Anglo-Eastern Group seminar on 19-11-2007.

Paper presented by:

S. VENKITESWARAN

Senior Advocate

MEDICAL PROBLEMS OF SEAFARERS

Over the last century, through experience, the multifarious medical problems that dog the seafarers have come to light. I am not dealing in this paper with different types of injuries that are sustained during the operation of the ships, but relate only to illnesses. One of the age-old causes for medical problems at sea is the ignorance of those who venture to sea and their reluctance to appreciate the need for a thorough medical check up before venturing into sea initially, and from time to time. Followed by this, are the problems of deliberate or active suppression of existing problems while undertaking a voyage. The next, of course, is the anxiety to get into a ship with a lucrative job. Unfortunately, the concerned person sacrifices the need to protect oneself, in the lure of the job.

Any amount of advances in the science of medicine and new techniques in pathological analyses would not help 100%, unless the doctor gets true and voluntary cooperation fully from the seafarer. One of the old and perennial problems that harms seafarers is bronchial asthma, which indeed is an allergy. Any doctor would say that this requires as dry a climate as possible, unlike the humid and vastly different types of weather to which a seafarer is exposed. I have come across instances where patients, who have experienced very mild asthma, reach a stage of almost incapacitation and death, on account of aggravation due to sea passage.

The next most common ailment is tuberculosis.

I will explain to you the problem that a ship-owner and a P&I Club faced with an officer suffering from tuberculosis. Due to extreme loss of weight and tiredness, the officer was admitted to a hospital in a port city in the USA, in the State of California. What the seafarer contracted was a communicable form of tuberculosis and, under American law, the patient could not be permitted to travel in a public transport or aircraft. He was not medically fit enough to be shifted. The alternative for the ship-owner was either to keep the patient permanently for life in a hospital in California or, in the alternative, charter an aircraft for transportation. Air ambulances were not well-known then. Chartering an aircraft with medical precaution and necessary permissions from the US and Indian authorities took almost an year. If the officer had only disclosed his real medical condition in the immediate past, before he boarded the vessel in India for the first time, he probably may have continued to live with good health and a shore job, rather than going to the jaws of death.

A coronary or cerebral stroke can always attack any healthy person without any warning, irrespective of age, etc. However, at least in 60% of the cases, these problems, existing in the body, manifest in different forms. An appropriate analysis of the health condition, with cooperation of the patient, can certainly reveal conditions or grounds existing for such problems. One sees many young and healthy men either been permanently incapacitated or losing their lives due to strokes, which could have been known or suspected and need not have been aggravated by going to sea.

Recently, there was a case, in which an officer developed a certain eye problem and the ultimate diagnosis was that he was likely to lose his sight in both the eyes in the next two or three years, and that there was absolutely no treatment available. No medical evidence was available as to the causes of the eye problem. Even though an attempt was made to allege that there was a leakage of some chemicals in the ship, the owners were able to obtain expert opinion that, first of all, such a chemical was never carried on board and that, in any event, there was no scientific evidence that coming in contact with such vapour would cause the eye problem.

I have come across cases of officers walking into chemical tanks and ending up being dead. In every case, an appropriate inquiry reveals that the victim did not take the laid down precautions. There are cases in which the negligence of the victim was so brash that he even failed to wear a mask.

It is important that any seafarer joining any ship, carrying cargo like chemicals, etc., should be given a thorough briefing not only by the owners / managers but by the captain also, immediately on the officer/ crew member joining the ship. I find that, notwithstanding such steps taken by owners and the Masters, when an emergency occurs, the procedure is forgotten.

I am compelled to point out that, more than physical ailments, what I am concerned with in the recent years are the psychotic disorders that ail the seafarers. One never heard, in the olden days, of ghastly murders and suicides and such kind of psychotic disorders, notwithstanding the voyage being longer than what it is today. In every forum, where I am concerned, I have been advocating that this be taken seriously, and I have also impressed upon the office of the Director General of Shipping the need for psychological analysis of the seafarers.

Instead of continuing the monologue, forcing you to listen to what we want to say, I would leave the floor for you, to ask me what you want to know.

Thanking you for patiently listening to me.

