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BROAD INTERPRETATION OF ‘SUBSEQUENT MODIFICATION’ APPLIES YORK-ANTWERP RULES 2016 GOVERNING GENERAL AVERAGE IN STAR AXE I LLC V ROYAL & SUN ALLIANCE

In Star Axe I LLC v Royal and Sun Alliance Luxembourg SA [2024] 1 Lloyd’s Rep 342, the court determined that the phrase “any subsequent modification” in the bills of lading extended to the York-Antwerp Rules 2016, not just amendments to the 1994 version. This broad interpretation significantly impacted the general average adjustments, applying the more modern rules outlined in the YAR 2016. The decision emphasize the importance of clear contract language when referring to evolving sets of industry rules, as it directly influences the liabilities and cost-sharing in maritime incidents.

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COURT UPHOLDS RECAP EMAIL AS BINDING CONTRACT IN MARITIME DISPUTE: PORALU MARINE V MV DIJKSGRACHT

In the recent case of Poralu Marine Australia Pty Ltd v MV Dijksgracht [2023], the Federal Court of Australia Full Court (FCAFC) ruled that a second recap email, summarizing key terms from negotiations, constituted the binding contract of carriage rather than the subsequent booking note. The court found that the recap email reflected the final agreement between the parties, while the booking note attempted to introduce new terms, including liability limits, which were not mutually agreed upon. This decision emphasizes the importance of recap emails in maritime contracts and reinforces the application of the Hague-Visby Rules in such cases.

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Undang-undang Laksamana

ONE-YEAR TIME BAR FOR MISDELIVERY CLAIMS REINFORCED BY COURT OF APPEAL IN FIMBANK PLC V KCH SHIPPING CO LTD (THE GIANT ACE) [2024]

In the recent decision of the English Court of Appeal in FIMBank plc v KCH Shipping Co Ltd (The Giant Ace) [2024], the court upheld that the one-year time bar under Article III Rule 6 of the Hague-Visby Rules, which are applicable in Malaysia under the Carriage of Goods by Sea Act 1950 (COGSA), applies to all liabilities, including claims for misdelivery of cargo, even when the misdelivery occurs after discharge. The court emphasized the broad application of the phrase “all liability whatsoever in respect of the goods”, confirming that the amended rule was designed to extend the time limit to cover such claims. This ruling underscores the need for timely legal action within the one-year period, reinforcing legal protection for carriers in both the UK and Malaysia.

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Undang-undang Laksamana

LEGAL IMPLICATIONS OF FRAUDULENT VESSEL REGISTRATION: LESSONS FROM COSCO SHIPPING HEAVY INDUSTRY V OSTA FLEET

In Cosco Shipping Heavy Industry (Dalian) Co Ltd & Anor v Osta Fleet Sdn Bhd, the court examined a vessel registration dispute involving allegations of fraudulent documentation. The Plaintiffs argued that Osta Fleet fraudulently registered the vessel “Dalian Developer” using a falsified Builder’s Certificate. The court’s forensic analysis revealed inconsistencies in the document, ultimately deeming the registration invalid under the Merchant Shipping Ordinance. The case underscores the importance of due diligence and legal safeguards in vessel registration processes.

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Recent Legal Updates

JURISDICTION – CHOOSING THE RIGHT COURT: THE SEA JUSTICE CASE HIGHLIGHTS WHERE MARITIME DISPUTES SHOULD BE HEARD

In The Sea Justice cases [2024] 2 Lloyd’s Rep 383 and [2024] 2 Lloyd’s Rep 429, the Singapore courts tackled a key question: which country should handle a maritime dispute when incidents span international waters? After examining the location of the collision, existing limitation funds in China, and witness availability, the courts concluded that China was the more appropriate forum. This ruling highlights that courts will often defer to the jurisdiction with the closest ties to the incident, ensuring efficient and fair handling of cross-border maritime disputes. This approach is also relevant in Malaysia, where similar principles apply.

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BREACH OF CONTRACT – FORCE MAJEURE – FORCE MAJEURE UNPACKED: WHEN ‘REASONABLE ENDEAVOURS’ DON’T BEND CONTRACT TERMS

The UK Supreme Court clarified the limits of force majeure clauses, ruling that “reasonable endeavours” do not require a party to accept alternative performance outside the agreed contract terms. This decision emphasizes that force majeure clauses are meant to uphold, not alter, original obligations – even in unexpected circumstances. The case serves as a reminder for businesses to define alternative options explicitly within their contracts if flexibility is desired.

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NEGLIGENCE – MEDICAL NEGLIGENCE – HOSPITAL ACCOUNTABILITY REINFORCED: COURT UPHOLDS NON-DELEGABLE DUTY IN MEDICAL NEGLIGENCE

In a landmark ruling, the court reinforced the hospital’s non-delegable duty of care, holding that even when services are outsourced to independent contractors, the hospital remains accountable for patient welfare. This decision emphasizes that vulnerable patients, reliant on medical institutions, must be safeguarded against harm caused by third-party providers. The ruling ultimately rejected the hospital’s defense of independence for contracted consultants, underscoring a high standard of duty owed to patients.

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CONTRACTS – CONTRACT FOR THE SALE OF GOODS FOB – REMOTENESS OF DAMAGES IN BACK-TO-BACK CONTRACTS – COURT DEFINES LIMITS ON LIABILITY

In a complex dispute involving back-to-back contracts, the court clarified the boundaries for assessing damages, emphasizing that a chain of contracts does not automatically ensure liability passes through. Although substantial losses resulted from delays and disruption, the court highlighted the importance of the remoteness of damages, noting that each contract’s unique terms ultimately limited liability. This decision emphasise the need for parties in chain contracts to carefully define indemnity and liability provisions, as damages are assessed based on foreseeability rather than simply the structure of linked agreements.

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TORT – BREAKING CONFIDENTIALITY – COURT CRACKS DOWN ON INSIDER LEAKS AND CORPORATE CONSPIRACY

In a recent ruling on corporate confidentiality, the court held two former employees liable for disclosing sensitive business information to a competitor, deeming it a breach of both employment contracts and fiduciary duties. This case highlights the serious consequences of unauthorized sharing of proprietary data and reinforces that such disclosures can lead to substantial legal and financial repercussions, even for the receiving parties if they knowingly benefit from confidential information.

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