiary (i.e. cause they were caught in the middle of dis- involved a fund transfer where the defendant recipient) of the funds attached. The Judges putes often waged solely between two foreign was the originator of the transfer. In the wake reasoned that a defendant-beneficiary retains entities. Although the district court decision in of Winter Storm, maritime claimants pursued a property interest in an EFT regardless of Aqua Stoli had to do with the standard applied attachment not only of tangible assets but whether the funds were in the hands of an in- to vacating a Rule B attachment, it soon be- intangible assets including EFTs which were termediary bank. HBC Hamburg Bulk Car- came apparent that the appeal would be used

30 The Swedish Club Letter 3–2008 FD&D P hoto : I stockphoto

Are You in the game?

ness of our decision in Winter Storm seems open to question, especially its reliance on Daccarett, 6 F.3d at 55, to hold that EFT’s are property of the beneficiary or sender of an EFT. Because Daccarett was a forfeiture case, its holding that EFT’s are attachable assets does not answer the more salient question of whose assets they are while in transit.” Players in the maritime game of Rule B at- tachments hoped Aqua Stoli would provide a by interested parties as an opportunity to re- York,” “[Winter Storm] has undermined the definitive answer, one way or another, to the visit the issue of whether EFTs are “property” utility of dollar transfers through banks in the issue of whether EFT’s held by intermediary subject to attachment under Rule B. United States. As a consequence, U.S. banks’ banks are attachable assets under Rule B. But, role in this international payment system has were left only with the prospect of going into Former spectators become been undermined,” “Winter Storm has been overtime. vocal participants expanded into a virtual vacuum cleaner for The submission to the Second Circuit in Aqua wire transfers through New York banks” and Stoli of briefs amicus curiae from both the “Winter Storm’s ipse dixit determination that This season’s highlights Clearing House Association L.L.C and the an intermediary bank holds property of an Federal Reserve Bank of New York charged originator instead permits maritime plaintiffs EFTs stay in play as judicial that attachment of EFTs passing New York lo- to wreak havoc on that process.” referees rule in Consub cated intermediary banks caused “significant Despite cries of foul by unwilling partici- 2008 is shaping up to be pivotal year in Rule impediment to an efficient payment system for pants Clearing House Association L.L.C. and B maritime attachment decisions. Rule B cases U.S. dollar-based transactions…” and “threat- Federal Reserve Bank of New York, the Circuit at the District Court and Circuit Court levels ens potential disruption to the financial mar- Court in Aqua Stoli, 460 F.3d 434 (2d Cir. have expanded the scope of maritime contracts kets themselves, because of the uncertainty 2006) failed to change the playbook on Rule giving rise to Rule B claims and admiralty wrought by erratic attachment of Electronic B attachments of EFTs. In the beginning of claims generally, and endorsed continued at- Funds Transfers.” its opinion, the Second Circuit citing Winter tachment of EFTs in the hands of intermedi- Lawyers for the Clearing House Associa- Storm stated, “[u]nder the law of this Circuit, ary banks. While the Circuit Court appears tion L.L.C. further argued, “the maritime at- EFTs to or from a party are attachable by a to consistently reaffirm the practice of attach- tachment process since Winter Storm has court as they pass through banks located in ing EFTs, District Court Judges, faced with grown into a serious problem for the major that court’s jurisdiction.” On the other hand, seemingly endless daily filings, continue to financial institutions that clear dollar-de- the Court tempered Winter Storm’s authority continued on page 32 nominated funds transfers through New over EFT attachments stating, “[t]he correct- 9

