LL.M.

Course 2019/20
International Maritime Law
This is take home examination. The examination is scheduled for 24 hours. You will get the
exam questions online on June 2nd, 2020 at/around 11:00 am. You are required to return your
exam paper online within 24 hours. Be sure your name is on your exam paper!
Your replies should be of a reasonable length. As a guidance, for this exam anything between
2 and 5 pages is considered to be “reasonable length”. Longer papers may be acceptable.
Questions are not given specific weight and the assessment will be based on overall
impression regarding all questions.
Read each question carefully. Think before you write. If you find an ambiguity that affects
your answer to a question, make reasonable assumptions and state these clearly in your
answer. Be concise and clear. Read your answer over before handing it in.

Good luck!

Question One:

What are the main causes of the problems and what can be the solutions to the problems
related to the safety of ships and navigation? Discuss the main causes of ship’s accidents at
sea, the measures undertaken to prevent or reduce such accidents, and elaborate your ideas on
what can be done to improve the safety of navigation.

Question Two:
Tanker "Hakata Maru” is a newly built vessel worth approximately US$ 120,000,000. This
tanker is on its maiden voyage from Iraq towards Japan carrying 200,000 tons of crude oil.
Tanker is under way on high seas approaching EEZ of Japan in dense fog proceeding towards
its destination at the speed of 18 knots. She is equipped with modern automatic radar plotting
aid (ARPA), but Captain does not trust computers and keeps only manual parallel plotting.
On starboard side on safe distance of about 800m is the fishing vessel “Nakasu One” moving
at 15 knots. “Nakasu One” is also equipped with ARPA, but with insufficient number of crew
members which makes difficult having adequate look out on permanent basis. “Hakata Maru”
starts overtaking after informing “Nakasu One” which approves the action. Fog opens,
revealing "Ito Maru" carrying 20,000 tons of perishable goods (fruits and vegetables from
Itoshima area) closing in from port side, forward of the beam. “Ito Maru” was moving at the
speed of 20 knots and using ARPA all the time. In panic, the Captain of ship "Nakasu One”
orders a quick port turn. Collision with “Hakata Maru” follows causing damage to the central
part of its hull structure and leakage of the oil cargo into the sea, while “Nakasu One” sunk
quickly following collision.1

“Ito Maru” starts salvage operations saving persons from “Nakasu One” and taking actions to
save “Hakata Maru”. “Ito Maru” was in possession of modern salvage equipment which
facilitated salvage operation. Both salvage operations were conducted successfully, all crew
1
See the chart of collision attached as annex.
members and fishermen from “Nakasu One” were saved, while “Hakata Maru” was towed to
the place of refuge where the remaining oil cargo was safely discharged. The towage
operation alone took about 72 hours, even though the place of refuge was only 80 miles from
the place of accident, because “Hakata Maru” suffered significant structural damage which
slowed down the towage operation. Cargo of perishable goods on “Ito Maru” which was
delayed by salvage operation was in such bad condition when delivered to the consignee that
it was declared total loss. In the process of salvage, the Captain of “Hakata Maru” agreed to
the salvage award of 5,000,000 US$.

Immediately after the accident the Japanese authorities started efforts to prevent and
minimize pollution of the coast area by oil leaking from the “Hakata Maru” wreck. Winds
and currents pushed the oil towards the coast of the southern Kyushu bringing a longer
stretch of coast under threat from pollution, including fishing areas and tourist resorts. The
Japanese authorities employed on commercial basis a number of local companies to prevent
oil from reaching the coast. Those companies used various equipment, including booms,
skimmers, and oil dispersants. Shore clean-up was organized by local fishery associations and
municipal authorities, primarily using manual methods. Total pollution prevention and clean-
up costs were estimated to be around $ 60 million.

Liability for delay/damage to cargo

The Itoshima farmers who were the owners of cargo on “Ito Maru” sued the owners of the
ship because of delay which has caused substantial damage due to perishable character of the
cargo (fruits and vegetables). The owners of “Ito Maru” argued that they are not liable
because of the inherent vice of the cargo and the fact that delay was caused by their action in
the salvage operations. Do these arguments of the carrier in this case represent a valid defense
under the Hague-Visby Rules? Can cargo owner on “Hakata Maru” claim compensation
against carrier of “Hakata Maru” and owners of “Ito Maru”?

1. Collision liability

Dispute arises on whether there is exclusive or concurrent liability. Based on the available
information, how would you allocate liability between “Ito Maru”, “Hakata Maru” and
“Nakasu One”?

2. Salvage award

After the salvage operations were completed, the owners of “Hakata Maru” refused to
comply with the agreement between its master and the master of “Ito Maru” arguing that its
master acted without authority and/or that the amount was excessive, arguing also that the
Captain agreed on the amount under pressure since the negotiations took place in the situation
of imminent danger. In addition, the owners asserted that “Ito Maru” had contributed to the
accident by moving at excessive speed in fog condition. The parties were not able to reach a
settlement, and they agreed that their dispute is resolved by the arbitration. You are appointed
as sole Arbitrator on the issue of compensation. How much would you award, and on what
criteria? Are owners of cargo on “Hakata Maru” and “Ito Maru” legally bound to contribute
in salvage award? Are the owners of “Ito Maru” entitled to “special compensation” for
preventing environmental damage?

3. Oil pollution liability

Despite efforts to minimize the damage caused by collision, 10,000 tons of oil was spilled
causing substantial damage to the environment and fishing stock. Following the accident, a
number of claims are made against “Hakata Maru” and its P&I club. Claims were made by:

a. Local fishing company, because the oil pollution made impossible fishing in the area
where it normally engaged in fishing;
b. Owners of salmon farm, which was badly damaged by oil pollution causing death of
about 5 tons of pink salmon; and
c. Processing company, which relied for its production on fish obtained from the local
fishing company, as well as pink salmon from the local salmon farm.

Shipowners were unable to pay the claim, because the company was a “single ship company”
that went bankrupt following the accident (the company did not have other assests).
Compensation obtained from the P&I club was insufficient to satisfy all claims, because the
number of claimants was high and aggregate amounts of claims were higher than the
limitation of liability under the Oil Liability Convention (CLC). As result, the claimants
made the claim against the International Oil Pollution Fund (IOPF) under the International
Fund Convention (IFC). You act as the representative of the IFC. Under the IFC criteria,
what claims should be approved and how should be calculated the compensation?2 There is
no need to calculate amounts of damages nor amounts of limitation of liability.

4. Clean-up costs

Following the accident, the Japanese authorities made request to the IOPF for compensation
of measures undertaken to prevent oil pollution, as well as the costs of clean-up operations.
The claims included the costs of deployment of a deep-sea unmanned submarine to inspect
leakage of oil from the wreck, the costs of surveillance of oil spill from air (by the Japanese
Coast Guard helicopters), the use of coastal booms, skimmers, oil dispersants, portable
storage tanks, expense of employment of a number of trained operators, the costs of the
extensive cleaning of both rocky shores and sand beaches, as well as the costs of the
transport and disposal of oily waste. Which costs and expenses can be recovered under
section 3.1 of the IOPC Manual?

2
You can make reference to the IOPC Manual:
https://www.iopcfunds.org/uploads/tx_iopcpublications/2019_Claims_Manual_e.pdf