The Swedish Club Letter

Transcription

No. 2 – 2002
July – November
E
of
Pages 14-17
Annual General Meeting-reports
pages 19-26
Cover photo: Ulf Sjöstedt, Pix Gallery
The Swedish Club is a mutual marine insurance company, owned
and controlled by its members. The Club writes Hull & Machinery,
War risks, Protection & Indemnity, Loss of Hire, Freight
Demurrage and Defence insurance and any additional insurance
required by shipowners.
The Swedish Club Letter is published three times a year and
distributed free of charge to vessels insured with us and to our
members. The Swedish Club Letter is an editorially independent
newsletter and opinions expressed by external contributors are
not necessarily those of The Swedish Club. Furthermore, the
Club does not accept responsibility for errors or omissions or their
consequences.
No. 2 – 2002 July – November
LEADING ARTICLE
Where do we come in the minds of shipowners and
managers?
CLUB INFORMATION
News from Tokyo
News from London
News from Hong Kong
News from Piraeus
The Publications Group
Annual General Meeting
Club Diary / Public Holidays / Staff News
The Swedish Club offices
Readers’ comments and views are welcome by phone, fax or e-mail.
The Swedish Club
P.O. Box 171
SE-401 22 Göteborg, Sweden
Tel +46 31 638 400
Fax +46 31 156 711
E-mail [email protected]
www.swedishclub.com
3
Managing editor
& responsible publisher
Frans Malmros
7
8
9
11
18
19-26
27
28
Editors
Underwriting & Marketing
Claes Lindh
THE SWEDISH CLUB ACADEMY
Marine Insurance Course
Insurance course delegates share in The Swedish Club’s
expertise
4
BRM
Wallem launches BRM training in Karachi
9
STOWAWAYS
Stowaways with destination Spain
Claims & Legal Support
Lars Rhodin
Helena Wallerius Dahlsten
5
Loss Prevention & Technical
Clas Brantmark
ISM
Reasons for OPTIMISM
6-7
FINANCE
2001 – a disappointing year in many respects
8
PERSONAL INJURY
House of Lords overturns Court of Appeal on
asbestos appeals
10-11
FREIGHT DEMURRAGE & DEFENCE
Berth or port charterparty? Voyage charterparties
– commencement of laytime
12-13
CREW
Significant changes in the NLRC rules of procedure
12-13
THE FORCES OF NATURE
The rough weather defence
The forces of nature
14-15
16-17
Finance & Administration
Jan Rydenfelt
Production Co-ordinator
Annelie Fellbom
Editorial
Advisory
Board
Frans Malmros, Helena Wallerius Dahlsten,
Martin Hernqvist, Susanne Blomstrand,
Annelie Fellbom, Petra Setterberg, Claes Lindh,
PR-consultant TRS Public Relations Ltd.
Layout
Eliasson Information, Göteborg
Printed by
PR Offset, Mölndal
© The Swedish Club. Articles or extracts may be quoted
provided that The Swedish Club is credited as the source.
14-0207PR4800F
The Swedish Club Letter 2–2002
Leading Article
Where do we come in the minds
of shipowners and managers?
Occasionally I ask myself, where do we come in the minds
of shipowners and managers? Maybe it is difficult to always
fully appreciate the true value of a high-service insurer such
as The Swedish Club. In the excitement of starting out in
any new venture, the insurer can easily be overshadowed
by the more front line players: the shipyard, which has
built the latest acquisition, the bank, that has put together
the financing scheme and the broker, who has succeeded
in finding suitable employment for the vessel. It’s certain
that the insurer is not uppermost in the mind of the owner,
though we know our rightful place is up there, somewhere.
Paradoxically, we will only be called upon when things have
gone wrong and one has to deal with loss mitigation.
Well used and used when things are going well, without
the pressures building up during a claims situation, we can
be of much more benefit to the average member than we are
today. The Club is a mine of information and experience.
We employ lawyers, master mariners, marine engineers,
naval architects and a number of other experts, who all are
there for you. We have introduced SCOL, Swedish Club
OnLine, which is an excellent tool for claims benchmarking.