31 The Swedish Club Letter 3–2008 FD&D

9 continued from page 32 find ways to limit Rule B attachments. attach EFT’s was indeed “open to question.” Vessel sales contracts may now There are currently approximately 780 “ac- In a concerted effort to make an end game rul- support Rule B Attachment tive” cases on the Southern District docket des- ing, the Second Circuit panel of three judges For instance, District Judge Shira Scheindlin ignated as “maritime contract” cases, which, unequivocally stated, “[o]ur holding today in the case of Kalafrana Shipping Ltd. v. Sea in almost all instances, involve Rule B attach- ought to jettison any speculation that this Gull Shipping Co. Ltd. (S.D.N.Y, opinion is- ments. Rule B complaints are filed on average note in Aqua Stoli foretold the demise of Win- sued October 4, 2008) recently made waves of one per day in the Southern District of New ter Storm.” Simply put, in the words of the when she beached decades of maritime juris- York. Following most of those filings are the Second Circuit, “Winter Storm was correctly prudence holding that a contract for the sale of writs of attachment served on the major New decided.” Based on the precedent set by the a vessel is a maritime contract. Despite herself York banks daily. By all accounts, Rule B re- Second Circuit in Consub parties to maritime recognizing that “[i]t has long been the rule lated activity in the Southern District seems to contracts can now make prudent business de- in the Second Circuit that a contract for the have increased since Aqua Stoli despite dogged cisions and manage expectations of obtaining sale of a vessel is not a maritime contract” Juge representations by the Clearing House Asso- security via EFT attachment should a charter Scheindlin nonetheless found that a Memo- ciation L.L.C. and the Federal Reserve Bank party or other maritime venture turn sour. Or randum of Agreement (“MoA”) to sell the of New York that continued attachments of can they? Interestingly, the Court in Consub, cargo vessel M/V Assil had a distinctly “salty EFTs would sideline the U.S. dollar-based as if it were inviting maritime participants into flavor” thereby bringing it within the Court’s international banking transfer system for the overtime, expressly stated that the Court did admiralty jurisdiction. After finding the MoA remainder of the game. While other serious “not reach today the question of whether funds to be a maritime contract Judge Sheindlin de- issues plague the U.S. banking system, the ma- involved in an EFT en route to a defendant nied defendant’s request to vacate an order of jor clearing house banks seem to have adapted are subject to attachment.” Therefore, in the attachment pursuant to Rule B. While this to EFT attachments and appear to be better specific case where electronic funds en route to case no doubt offers supports for broad in- equipped now, than ever before, to handle the a defendant are attached as they pass through terpretation of vessel sale contracts, the MoA daily flow of Rule B writs of attachments. a New York based intermediary bank, the law at issue did involve an existing vessel and the In light of the most recent Second Circuit is somewhat unsettled. However, it seems MoA required that the seller of the vessel make decision in Consub Delaware LLC v. Schahin very likely that should this particular scenario certain repairs prior to delivery. Whether or Engenharia Limitada (Decided September 23, make its way to the Second Circuit, the result not a similarly expansive view will be taken in 2008), owners, charterers, P&I clubs and mar- will most probably be that these funds are sub- a case purely involving a vessel sale agreement itime lawyers can be fairly certain that Rule B ject to Rule B attachment as well. (with no repair requirements) is unknown. attachment of EFTs in the hands of intermedi- ary banks will continue to be an effective way The playing field widens Secrets and promises no longer enjoy of obtaining security for a maritime claim into This summer season brought good news to safe harbor from Rule B Attachment the foreseeable future. In Consub, defendant claimants seeking to obtain security for dam- Another example is found in the recent Sec- Shahin issued a wire transfer order directing ages arising from maritime contracts and mar- ond Circuit decision in Williamson v. Recov- its bank in Brazil to transfer funds to a third- itime ventures gone bad. One of the predicates ery Limited Partnership, decided August 22, party’s U.S. dollar-denominated account at for obtaining a Rule B attachment is that the 2008. This Circuit case involved non-compete a bank in Switzerland. The funds of defend- claim must be maritime in nature, often re- agreements and non-disclosure agreements ant Shahin were “frozen” as they passed from ferred to as a maritime claim. Courts in the whereby hired treasure hunters in exchange for Shahin’s originating bank in Brazil through an U.S. have struggled for decades to attempt to a portion of any proceeds from recovered gold intermediary bank in New York enroute to the neatly categorize maritime claims – both in and silver, promised not to work on waters sur- final destination in Switzerland. tort and contract. Unfortunately however, case rounding the potential treasure site, promised Relying primarily upon a quote from the law regarding what is or isn’t a maritime claim not to disclose the whereabouts of the treas- decision of the Second Circuit in the Aqua has been quite varied, and is often at odds with ure hunting operations, and promised not to Stoli case, defendant Shahin, the originator what one might normally expect to be a mari- compete in the endeavor. The Circuit Court, of the funds transfer, argued that “funds in time claim. Indeed, before I became a mari- relying on the Supreme Court decision in Nor- transit are not ‘property’ within the meaning time lawyer, I would have confidently argued folk Southern Railway Company v. James N. of Rule B…” Remember, in Aqua Stoli, the (to those who would listen) that a contract Kirby Pty, Ltd., 543 U.S. 14 (2004), found the Court stated, “[t]he correctness of our deci- to build a ship was a maritime contract that proper inquiry is “whether the principal objec- sion in Winter Storm seems open to question.” would most certainly give rise to a maritime tive of a contract is maritime commerce…” In Therefore, there had been a degree of uncer- claim. I would have been gravely mistaken. doing so, the Circuit Court concluded that the tainty amongst judges, lawyers and industry Counter-intuitively, a contract to build a ship non-compete and non-disclosure agreements players generally concerning the Second Cir- under U.S. law is not a maritime contract at “were by their terms entered into in connec- cuit’s view on whether EFTs in the hands of an least for the purpose of establishing a maritime tion with a maritime commercial venture intermediary bank were attachable “property” claim. and therefore maritime in nature.” Based on pursuant to Rule B. There have been several recent judicial the holding in Williamson, future potential decisions involving Rule B attachment broad- Rule B claimants may successfully argue any Funds from a defendant, fair game. ening the scope of the traditional notion of “maritime commercial venture” gives rise to a Funds to a defendant, subject to review maritime contracts (i.e. charter party, vessel maritime claim which can be secured through The defendant Schahin, in support of its po- management contract, salvage contract, con- Rule B attachment. sition that a writ of attachment seizing EFTs tract for the supply of necessaries, etc.). should be vacated, argued that the ability to 9 continued on page 33

