The significant revisions made to UK Standard Towage Conditions (UKSTC) that came after an 18-month root and branch review of liability were the focus of a CJC Towage Panel Discussion in March, led by Helen McCormick.
CJC Director Helen McCormick led a panel at a well-attended discussion at CJC’s London headquarters on March 19, whose focus was on the recently published UK Standard Towage Conditions 2024.
With Alex McCooke and Rob Shearer from Shipowners P&I Club, and Robert Merrylees of the British Tugowners Association/UK Chamber of Shipping on the panel, this was an enlightening session for industry participants at all levels of experience.
As the first comprehensive revision of the UK towage liability framework in nearly four decades UKSTC 2024 followed consultation across maritime stakeholders, including owners and operators themselves, the UK Chamber of Shipping, the Chartered Institute of Arbitrators, and the International Group of P&I Clubs.
Merrylees set the scene by acknowledging the role the BTA plays as a custodian for industry standards and best practice, also noting that the organization is celebrating its 90th anniversary since its formation this year. Its members offered strong contributions to revising the UKSTC.
UKSTC 2024’s purpose was to simplify the contract, making it easier to use and understand. The UKSTC Review Panel also aimed to resolve ambiguities and update the language for modern operations.
McCooke, who was a member of the UKSTC Review Panel, explained: “The provisions were convoluted and often repeated themselves unnecessarily, taking the long way around to achieve simple objectives. Ultimately, our aim was to strip out all the elements that were not strictly necessary and focus on the core mechanics of the contract.”
McCormick has immersed herself in the UKSTC update on behalf of CJC, based on her extensive experience in port- and offshore related activities. She underlined the efforts that had gone into enhancing clarity, ensuring ease of understanding and strengthening the robustness of its clauses, in language fit for purpose in a modern and connected world.
Taking the revisions clause by clause, participants’ attention was drawn to the simplification of the definition of towing in Clause 1, to take account of how towing begins and ends in practice in the context of modern communications. Wording has been added to the end of Clause 2, seeking to protect tug owners in situations where the hirer and the owner of the Vessel are not the same entity, providing that the Owner cannot later deny that they are bound by the terms where the vessel has willingly accepted towage services arranged by the Hirer. The Clause 3 provision that the tug and its employees are servants of the tow now contains an express carve out for wilful misconduct of the tug’s employees.
Seminar participants agreed that the most significant changes in the UKSTC are to be found in Clause 4, which in 4(c) had previously included a six-part test aimed at establishing a framework for liability.
The new wording requires the Hirer to prove that “the loss has resulted from the personal act or omission of the Tugowners committed with the intent to cause such harm or recklessly with the knowledge that such harm would probably result” if they want to deprive the Tugowner of the protection of the exclusions of liability in Clause 4(a) and the indemnity in Clause 4(b).
Clause 4(e), concerning death and personal injury liability, has also been excised. This clause was included in the 1986 Conditions due to concerns that it might be read as an exclusion of liability for the shipowner for death or personal injury arising from negligence, offending against the Unfair Contract Terms Act 1977.
"There had been a huge amount of debate about what that actually meant," said Shearer. However, it is now understood that UCTA 1977 does not prevent commercial parties allocating ultimate liability for death or personal injury as between themselves. The revised terms replace Clause 4(e) with wording in Clause 4(a) that explicitly incorporates these risks.
Clauses 7 (force majeure) and 8 (Himalaya clause) have also been brought more in line with modern shipping contracts, and users will note language familiar from the Limitation Convention.
Among other significant changes, McCormick noted Clause 9 - governing law and jurisdiction. It now includes an express provision recognising the right of the parties to agree a governing law other than English Law, or to choose a dispute resolution forum other than the English Courts.
For more information about UKSCT 2024, contact Helen McCormick, Director, CJC