We run regular Bridge Resource Management courses and
now also have an annual Marine Insurance Course. We are
further developing our loss prevention activities under a
new concept called Safety Management Support or SMS
for short.
Recently, we enjoyed the celebration of The Club’s
130th anniversary. I have also had the dubious pleasure of
presenting the results for 2001.
We have really been hit by a double whammy, or even
a triple whammy. We have achieved a negligible return on
investments, at the same time as premium levels persist in
remaining at an unsatisfactory level. Moreover, during the
latter part of the year, we were hit by an unusually high
number of claims. All the same, I am optimistic about the
future. In our long history we have had our ups and downs,
like everyone else. Over the years, members have shown an
unflinching loyalty, our staff have always put their shoulders
to the wheel and jointly we possess a staying power second
to none.
Our Club is a small one. For reasons of economies
of scale, we need to continue to grow, with members
having the correct attitude towards mutuality, loss
prevention and high-quality operations. We shall, however,
always endeavour to project ourselves as the small Club,
with the personal touch and an unrivalled service.
Try us; use us!

Frans Malmros
MANAGING DIRECTOR
3
The Swedish Club Academy - Marine Insurance Course
Åsa Agdestein is a marine lawyer with CMACGM, a leading French shipping company.
CMA-CGM operates a fleet of 99 vessels, of
which 25 are owned by the company. Last
year, CMA-CGM transported more than two
million TEUs* and is ranked, in the container
shipping sector, fourth in Europe and eighth
worldwide.
Åsa Agdestein says: “I saw details of the
course on The Swedish Club’s website and decided to register. The content was well-rounded
and covered a broad spectrum of insurance topics that complemented my cargo claims experience. It was interesting to see how different
aspects of marine insurance work together and
to review loss prevention in both H&M and
P&I contexts.”
Åsa adds: “The course also provided a great
opportunity to make new contacts and share
knowledge and information with people from
different shipping backgrounds.”
* Twenty Foot Equivalent Unit
Bengt Meuller is the Operations Manager of
Gorthon Lines, Sweden. This company was
established in 1915, and currently operates a
fleet of 14 vessels. It specialises in the transport
of paper in the Baltic, North Sea and Atlantic
regions.
Bengt Meuller says: “Having spent ten years
at sea, I now have a shore-based role. Consequently, I am still fairly new to office-based
tasks and a friend recommended The Swedish
Club's Marine Insurance Course as a useful
introduction to marine insurance.
“The course provided a very sound overall
picture of how this sector functions. It gave a
clear summary of P&I and H&M subjects. I
also found the Club’s proactive approach to
loss prevention very interesting. The interactive practical workshops were valuable; it was
good to split into smaller groups and use case
studies to explore what had been covered during the week.”
Unit of measurement equivalent to one standard twenty foot container.
4
”A great deal
of effort is put into
making the course
both educational,
interesting and fun”
PHOTO: THE SWEDISH CLUB
”The interactive
practical
workshops were
valuable”
”A great
opportunity
to make new
contacts
and share
knowledge”
Delegates from The Swedish Club's Marine Insurance Course 2002 at the stairs of the
restaurant 'Jungman Jansson' just outside Göteborg.
  As the sole ‘all-in-one’ insurance provider, we are
in an excellent position to share our experience in the
Hull & Machinery (H&M), Protection & Indemnity
(P&I) and Freight Demurrage &Defence (FD&D)
sectors. Each year, we invite Club members and nonmembers to attend our comprehensive week-long
Marine Insurance Course, held in Göteborg.
This course provides both experienced professionals and those new to marine insurance with
knowledge which can be transferred directly to the
workplace. We combine presentations and interactive
workshops, to brief delegates on the latest developments within H&M and P&I. We cover issues, such
as collisions, cargo liability, pollution, FD&D and
loss prevention. The course also provides an informal
networking environment and a forum where delegates
can meet and share experience with colleagues from
other countries and industry sectors.
This year’s course, held on April 22nd -26th, was
attended by 26 delegates from 14 countries.
Details of the Marine Insurance Course 2003 are
available at our website or from our Club contacts, see
the bottom of this page.