32 The Swedish Club Letter 3–2008 FD&D News from Asia / New Members / Basic Facts

The tide will turn one day   The Hong Kong Government has just announced by misrepresenting products. One of the banks which sold that it will guarantee all the deposits in Hong Kong Leman's mini-bonds just announced that about 80 per banks, amounting to HK$5 trillion, following the exam- cent of Leman's products now has zero value. The remain- ple of many European governments. This is obviously good ing part may be worth less than 10 per cent of its original news in helping calm the nerves of many depositors. Just investments. It is reported that over 40,000 Hong Kong few days ago thousands of customers of one of the local residents had bought Leman’s products, to an amount ex- News banks queued up to withdraw their deposits amid rumors ceeding HK$ 20 billion. The Hong Kong Government has on the internet that the bank had problems, due to deals demanded that the banks make their position clear, if they from relating to investment products from the United States. agree to buy back these products at current market values Asia The rumors were false. The man spreading the rumors was during the last week in October. quickly arrested by the police. Although the situation has stabilized with regard to It appears that no banks in Hong Kong which oper- the local banks, the stock market continues to fall. Hong ate retail businesses are unduly exposed to the financial Kong’s stock market index, The Hang Seng Index has turmoil in the United States. The credit crunch has taken dropped from a high of over 31,000 points in 2007 to low its toll in Hong Kong due to the bankruptcy of Leman at 11,000 in October, a fall of about 65 per cent. The Fi- Brothers. The victims of Leman Brothers’ so called “mini- nancial Secretary of Hong Kong predicts that Hong Kong’s bonds” have made a few protests in the streets and in front real economy will suffer most next year. Yet the worst is still of government buildings. The Hong Kong Government to come. The economy goes in cycles and will continue tried to intervene. One of the proposals is that the banks evolve. The tide will turn one day.  which sold these mini-bonds to their customers have to buy back these instruments, bills or notes etc. so that the investors can get part of their money back quickly to avoid protracted liquidation process. It is said that many of these Ruizong Wang investors may recover 60 per cent to 70 per cent of their Managing Director original capital. Allegations were made against the banks The Swedish Club Hong Kong Ltd. that clerks unduly influenced their customers to make deals