~*~

LEGAL SYSTEM PREVALENT IN INDIA FOR
PORTS

By

S. VENKITESWARAN

Senior Advocate

On the auspicious occasion of the completion of 125 years of the functioning of the Chennai Port Trust, it is time for us to look back at the experience gained in Port management, particularly in the context of privatisation.

Maritime law has completely undergone total transformation over the last 100 years all over the world. Law relating to liability was completely favourable to the ship-owners, to encourage more and more entrepreneurs to enter the shipping trade. The legal position was that shipping was always treated as a venture into unknown territory, than as a business. But the liability regime changed with the Hague and Hague Visby Rules, and now followed by the Hamburg Rules.

Similarly, in the Port sector too, at one time ships entered the Ports at their own risk, but today the Ports are open to liability in case of negligence. Today, most of the Ports obtain indemnity insurance, to protect themselves.

We, in India, have followed the British system, where the management and operation of a Port are entrusted to a Board of Trustees, consisting of various users and Port interests, save and except the Chairman and the Deputy Chairman, who are appointed from among the officers of the Indian Administrative Service (IAS). The age-old law in regard to Ports, which the British applied to the Indian Ports, continued even after independence – albeit under a legislation by the Indian Parliament, i.e. the Major Port Trusts Act, which continued to follow the same system.

To my knowledge, over the last 25 years, several proposals were brought in by different Secretaries in the Ministry of Shipping & Ports – and some of them found favour and implemented, unmindful of the legal system and without bothering to bring the legislations up-to-date.

One of the aborted proposals that was considered was constitution of an Apex Body for all the Ports. Ultimately, it was realised that, even if we had an Apex Body, matters would still go for approval to the Ministry, through the usual channel and, therefore, it was abandoned after being thrown around for almost 5 years.

In the international context, as I will demonstrate, it is absolutely essential for us to change our thinking and analyse all facts and circumstances, before coming to a conclusion on any subject. In India, we assumed that private sector is more efficient than public sector. Such critics do not care to consider the difficult circumstances under which a public sector management functions. A Port manager has not only to contend with bureaucrats in the Ministry but have also to be pleasing the political masters. Any major investment proposal requires going through several filters, with no one essentially understanding what the whole project is. A classic example is our own state-owned Shipping Corporation of India. A proposal for acquisition of ships, when the prices are low, is generally approved when the prices have doubled.

Why doesn’t the Government of India come out with a shipping policy, at least applicable for a decade, so that everyone knows where one stands? This would avoid knee-jerk reactions and the policies changing according to the mood of the Minister or the Secretary.

The next I heard was “corporatisation” of the Ports. No legislation was brought forward for this purpose, and the Government of India ventured to make Ennore Port as a limited company. The Government is treating Ennore Port as a Major Port – and if it is a Major Port, it is bound by the Major Port Trusts Act, 1963, which does not provide for a Major Port to be a limited company.

Then a decision was taken by the Ministry to take the route of Section 42 of the Major Port Trusts Act for semi-privatisation, and hence came the first P&O deal, followed by many others.

One fine day, the then Secretary thought that the terminal-operators were willing to give up large royalty to the Ports only because they are able to treat the royalty as an expense for the purpose of the TAMP arriving at the tariff. The Government promptly announced that henceforth royalty will not be treated as expenditure for the purpose of fixation of tariff. What happens to those who already entered into contracts with the Ports?

Despite the new policy, which came out of a sudden brain-wave of a Secretary, someone offered 49% royalty for the Kandla Port. Has anybody applied his mind as to why this is so?

An entrepreneur, who has all the qualifications and experience as required by the tender documents, has to invest a huge amount of money to be able to be a terminal-operator. Such an operator would necessarily have to provide a competitive tariff and efficient service, in order to be able to attract the trade. Therefore, it is not really correct to imagine that he would blindly offer unlimited royalty and increase his tariff, at the cost of expanding the business.

The bureaucrats do not apply their minds to the basic principle. If they realise that the Ports are an integral part of the country’s development and economy, they should not have left the Ports to unreasonably enrich themselves with the royalty offered by the entrepreneurs, and should have found an appropriate and effective system of privatisation.

We have the TAMP for the Major Ports, and the Government policy and guidelines say that the TAMP will permit only a certain percentage of return on capital, without permitting royalty to be treated as expenditure. Quo vadis?