Insurance course delegates share
in The Swedish Club's expertise
Vincent Albuquerque is an Insurance and
Claims Manager for Great Circle Shipping
Agency of Thailand – technical managers for
Precious Shipping. The latter was established
in 1989 and has a fleet of 30 handysize bulk
carriers.
Vincent Albuquerque found the programme
well-planned: “It was evident that a great deal
of effort is put into making the course both
educational, interesting and fun. It enhanced
my knowledge of claims handling and pollution legislation, particularly concerning operations in the United States. In addition, the
course gave me the opportunity to meet other
colleagues and develop contacts.”

Club contact:
Helena Wallerius Dahlsten, Deputy Director, Claims
& Legal Support Department/Martin Hernqvist , Loss
Prevention Manager, Loss Prevention & Technical
Department - The Swedish Club, Göteborg
Stowaways
Stowaways with destination…
Cleopatra Georgantzis
CLAIMS EXECUTIVE
Claims & Legal Support Department
The Swedish Club, Göteborg
…Spain!
  It is not uncommon for people who are
‘forced’ to leave their home
country, due to poverty or political
beliefs, to make their way on board a vessel.
Leaving the rest, such as their survival during
the voyage and their destination, to destiny. Under
these circumstances of uncertainty, they hide on board in
the hope that they will end up in a country that will offer them
opportunities for a better life. They can afford such ‘uncertainty’
because, most likely, they will have nothing to lose in doing so.
However, uncertainty is definitely not a key word for the shipowner
on whose ship these people are discovered, and who cannot afford to miss
the estimated time frames of the scheduled voyage. Once the stowaways
are found on board, the objective should be to disembark them. This
can be achieved by informing and cooperating with the relevant authorities, finally placing the stowaways in their custody. With that in mind, a
prudent shipowner and the vessel’s crew need to be informed about the
law, regulations and special characteristics of the ports of call.
As per information received from our correspondents, Messrs Bull
Sworn Marine Surveyors and Consultants, the following is a summary of
the law governing the handling of stowaways arriving at Spanish ports.
Thus, upon arrival of a merchant vessel to a Spanish port with stowaways on board, the master should immediately inform the Immigration
Authorities. This information should be communicated by means of a
signed declaration by the captain on which basic information should be
included, in relation to both the stowaways and the vessel’s itinerary starting from the port of loading. With regard to the stowaways, information
such as the port of their embarkation, the day and time that embarkation
took place and the geographical position of the vessel at the time the
stowaways were discovered is sufficient at this first stage.
When the ship is berthed at a Spanish port, the Immigration Police
will board the vessel accompanied by an interpreter, if necessary. The
police will interview the stowaways in order to verify their identity, their
physical condition, in case a doctor’s attendance is required, as well as to
verify the treatment that the stowaways received on board. In the event
that the stowaways show their intention to enter Spanish territory, or
request the protection of the Spanish government, a lawyer will also be
present during the interview. If the stowaways do not ask for political
asylum, then the master or vessel’s agent will have to ask for their repatriation to their country of origin.
At the end of above process, the captain is made aware of the
responsibility he assumes as far as the security and physical integrity of
the stowaways is concerned.
He is also warned about the
prohibition of disembarking
the stowaways in any Spanish
port.
At the next stage, the
local police station will
have to submit a report to
the Assistant Representative
of Government, as it is
called, within 24 hours of
the vessel’s berth. The above
mentioned representative
will assess all the information
made available in relation to
ILLUSTRATION: HANS DAHLB ERG
the incident. Whether or not
the stowaways may disembark will depend upon the treatment received
on board and whether it was in accordance with the European Agreement
for the Protection of the Human Rights and Fundamental Liberties, their
medical condition, whether the vessel’s agent will ask for their repatriation
and whether the stowaways will make a request for political asylum.
When a stowaway requests political asylum in Spain, this request will
be relayed to the Office of Asylum and Refuge for further assessment. In
the meantime, and as long as the vessel stays at the port and the authorities
are satisfied with the living conditions on board, the applicant will remain
on the ship under the responsibility of the captain. Please note that the
above by no means restricts the vessel to stay at the port until the final decision of the authorities. If the vessel is due to sail before such a decision is
made, the applicant will be transferred to the authorities’ dependencies.