continued from page 32 9 Day trading FFA’s one day, defending New Members

against Rule B Attachment the next 1 June – 30 October 2008 Disclosing information with a “Salty Though most judicial activity concerning Dianik Bross Shipping Corporation S.A. Flavor” may subject you to Rule B At- Freight Forward Agreements (“FFA’s”) oc- Greece tachment curred last season, a string of opinions in the P&I, FD&D The recent District Court case in Blake Ma- Southern District of New York provide a well- Tianjin Marine Shipping rine Group, Inc. v. Tubbs Marine & Energy, founded basis upon which a party can seek se- China 08 Civ. 6600 (S.D.N.Y. July 24, 2008) fur- curity by Rule B attach for breach of an FFA. P&I ther evidences a willingness of Distrist Court Like the cases above, an FFA is now firmly Judges to expand the traditional limitations of considered to be a maritime contract. Perhaps Reeederei Gebr. Winter GmbH & Co KG maritime contracts. In Blake Marine Group, just in time, as the players in the FFA markets Germany Inc. plaintiff obtained a writ of attachment have no doubt been rattled by the recent dry P&I under Rule B to secure a claim arising from bulk rate fluctuations. Parties shorted as a re- a confidentiality agreement. The confidenti- sult of FFA breaches may now act to quickly Basic Facts ality agreement related to maritime services secure their claims through the process of Rule per 1 November 2008 and information provided by Blake Marine to B attachment. defendant associated with defendant’s search Proctection & Indemnity for potential suitable marine equipment. Blake Concluding remarks (including Charterer’s Liability) inspected potential equipment and provided This article is intended solely to provide a Number of Vessels Entered 1,317 an evaluation as to the suitability of such general overview of the recent history relating Average Age 10.8 GT (million) 39.8 equipment for defendant’s intended use. Blake to attachment of ETFs pursuant to Rule B. Marine Group, Inc. illustrates the ability of a Because of the sheer volume of Rule B cases Freight Demurrage & Defence Rule B claimant to obtain an extremely broad decided in the Southern District and the large Number of Vessels Entered 668 writ of attachment through a well plead veri- numbers of Judges making those decisions, Average Age 9.5 GT (million) 24.1 fied complaint. In Blake, the District Judge the law on this issue is in flux. For the time issued a writ authorizing the attachment of not being however, EFTs in the hands of interme- Hull & Machinery only the funds of defendant Tubbs Marine and diary banks are considered “property” subject Number of Vessels Entered 1,490 Energy, but the funds of an unrelated party Average Age 11.2 to Rule B attachment. Reportedly the average GT (million) 58.7 who had, in the past, advanced funds on be- daily volume of Fedwire funds transfers is ap- half of defendant to other third parties for the proximately $1.1 trillion – does this make you Loss of Hire purpose of acquiring marine equipment. want to get in the Game? Number of Vessels Entered 449  Average Age 9.0 GT (million) 19.3

33 The Swedish Club Letter 3–2008 Club Information P hoto : C S ostamare

American C hipping SA, G o SA,

Liberty ship reece becomes Greek

Arthur M Huddell renamed Hellas Liberty. Arthur M Huddell was one of 2,751 liberty During World War II, US troops were of- class ships built during World War II. After ten carried to Europe in Liberty ships. There, Carola Weidenholm the war, most of them were sold and several they fought alongside the Greek forces against formed the new basis of Greek merchant ship- the Italians and Germans, who occupied Corporate Communications ping, which today ranks among the largest in Greece. In 1944 the Huddell was converted the world. Today only two more vessels re- into a pipe-layer and laid fuel lines across the main: John Brown in Baltimore and Jeremiah English Channel in the wake of the D-Day   On 1 July one of the world’s last remain- O’Brien in San Francisco; which both serve as landings in France. ing Liberty ships – Arthur M Huddell – was US based Liberty ship museums. “This vessel is a great reminder to our fu- donated to Greece by the American govern- ture generations of the importance of the ma- ment. The vessel has now been released from First vessels in line production rine business and of the special relationship the “Ghost Fleet” in James River and delivered The Liberty ships were built in US shipyards these ships tied between Greece and the US,” to the Hellenic Republic and renamed Hellas in the 1940s. They were the first vessels to says Vassilis C. Constantakopoulos one of the Liberty. Late this year she left a shipyard in be built using production line methods with contributors who made the restoration of the Norfolk, Virginia for the transatlantic cross- a ship being constructed from keel laying to ship possible. ing to Greece. On arrival, Hellas Liberty is delivery in just over 4 days. Respecting the re- In recognition of the importance of Greek expected to spend some additional months for alities of war, they were designed for a single shipping, The Swedish Club has decided to finishing restorations, before she can serve as a voyage, yet they proved remarkably solid, with sponsor the project by means of providing the floating museum for everyone to board. many trading well past 30 years of age. necessary insurances.  P hoto Arthur M Huddell in dates and numbers : C S ostamare Named after: President of the Lightweight draft: 7.8 International Union of Steam and Lightweight