It is interesting to note that the need for TAMP has ceased to have relevance, in view of the tough competition that would now develop among NSICT, Maersk, Pipavav, Mundra, Mumbai, Nhava Sheva, Kandla, Goa and Vallarpadam on the west-coast; and PSA-SICAL, Dubai Port Authority and Vishakha Terminal on the east-coast.

I implore the powers-to-be that even now it is not too late to learn from experience and improve our systems with the knowledge acquired so far, and bring our law up-to-date.

•Ő•

PAPER ON MARITIME LAW ON PIRACY AT SEA, SALVAGE, GENERAL AVERAGE AND MARINE INSURANCE.

By

S. VENKITESWARAN

Senior Advocate

As you all know, law has developed over a period of time, to meet peculiar requirements of the trade. It is in this context that Maritime Law has adopted distinct principles, due to the peculiar nature of the sea trade. Countries desired and needed to promote sea trade and encouraged their country men to set sail to the merciless and unpredictable high seas. It is in this context that Maritime Law is particularly tending to protect the ship-owners and operators, than the ones who use this facility. No doubt, with the change in technology and modernisation of ships – and the reduction of time in voyage, there has been Conventions changing the law, making it less favourable to the ship-owners.

It is in this context that I want to advert in this paper to Maritime Law, Salvage, General Average (which are unknown in any other trade), Marine Insurance and Piracy.

All of us will agree that an act of piracy in the high seas on our brothers, who risk their lives and venture into sea to help the international trade and commerce, is nothing short of international terrorism.

Piracy has been in existence as long as the legitimate Maritime Trade, though the incident would differ from locality to locality. This suggests certain circumstances or cluster of circumstances to favour piracy. The motive for piracy is financial gain and, therefore, in almost all cases of piracy, one would find that the cargo is valuable. Some pirates take ships and maritime equipment for their own use. Pirates take the wares to different markets for sale and, therefore, the pirates have to have advance knowledge of the cargo on board a ship and also have access to the place where the wares can be traded. Similarly, pirates have to be efficient seafarers. Piracy is, in effect, robbery at sea.

When we look at the recent past, by the beginning of 1983, armed attacks on merchant ships had increased to such an extent that it caused great concern to the shipping interests and the governments, which was reflected in the submission made to the UN International Maritime Organisation and the resulting Resolution to Prevent Acts of Piracy & Armed Robbery Against Shipsin 1983. Malacca Straits, South China Sea, the West African coast and the Caribbean have all been known always as the dens of piracy.

Modern pirates are extremely well-equipped that they are able to climb into a moving ship.

The International Maritime Organisation and the International Maritime Bureau have concentrated on increasing awareness and amendments of laws of the countries by Conventions; and, similarly, the ship-owners have also sought to incorporate expensive equipments on board ships, to combat piracy – but what has been done has not been enough.

Piracy Jure Gentium. This is a concept which has been recognised and remedy provided by giving rights to the states to prosecute pirates according to the criminal law of the state, as if the offence is committed in the territory of the state, even though piracy may have been committed by foreign nationals in high seas, provided the ship and pirates are brought to the jurisdiction of the state. The meaning of the maxim is that piracy is a crime against humanity.

Notwithstanding all this, you will be shocked to hear that internationally there is only one solitary case of conviction for piracy, and we Indians are proud of the fact that we were the first to use the provisions of the age-old English Law, which had been applicable to India when she was a colony, and which continues to be a law under the Constitution, not having been repealed. Foreign national pirates could be prosecuted in an Indian Court, if they are found in India, even for piracy in high seas, as if the offence is committed in the Indian territory. The case in question is M.V. Alondra Rainbow, a non-Indian flag ship. She was sailing from an Indonesian Port, with expensive aluminium cargo, to Japan, and was subjected to piracy 30 minutes after she left the Port, while doing a speed of 10 knots. The captain and the crew members were tied up for a few days, whereafter they were transferred to another ship, which sailed for a couple of days. After that, the pirates unloaded them on to a life-raft and allowed to drift in the high seas. The life-raft had water and provisions only for a few days, and all these got exhausted. The captain and the chief engineer were Japanese nationals, and the rest of the crew members were Filipinos. Out of fear, the captain appointed one of the Filipinos as head of the crew, and they all survived at sea without food and water for several days; and it was only on the 19th day they were spotted by a Thai fishing boat and rescued. The International Maritime Bureau stepped into the scene and offered a million dollars as reward for any assistance in capturing the pirates and the ship. The Indian Coast Guard spotted the ship about 200 nautical miles off Kochi, chased it for a very long time, called for help from the Coast Guard and other naval vessels and, ultimately, got the pirates to surrender themselves. On inspection of the vessel, it was found that an attempt had been made to destroy the documents by fire and also to flood the engine room through sea water cooling chest and sink the ship.

