Shiparrested.com Issue 30

Shiparrested.com Issue 30

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Shiparrested.com Issue 30

Discloser of IMO's Marine Incident Reports in Arbitral/Court's Proceedings

IMO's publications on report of marine incidents investigations which are published under the topic "lessons learned"[1] regularly include a "why did it happen" highlights such as "lack of a detailed passage plane", "lack of knowledge or understanding of the limitation of the anchoring system". However, the reports themselves are not published. Can or Should these reports be disclosed in legal or arbitral proceedings taking place between owners and cargo receivers or others? Do cargo receivers have a right of standing to demand the reports and on which grounds?  In this article we will present these topics and the importance of the Haifa District Court decision in these regards, handed in relation to the marine incident of the M/V Diana.

The Voyage

M/V Diana departed Dunkerque port on 2nd January 2018 carrying cargos of steel coils intended to Israeli receivers and Turkish receivers. On the following day while navigating through the British Canal heading west, according to the AIS records, the vessel seemed to have navigating in an unclear way and lost its speed to one knot only. On 9th January 2018 the vessels called at Gibraltar Port and after departed towards Haifa Port. On 16th January 2018 it arrived at Haifa port and released right anchor. On 18th January, while due to expected adverse weather conditions, most of the vessel which called at Haifa port navigated towards west in order to get away from the Haifa Bay shore which is at east, the M/V Diana remained in its position.

The Marine Incident

During the period began at 18 January 2018 at 13:50 and until 19th January at 16:10 the vessel started drifting towards east, lost its speed to one knot only, suffered from continued engine shut down, while confronting the adverse weather. Eventually, at 16:10 the vessels' Master advised Haifa Port's RCC that the vessel has touched the ground and called for assistance. The vessel was finally stopped about 250 meters from Haifa shore, where the depth of the water was 4 meters only.

As a result of the vessel's grounding, sea water penetrated the cargo holds, oil pipe lines were damaged and the steel coils were contaminated with mixtures of chlorides and oil. The vessel remained "stuck" at its above-mentioned position for few days. The steel coil cargos were discharged from the vessel by barges, and thereafter the vessel was towed to a platform at Haifa Port and went under required operations and preparations to make it fit to be towed to a shipyard in Turkey.

Owners' and Cargo Receivers mutual claims

Owners have declared "General Average" and following a claim in rem and arrest application filed by the Turkish cargo receivers and underwriters, on 16th February 2018 the Haifa Maritime Court has arrested the vessel. Up to that date, a claim and arrest on behalf of the Israeli cargo receivers which was filed on 1st February 2018 was pending, but on 15th February 2018 this claim was settled with the Owners and the arrest order issued on 1st February in their claim, was set aside.

The Owner's club provided a LOU securing the Turkish cargo receivers and underwriters claim (claimed amount US$ 3.8 M). Accordingly, the arrest order was lifted and the vessel went under final preparations for departing Haifa port by towage.


[1]  For example: http://www.imo.org/en/OurWork/MSAS/Casualties/Pages/Lessons-learned.aspx

The Administrations Investigation

Following Articles 99 and 100 of the Israeli regulation of Ports Safety (Vessels), 1982 and the IMO's Code for The Investigation of Marine Casualties and Incidents[2][3], The Israeli Shipping and Ports Administration of the Ministry of Transportation (the "Administration") conducted an investigation of the incident. The Administration's officials took statements form the chief engineer and master, viewed the RCC communication and documents, and at the end of the process, issued a Report detailing on the sequence of events and causes of the incident having the statements, communication and other documents annexed.