C hipping Operating Engineers (IUSOE) displacement: 3,486 Built: 1943 Lightweight immersion: 41.0

SA, G o SA, Shipyard: Saint Johns SB (Jackson- Acquisition: 25 September 1945 ville, Florida) Entry: 25 September 25 1945 reece Marad design: EC2-S-C1 Region: Atlantic Type: Break Bulk Fleet site: JRRF, James River VA Gross tonnage: 7,176 Net tonnage: 4,380 Disposition Length: 442.0 1 July 2008 Beam: 57.0 Method: Congressional Donation Summer displacement: 14,100 New owner: Greece Summer deadweight: 10,114 Remarks: Ship donated to Greece Summer immersion: 49.0 as a memorial ship on this date

34 The Swedish Club Letter 3–2008 Out and About

Naming ceremony of the container ship Argolikos in July 2008   It was a historic moment when Dioryx Maritime Corpo- ration took delivery of the first vessel built by the new Hanjin Heavy Industry & Construction shipyard in the Philippines. The shipyard was established at Subic Bay Freeport in early 2006. Even before ground breaking, the yard had accepted 12 container vessels. There is a huge investment plan up until 2016 and the yard will be geared to build VLCC, LNGC and off- shore plants. The Argolikos, the first of a series of six sisterships, is named after a small gulf located at the east coast of the Peloponnese, Greece, opening to the Aegean Sea. Dioryx Maritime is an old company that emerged from the P

hotos From left to right: Papadimitriou family who originates from Mr. Dimitri the Aegean island Kassos. The founding Vessels particulars: : T

he S Papadimitriou, Mr Container vessel company was established by the grandfa- C wedish Nicholas ther of the present Chairman Mr. Dimitri 4,360 TEUs Papadimitriou, 52,513 DWT Mrs Deppy Papadimitriou, in Port Said, Egypt, at the lub turn of the last century. In 1960, the com- 40,560 GRT Papadimitriou , Class BV H.E. Gloria Maca- pany was moved to Athens. pagal Arroyo, To mark the historic moment with the Mr. N.H. Cho first newbuilding from the yard, the president of the Philippines (Chairman of H.E. Gloria Macapagal Arroyo was the God Mother. HHIC) and Mrs. The Argolikos is covered with The Swedish Club for Hull Cho. & Machinery. P hoto

: HARREN & PARTNER : HARREN Sailing with Athena  This summer I once again had the profound pleasure of spending some days on board the majestically beauti- ful sailing yacht Athena of Bremen, which belongs to our member Harren & Partner, or more accurately the owner himself Mr Peter Harren. On 3 August we set sail from Arendal, Norway for Skagen, Denmark. Wind and seas were rather rough, but the Managing Director of Harren & Partner, Mr Peter Grönwoldt, took both ship and crew safely to berth at Skagen. This leg took around 12 hours. At Skagen we got stuck for two nights due to a heavy storm. As a crew we got on very well with each other, and to that end we managed quite well to endure two nights in Skagen, even though it was obviously a real hardship. On Tuesday 5th of August the Athena again set sail and we headed for Göteborg in Sweden. We made good speed and we had favourable winds. Even though the storm had passed us, we were very much reminded of it in terms of some rather big waves. We arrived safely at the Göteborg Opera house at 19:30 hrs. where we berthed the Athena. Following this leg, which took 7 hours, the crew, other members and some staff from our office enjoyed a very pleasant dinner. The following day the Athena left Göteborg for her onward journey, making her way south towards her final destina- tion in Germany. Lars A. Malm Director, Risk & Operation