The vessel and the pirates were brought to Mumbai, where they were prosecuted. The old Master of the ship came from Japan and gave evidence before the Court in India. The Coast Guard and Naval officers also gave evidence. At the end of a long trial, 15 pirates were prosecuted and 14 of them were sentenced to rigorous imprisonment for 7 years on the charge of attempt to murder. (One of the pirates died during the trial). It turned out that some of the accused were involved in an earlier piracy incident and were arrested in China, but were released without a trial. All that I would say is that, merely because one country’s nationals are not involved and/or that the country’s property is not involved, there should not be indifference to an offence against humanity.

ƒ Salvage:

A right to salvage arises when a person is acting voluntarily (without any preexisting contractual or other legal duty to so act) to preserve or contributes to preserving at sea any vessel, cargo, freight or other recognised subject of salvage from danger; the salvage remuneration not to exceed the salved value of the property, which has been brought to a place of safety, and should be proportionate to the expenses incurred and the reward for the salvage. If an attempt to salvage by a salvor fails to succeed, he gets no remuneration, irrespective of the effort put in or expenditure incurred. Therefore, the act must be voluntary, the salvaged property must have been in danger or peril (real or apprehended) and successful salvage services are the criteria for the salvage remuneration. The salvage law has developed from about 1800 and has been subjected, depending upon the necessities from time to time, to Conventions, legal precedents and, currently, “Lloyds Standard Form” or “Lloyds Open Form”, superseded by LOF 1990, with effect from September 5, 1990.

The salvor has a right in rem and in maritime lien first in priority, than anyone else for the salvage remuneration. Anyone else who has an interest in the vessel has to stand behind the salvor, for the simple reason that the vessel would not have been available but for the effort of the salvor. In Admiralty and Maritime Law, there is an order of priority for claims, and the first in order of priority is the salvor’s claims. If there are more than one salvors, then the last in time has the first priority.

It may be mentioned here that if the salvor or his employee is negligent and causes any loss to the property being salvaged, in the ultimate analysis, the salvor can be held responsible for the said negligence. The salvor has an obligation, while performing salvage services, to prevent or minimise damage to the environment.

Under the Merchant Shipping Act, provisions have been made for salvage priority and attendant matters.

ƒ General Average:

General Average is a unique concept only in Maritime Law.

In view of the uncertainties and unknown perils of the seas, a voyage is always treated as an “adventure”, and not as a business activity. A contract of affreightment obliges the ship-owner only to incur the normal, reasonable cost that he would incur in the ordinary course in completing the voyage. However, in case of extraordinary sacrifices or expenditure voluntarily and reasonably made or incurred in time of peril, for the purpose of preserving the property in peril, in the common adventure, is called “a general average act”. A general average loss is a loss caused by or directly consequent on a general average act. It includes general average sacrifices as also general average expenditure. General average sacrifices may be made at the moment of peril, while expenditure may be incurred only after the danger is over. The ship and the cargo ought to have been in peril at the time when the extraordinary measures were adopted.

In the middle of the 19th century, attempts to obtain a uniform, international system of rules for the ascertainment of what losses are properly to be regarded as coming within the doctrine of general average, for determining the method of calculating them and to decide the manner in which they were to be borne, conferences were held at York in 1865, at which “International General Average Rules” were framed and accepted. There were teething troubles in the beginning. At the second conference, held at Antwerp, the earlier set of rules was considerably modified and somewhat extended, and a determined effort was made in England to give currency to the rules, which came to be called York-Antwerp Rules. In modern shipping contracts, York-Antwerp rules are adopted. These rules have been revised in 1890, 1924, 1950 and 1974.