The Application for the examination of the Chief Engineer:

Meanwhile, prior to the expected departure to the vessel, the Turkish cargo receivers and their underwriters filed an Application asking the Haifa Maritime Court, following Article 96 of the Admiralty Court rules to summon the chief engineer for an examination, before he would leave the country with the vessel and most likely would disappear and will not attend to Court/Arbitration when the Hearings will take place. The Owners objected the Application, arguing, inter alia, that the Israeli Shipping and Port's Administration (of the Israeli Ministry of Transportation) have probably conducted an Investigation and surely that the claimants will require the Authority's Report which could evidence on the facts related to the incident. Eventually the Court held that the Chief Engineer will answer in a written statement to the questions referred by the Claimants and will not go under an examination before the Court at this stage. On 18th February 2018 a written statement on behalf of the chief engineer was provided. On the following day, 19th February, the vessel departed Haifa Port by towage. Due to an arbitration clause incorporated in the bills of lading the matter was referred to London Arbitration.


[2]  International Maritime Organization, CODE FOR THE INVESTIGATION OF MARINE CASUALTIES AND INCIDENTS, Resolution A. 849 (20). Adopted on 27 November 1997, (the "Code").
According to IMO's publications, ://www.imo.org/en/OurWork/MSAS/Casualties/Pages/Default.aspx,  the Code amalgamated and expanded The individual resolutions relating to each local administrations' liability to conduct investigations into casualties occurring to ships such as  SOLAS regulation I/21 and MARPOL articles 8 and 12,  or the United Nations Convention on the Law of the Sea (UNCLOS), article 94 paragraph 7: " Each State shall cause an inquiry to be held by or before a suitably qualified person or persons into every marine casualty or incident of navigation on the high seas involving a ship flying its flag and causing loss of life or serious injury to nationals of another State or serious damage to ships or installations of another State or to the marine environment. The flag State and the other State shall co-operate in the conduct of any inquiry held by that other State into any such marine casualty or incident of navigation."
Resolution A.884(21) on Amendments to the Code, adopted in November 1999, provided guidelines for the investigation of human factors.
[3] According to the Code "Marine Casualty" includes, inter alia, "loss or abandonment of a ship", "material damage to a ship". "Serious Marine Casualty" means a casualty which involves "structural damage rendering the ship unseaworthy, such as penetration of the hull underwater…", or "a break down necessitating towage or shore assistance".
"Marine Incident" means, "an occurrence being caused by, or in connection with, the operation of a ship by which the ship or any person is imperiled, or as a result of which serious damage to the ship or structure or the environment might be caused".

The Application for discloser of the Report under the Freedom of Information Act

Under the above background, Turkish cargo receivers and underwriters through their local attorney applied to the head of the Freedom of Information department at the Authority and asked for a copy of the Report in order to make a use of it in the arbitral proceedings taking place in London.

Following Owner's objection to have the Report enclosed as required, the Authority released only a blanked copy of the Report (meaning a copy of the report which parts of it were blanked in black) without any of is annexes, which included, inter alia the written records of the RCC communication which took place between the vessel and Haifa Port RCC through the above mentioned period of 18-19th January 2018 and the statements of the RCC operators.

The Petition before the Haifa District Court

The Turkish Cargo Receivers and their Underwriters filled a petition before the Haifa Maritime Court asking him to order the Authority to disclose the Report in full (removing the blanked parts) and its annexes (the "Application"). The Application was grounded both on the Israeli Freedom of Information Act -1998 and Arbitration Act- 1968. The Respondents to the Petition were the Administration and Owners. After Court's Hearing and fooling Court's observations, the Turkish Cargo Receivers and Underwriters have narrowed the Application to the discloser of the RCC communications and RCC's operators statements, having all the rights reserved to apply for a full discloser of the Report following and according to the discloser of documents and arbitral decisions in regards to the Report as will be decided in future to come in the Arbitration which did not reach yet the discloser of documents and summon of witnesses and documents, at that stage.