In the case the stowaways have been disembarked for one of the above
reasons and their application has not been accepted, they will be repatriated to their country of origin.
As regards expenses incurred from the time the stowaways are found
until their disembarkation, they will be accounted for by the owner, and
the same applies for the expenses incurred in the event that these people
are repatriated.
Finally, we would like to draw our readers’ attention to the fact that
heavy fines will be imposed by the authorities in the event that the master
fails to declare a stowaway on board upon arrival or at the time of the
vessel’s clearance. Particularly high fines will also be imposed in case the
master does not take precautionary measures to prevent stowaways from
escaping while the vessel calls Spanish ports. In that case, the fine could be
in the region of USD 175,000-200,000. It is also worth mentioning that
if a fine is imposed then, security in the form of a bank guarantee will be
requested as the authorities will not accept Club Letters of Undertaking.
The issuing of a bank guarantee may take a while and thus, causing delay
of the vessel. (Please see The Swedish Club News 1-1997.)
We trust the above will be of assistance to you should you have to deal
with a stowaway case in Spain, although we wish you all the best with your
efforts in avoiding such a situation!

5
ISM
Reasons for
OPTIMISM
Martin Hernqvist
LOSS PREVENTION MANAGER
Loss Prevention & Technical Department
  By the date of publication of this newsletter,
the ‘ISM phase 1’ vessels (tankers, bulk carriers
and passenger vessels) have had their Safety
Management Certificates for more than four
years and the deadline for the ‘phase 2’ vessels
(other cargo ships of 500 gross tonnage and
upwards) has just passed. There are differing
opinions as to whether ISM (International
Safety Management) has been a failure or a
success so far. Perhaps it is too early to make
any general statements concerning the shipping
industry as a whole. The truth is probably that
for some companies it has been as success while
for others ISM has produced few significant
improvements.
The studies on ISM that The Swedish Club
has made, have shown that those of the Club’s
members who operate phase 1 vessels have made
large improvements in the claims rate compared
to those who operate phase 2 vessels. These
improvements that, to a large extent, seem to be
related to efficient safety management should
serve as encouraging examples for the phase 2
vessel operators who should have their safety
management systems in place by now.
The will and the tool
According to the Club, there are many factors
that explain why ISM ought to have a great impact on the accident rate for the industry. First
of all we believe that the shipping industry
previously had a higher acceptance and toler-
Bridge procedures form an important part of the Safety Management System of Star Cruises of Malaysia.
Here, on board the cruise vessel SUPERSTAR VIRGO, both the Normal Bridge Procedures as well as the
Emergency Bridge Procedures are found at arm’s length just behind the navigating officers.
ance of accidents, that accidents have more or safety cultures, where safety issues are managed
less been considered a natural part of shipping in such a way that the risk of failures is minioperations and have all happened ‘by accident’. mised. ISM is therefore an important tool for
This has changed. Increased environmental companies that aim to improve their safety
awareness and concern, greater care for people records and reduce their costs.
and property, public opinion, goodwill factors
The positive results that the Club has
and a greater insight into the fact that there are noted amongst Club members following the
ways of preventing accidents have created a implementation of ISM have, as far as we are
strong will to make a change.
aware, still not been reported by any other
Even if an organisation’s will and motivation H&M insurer or P&I Club. We felt the need
to make a change are prerequisites for improved to try to identify the reason for this. One idea
results, there have to be efficient measures to is that the large proportion of quality members
achieve the goals as well. Historically, safety has in the Club could have played an important part
to a large extent been approached from a tech- - members who have the will to use available tools
nical perspective. This too has changed. ISM to further improve safety.
focuses on the human and the organisational
factors. It is within these areas we often find
30 per cent improvement
the root causes of accidents. Many accidents The Club’s conclusion from the ISM studies
do not happen accidentally, they could rather was that a shipowner could expect to achieve a
be described as ‘system failures’ or the results reduction of claims in the region of 30 per cent.
of the company’s safety culture*. The main ex- This is an average figure based on the difference
planation why some companies are found more in claims development that evolved between the
often than others in the accident statistics, is phase 1 and phase 2 vessels after the phase 1
differing safety cultures. The overall objective deadline passed in 1998. A few things related
of ISM is to raise the general standard amongst to this figure should be stressed further. We
all shipping companies, ensuring more uniform have measured the difference between these
*Safety culture: By professor James Reason described as “the way we do things around here”.