The principle behind is that equitable sacrifices should be made good, and the expenses incurred repaid, by a general contribution from all those benefited by either the one or the other, in proportion to the value of the property which those sacrifices and expenses have been instrumental in saving. Thus, a general average contribution is a contribution by all parties to a maritime adventure, to make good the losses which have been sustained by one or more of their co-adventurers from sacrifices made, or expenses incurred, for the preservation of the whole.

If, in a state of imminent danger, some goods are thrown overboard to lighten a ship (“jettison”), the damage so sustained by the owner of the goods or the ship is a loss which gives him a claim to general average contribution. If the goods are washed away, the owner of the goods can only claim for the loss from the insurers, and the loss cannot be termed as general average but, in other words, a particular average.

If the loss caused is due to the fault of a claimant or his servants or agents, a claim for general average cannot be made.

Similarly, all costs, charges and expenses (including loss of hire) that a ship suffers for carrying out repairs arising out of a general average act are recoverable in proportion to the value of the cargo. For this purpose, the value of each one’s cargo and the vessel must be calculated on the day of the sacrifice, and the cost apportioned in proportion to the salved value of the cargo. One may only recover expenses strictly and directly incurred arising out of the incident.

For the purpose of apportioning expenses and sacrifices to different entities and to determine the actual expenditure relatable to the general average, the assistance of general average adjusters is used.

ƒ Marine Insurance:

Marine Insurance deals both with ship’s hull and machinery and cargo. A marine insurance contract is a contract of indemnity, to indemnify the assured against a marine loss – that is to say, the loss incident to a marine adventure. Any person who obtains a marine insurance must be clear and sure as to what is the subject matter of insurance and the insured perils. Being an indemnity insurance, the insured is only entitled to actual losses suffered and, therefore, it is not enough that the subject matter of insurance existed at the time of the incident, but the assured had an insurable interest in the property lost.

The terms of a contract of insurance are also governed by the General Contract Act. In the construction of an insurance contract, there would be warranties and consequences for the breach of it. The main object of warranties is to establish the existence of circumstances, without which the insurer would not undertake to be bound. It is a condition precedent to liability. A warranty would be expressed or implied. The general rule is that once the meaning of a warranty is ascertained, there must be exact or literal compliance.

The burden of proof is on the insurer, that there is a breach of warranty. There would be no consequence of a breach of warranty if a breach is excused. All normal warranties are relating to nationality, seaworthiness and such other matters. In order for the insurer to be excused by breach of a warranty, there must be causal connection between the breach and the incident giving rise to claim.

The insured peril must occur during the currency of the policy.

Sue and Labour

The insured has an obligation to behave as a prudent uninsured, to be able to claim under the policy and also to minimise losses. The costs, charges and expenses incurred for minimising the loss is called “sue and labour”, and this cost (reasonable) is payable in addition to the loss.

Partial loss is only a partial loss to the insured property. Total loss is where the property has ceased to be what was insured. Constructive total loss is where the insured property is not totally lost but the cost of recovering that property or putting it in original shape will equal or exceed the insured value of the property. In the case of constructive total loss, rather than actual total loss, there is an obligation on the insured to notify the insurer as soon as he realises that the property is a constructive total loss. By a notice, the right and ownership on the insured property must be abandoned by the insured in favour of the underwriters. Notwithstanding the said notice, the insurer can refuse to accept the notice of abandonment but, eventually, if the property is held to be constructive total loss, the insured will get interest on the insured amount from the date on which the notice of abandonment was given. Notice of abandonment must be given only on the basis of reasonable evidence that the ship is Constructive Total Loss (CTL).

When an insured pays the claim, the insured company subrogates all the rights that the original owner possesses. For making a claim under the policy, the assured has to essentially prove (a) that he had an insurable interest in the property, (b) that the property insured has either become a partial loss, total loss or constructive total loss. In addition to all that, what is important is that the insured has to establish that the loss was directly on account of an insured peril. The onus of proof is on the insured, who has to establish the cause of the loss. If the cause of the loss cannot be ascertained for any reason, the insured cannot claim under the policy.

In the case of “Popy M”, the House of Lords held that it was not always necessary for a trial Judge to decide “whether the loss was due to insured peril or otherwise”, but the Judge had an option to decide that he cannot determine the cause at all with the available evidence, in which event the claim is not payable.

Thank you.