35 The Swedish Club Letter 3–2008 Club Information

Staff kick-off Steering towards the future   It was an uplifting event in many ways the subject of the importance of detail. “If we of our history and a direction for the future”, when The Swedish Club gathered all of its all consider what we can do better, more effi- Christer pointed out. But we can’t neglect the Göteborg staff for the annual kick-off. The ciently, and implement even small changes to desire and need always to progress, both as in- trip in miles was not long, but the journey in follow through, then the accumulated change dividuals and as an organisation, in order to the mind on the other hand reached further. will be vast and really make a difference to our keep up with the changes in the market”. The 29th of August 2008 marked a start for organisation and therefore for our members.” the course to be “sailed” with new MD Lars Lars continued by drawing a parallel with the Committed people are reliable Rhodin at the helm. helm of a ship. “One makes small shifts and and proactive The kick-off was held in the vicinity of can barely see any difference but further down The core values of an organisation must be Göteborg at Sankt Jörgen Park Resort, where the line they send the vessel on a very different owned by top management and made clear to the day began with a healthy breakfast, fol- course.” all the staff The Swedish Club has three de- lowed by an overview in pictures and music of Christer Olsson, a widely known consult- fined core values : proactive, committed and re- the long history of The Swedish Club. ant on interpersonal communication and a liable. They form a unique foundation for our coach for several Swedish captains of industry, work and our contacts with the market. Lars How to make a difference was also involved in the morning session. He Rhodin explained: “We do not merely offer an Lars linked the history of the Club to the accentuated the significance of continuity for insurance product to members. We offer a great present, and to the future. He elaborated on a company and its staff. “That gives us a sense deal of added value through efficiency and in-

Swedish Club staff gathered for the annual staff kick-off. Christer Olsson, a widely known consultant on interpersonal communica- tion attended the morning session.

36 The Swedish Club Letter 3–2008 Club Information

Lars Rhodin, the new managing director at the helm. house competence in our casualty response jectives, and asked all present to reflect on values of the club influence the work of the and claims management, as well as in our loss what they might mean in terms of individual various departments. This part of the day prevention strategies, including the Maritime and departmental goals. “This is a process on contained presentations on a lighter note and Resource Management programme.” He fur- which we in management will continue to fo- revealed hidden talents, yet with a serious un- ther stressed that the aim going forward is to cus, to ensure we reach our goals within the derlying message – how can we improve in all deliver the same high quality, but smarter and timelines defined. We need to be aware of the areas. more efficiently, which eventually will be of costs involved in our operation and to address During the last part of the afternoon each benefit to members as well. areas which can be improved. And, we must staff member had a choice of various physi- C h r i s ter Ol s s on u nderl i ne d t h i s by i l lu s t r at- get better at making our added values more cal activities at the Spa of Sankt Jörgen. They ing how the world is becoming more complex visible to members and potential members”, were offered an opportunity to relax and at the and purchasing behaviour therefore changes. Lars added. same time reflect on the day’s topics. The day “It is impossible to be an expert in every area ended with a dinner and entertainment which important to our decision making. We want to In the heads of managers were widely appreciated and there is only one be able to associate trust with the knowledge of After lunch, all the departmental managers conclusion to be drawn from the kick off – our the person with whom we do business and the took the stage, one by one. In a very personal members are our only yardstick, the way they organisation behind that person.” way they presented themselves and their views value our services drives the success of the Lars presented the overall Goals and Ob- of opportunities, priorities and how the core club.  P hotos : T he S C wedish lub

The staff was offered to participate in various physical activities during the afternoon.

37 The Swedish Club Letter 3–2008 Staff News / Public Holidays

staff news

Henric Gard, joined the Club as Director, Market- Bjarne Koitrand, Underwriter, resigned from the ing & Business Development on 29 September 2008. Club on 30 August 2008 after one and a half years of For the last 15 years Henric has held various positions dedicated services to the Club. We wish him all the within the Willis Group - most recently as Executive best in his future career. Director, Willis Global Energy, Region Europe, where he focused on strategic marketing and business de- velopment.