The Haifa District Court's decision acknowledging the Cargo Receivers right of standing

Under the above-mentioned background, the Haifa District Court decided on the Application. One of the main issued and principles dealt by the Court, was, if a foreign claimant has a "right of standing" to receive information following the Freedom of Information Act. Clause 1 of the Act declares that "any Israeli citizen or resident has the right to receive information from a public authority", which indicates, that allegedly the right for information is granted only to an Israeli citizen or residence. However, Clause 12 of the Act orders that: "The orders of this Act will apply also to an information petitioner which is not an Israeli citizen or resident in relation to information about its rights in Israel." Accordingly, the Court has examined if the Turkish cargo receivers and the underwriters can be considered as "having rights in Israel". The Court held, that the expression "about its rights in Israel" should be interpreted in width and should include not only personal information collected by the authorities, but also the information about a foreigner's assets in Israel or assets he had in Israel at time of collecting the information, and should include information related to entitlements and claimable entitlements  related to the period when the foreigner was in Israel or information collected in relation to a claim related to its assets, when he was in Israel.

At the current matter, the Court held, that the required information was collected in Israel in relation to a marine incident which took place in the Israeli territorial waters at Haifa Port. The collected information is about the reasons to the damage caused to M/V Diana and the steel coils carried by the M/V Diana, meaning the Applicant's assets.

The information is about the Applicants claimable rights which arose in Israel in relation to an incident which took place in Israel. The Court also mentioned that the claim in rem and arrest proceedings took place in Israel and that there is no doubt that the Israeli Courts have authority to hear the claim and that only due to an arbitration clause the claim is heard at London. Obviously, if the claim would have been handled before an Israeli Court, the Applicants  would have the standing to require from the Administration the collected information which is required for the execution of their claimed rights (subject to the exceptions by Law), and the fact that the transfer of the proceedings to London should not derogate form their rights to obtain the  collected information which is required to materialize their rights which arose in Israel.

The Court also added, that, the right to receive information can be established by other fields of law and also information which is not listed as in the Freedom of Information Act as a compulsory information, can be obtained.

Court's rejection of the Administrations' and Owner's objections

After establishing the Applicants right of standing, the Court has rejected the Administration objection to disclose the RCC communication and statements which was based on the Administration's argument, that, in order to achieve future co-operations in the future to come investigations of marine incidents, the information should not be disclosed. The Court held, that, he does not see how the discloser of communications which took place on real time with a distressed vessel, which are recorded by routine – regardless to an existence or non -existence of a future to come investigation, will disrupt the Administration's investigations.

On the contrary, the Court held, that the discloser of the full information on a marine incident will help vessel's crew and personal to learn about the circumstances of the incident and how to avoid such marine incidents, in the future to come.

The Court also denied Owners objection to disclose the RCC communications and held, that he does not find any reasons why the discloser would cause damage to the crew or to Owners. After viewing the communication and asserting that they do not include and personal private information of either the crew or the RCC operator, the Court held that the RCC communication and RCC operators' statements will be disclosed and made order of costs ordering both the Administration and Owners to pay the Applicants costs.

Observations:

It should be mentioned that under the Israeli Arbitration Act, clauses 13, 16 and 39, the Courts are authorized to provide assisting orders such ad summon of witnesses to an arbitration and/or to enforce such orders issued by an Arbitrator. These authorities apply also to an arbitration taking place abroad.

Accordingly, an Arbitral award ordering on the discloser of documents and information held by an Israeli authority can be enforced by an Israeli Court. According to clause 13 (c) of the Israeli Arbitration such an Authority has the right to oppose to such an order, and the Court will have to decide on such an objection.

The Haifa District Court's decision, which was handed by the Haifa Maritime Court Judge, the vice president the honorable Judge Mr. Ron Sokol is a clear recognition in cargo receivers or others who suffered losses and damages  as a result of a marine incident rights to receive information collected by an authorized authority while conducting an investigation and issuing an report on the reasons which cause the incident.

The manner in which this right of standing would be materialized and confronted by objections and exception on behalf of the authorities and owners, should be followed in the future to come.

Folio No. 67484-03-19 HDI GLOBAL ANTWERP and Others Vs. State of Israel and Owners of the M/V Diana, Haifa District Court.
For the Applicants: Adv. Yoav Harris of Harris & Co.; For the State of Israel- Adv. Suzan Muklad of the District Attorney Office; for the Owners of M/V Diana- Adv. Roi Cohen of S. Freidman & Co.

Yoav Harris, Adv.
Harris & Co. Maritime Law Office

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