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From the Brig

By ISSA’s legal expert Bruce Hailey

Simple points to avoid

expensive mistakes

The dificult market faced by many sectors prompts us to state a few simple but important

points, which might assist ISSA members in avoiding expensive mistakes.

Vessels for DemolitionBulk and Offshore Sectors

The poor market has seen an upsurge in vessels The bulk and offshore sectors are struggling
being sold for scrap. Diminishing scrap prices and a hugely with many ships running at a loss, with no

slight recovery in the dry bulk market had seen this prospect of signiicant improvement, and this is
trend slow a little, but still many vessels are heading for taking its toll on even the largest owners. We have
the beach. For some unscrupulous owners, once the already seen a raft of insolvencies and restructures,

vessel hits the beach they will consider that payments and there will be many more to come. Now is not
to suppliers are unnecessary and with the vesselthe time to allow credit limits to rise, in an effort to

gone the supplier often has limited means of applying helpyourmosttreasuredcustomerstosurvive. Any
pressure. If you are aware the vessel may be headed owner relying on the credit of its ship chandlers for

for demolition, do not offer credit that extends beyond survival is far too close to insolvency to be a candidate
the vessel’s working life. You must leave yourself the for your continuing patience. While you are waiting,
opportunity to arrest the vessel (or make the threat) other suppliers are also pressing their claims for

before it hits the beach.payment. Your own patience is simply enabling your
customer to pay your competitors and quite simply

there may be nothing left by the time you seek your
money. Ofcourseabalancemustbestruck,butso

often we are asked to help clients collect monies
which, had we been instructed just a week or two The ISSA Conditions of Sale
earlier, we could have recovered, but that short delay

had made recovery impossible.The ISSA Conditions of Sale invoke US law. This
is to take advantage of the fact that US law imposes a

maritime lien on the vessel supplied, which in broad
terms then enables the arrest of the vessel even
after it has been sold and regardless of the identity of
Email Hacking
the purchaser. This is subject to the place of arrest
recognising the law of the contract as the applicable
We urge everyone to remain vigilant in identifying
law for the purposes of determining the right to arrest.
A recent decision in Australia (albeit subject to Appeal) breaches of their own email accounts, and those of
held the Australian Court would recognise a foreign other parties with whom they deal. Particular care

(US) law clause and allow an arrest that would not should be taken when sending and receiving bank
have been possible had Australian law applied. This details by email to ensure the sender and recipient
are genuine, and that account details are bona ide.
case demonstrates the wide application of the ISSA US
law clause and serves to illustrate the good sense in Requests to remit monies to a new bank account or to
undertake money transfers should be carefully checked
ensuring the ISSA Conditions of Sale form part of your
contracts with customers (by referring to them in your as once money has been sent to a fraudster’s account it
quotations).is virtually impossible to recover it.

28 | The Ship Supplier | Issue 69 2016