John D. Owen, joined the Club’s Piraeus office on 22 Bryn Roughsedge, Credit Control, retired on 4 July September 2008 as Senior Claims Manager. He is a 2008 after more than 23 years of dedicated services Master Mariner and a CEDR accredited mediator and to the Club. We wish him all the best in the future has 16 years’ experience at sea. Prior to joining the and a happy retirement. Club, John served as Senior Claims Executive with the North of England for almost 18 years.

Kristoffer Lindqvist, joined Team Göteborg III as Petra Setterberg, has been appointed Team Assistant Assistant Claims Executive on a one year trainee- in Team Göteborg III as from 1 September 2008. ship as from 13 October 2008. Kristoffer has studied maritime law in Southampton and at the University of Lund, Sweden.

Annica Börjesson, Claims Executive, resigned from Carola Weidenholm, has accepted permanent em- the Club on 8 December 2008 after more than four ployment and been appointed Graphic Designer & years of dedicated services to the Club. We wish her Copywriter in the Marketing & Business Develop- all the best in her future career. ment department as from 1 September 2008.

PUBLIC Holidays when The Swedish Club offices are closed November 2008 – February 2009

Head office Sweden Hong Kong Emergency tel +46 31 151 328 Emergency tel +852 2598 6464 December 24th – 26th 2008 Christmas Holidays December 25th – 26th 2008 Christmas Holidays December 31st 2008 New Year’s Eve January 1st 2009 Western New Year January 1st 2009 New Year’s Day January 26th - 28th 2009 Chinese New Year January 6th 2009 Epiphany

Japan Greece 24 hour tel +81 3 5442 5466 Emergency tel +30 6944 530 856 December 23rd 2008 The Emperor’s Birthday December 6th 2008 St Nicholas Day January 1st 2009 New Year’s Day December 24th – 26th 2008 Christmas Holidays January 12th 2009 Coming of Age Day December 31st 2008 New Year’s Eve February 11th 2009 National Foundation Day January 1st 2009 New Year’s Day January 6th 2009 Epiphany March 2nd 2009 Ash Monday

38 The Swedish Club Letter 3–2008 Historical corner P hoto : M M aritime useum , Gö teborg

Today The Seamen’s House serves as a hostel for tourists visiting Göteborg. The Swedish Club Medical Centre 1945-1955   Tuberculosis swept through both sailors and general and a cashier. The location was the best possible: The population in the first half of the 20th century. That was Seamen’s House next to the harbour, which made it easy a major reason why The Swedish Shipowners Association to reach for all the sailors signing on and off ships in the as early as 1929 requested members to have their sailors city of Göteborg. medically examined before sign- The Seamen’s House was ing on to a ship. primarily intended to serve ship- Following the Royal Consti- ping companies associated with tution issued on May 22nd 1925 a Carola Weidenholm the Club, but sailors from other doctor’s certificate was required companies also frequented the Corporate Communications to acquire engagement on a ship centre. The examinations were operating outside Sweden, parts more thorough than those re- of Norway and parts of Denmark. At this time the sea- quired by law which resulted in a general improvement men were directed to dedicated doctors appointed by of the seamen’s health. At the same time the shipping the association. But at the beginning of the 1940s Einar companies reduced their medical costs and the environ- Lange, MD of The Swedish Club, initiated an investiga- ment on the ships became healthier. tion which concluded that it would be beneficial to start Some members suggested closing down the health our own medical centre. That would enable both com- centre at a board meeting in 1952. Two years later The pulsory and regular examinations of every person who Hospital Board suggested that the city of Göteborg take was signed on to a ship insured by the Club. over the operation. That was approved by the Finance The end of the Second World War in 1945 brought Department of the city and by the Executive Board, and the establishment of The Swedish Club Medical Centre. it was carried through in 1955. Doctor Erik Werner and Doctor Hans-Stephan Radscha  Aminoff were engaged together with four nurses, a clerk

39 CLUB CALENDAR

2008 2 December 2008 Christmas dinner for members and associates on Donsö

4 December 2008 Board Meeting in London

8 December 2008 Winter lunch for members and associates in Göteborg

11 December 2008 Christmas dinner for members and associates in Greece

2009 11-15 May 2009 Marine Insurance Course in Göteborg

4 June 2009 Annual General Meeting in Göteborg

40