6
ISM / News from Tokyo
Bad debt
News
from
Tokyo
  Early May this year marked the anniversary of Jinichiro Koizumi
becoming Prime Minister of Japan. Most Japanese people believed at
the time that he could reform the country’s political and economic
structures. However, such expectations have now been disappointed.
The approval rate for the Cabinet of Prime Minister Koizumi has
plummeted dramatically.
To activate the economy again, the issue of bad debt has to be
normalised. However, both the government and financial institutions
have not taken any drastic steps for the last ten years.
Japanese underwriters have also suffered from the issue of bad
debt. Furthermore, the events of September 11th 2001 were another
body blow for them. Their current financial positions are much worse
than they were five years ago. They have taken steps to merge and/or
cut all costs over the last two years. Despite this, there have been no
signs showing there will be an improvement in the financial position.
On the other hand, the level of Japanese hull premiums is still very
low. Their results have been negative for quite a few years. Japanese
hull underwriters need an increase in premium levels this year. Yet, as
the Japanese freight and chartering markets have not been improved,
Japanese shipping companies will not accept the premium increase and
will put pressure on them. The Japanese hull underwriters have been in
tough competition with one another.
So, how will they survive in this situation?
Under current circumstances, the crucial moment for the Japanese
hull market will be the second half of this year.
two vessel groups and not the claims development just for phase 1. This is important to stress,
since it may be difficult to understand why premium increases are needed if claims have been
reduced. The truth is that the claims rate for
phase 1 has been stable while we have seen an
increase for phase 2. This has occurred during
a period when average deductibles have fallen.
Normally, lower deductibles mean more claims,
Ryuzou Imai
GENERAL MANAGER
The Swedish Club Japan
but this was not the case for the phase 1 vessels
during the study period. This was most likely
thanks to improvements in safety. The phase
2 vessels, however, could not withstand the
lower deductibles and produced more claims
reported to the Club. The gap between phase
1 and 2 eventually amounted to about 30 per
cent. Premiums, on the other hand, have fallen
dramatically over the past years and this has
Actual loss rate per 1,000 ships 1978-1997.
The frequency of total losses has been reduced by 30 per cent as much as four
times during the period 1978-1997.
resulted in most H&M insurers and P&I clubs
making huge losses. Combined with lower
returns from investments, there is an obvious
need to restore a balance between premiums
and claims. Seemingly, however, ISM has made
such an impact that we may find a balance at a
lower level than before.
Another thing that could be worth touching
upon in relation to the 30 per cent figure is the
size of the figure itself. There are those who are
sceptical and believe that 30 per cent is too good
to be true. At first, the author thought so too.
However, just as a comparison, let us compare
this with total loss statistics produced by Lloyd’s
Register and published in the Seaways magazine
in April 2002. (See graph on your left side.) If
we were to ask people back in 1978 whether it
was possible to reduce the number of losses by
30 per cent, many would find it difficult. However, that was achieved only four years later. In
fact, the number of total losses was reduced by
30 per cent as much as four times during the
20-year period from 1978-1997. 30 per cent is
certainly a lot, but obviously not an utopia.

7
Finance / News from London
2001– a DISAPPOINTING
year in many respects
Jan Rydenfelt
DIRECTOR
Finance & Administration Department
  2001 proved difficult for many sectors
and marine insurance was no exception. Corporate profits decreased sharply over the past 12
months and the U.S. economy entered a recession for the first time in a decade. The events
of September 11th increased the uncertainty
currently shaping views of future prospects.
Conditions grew more difficult in the shipping industry – by its very nature dependent
on world trade levels. Freight rates, especially
for container vessels, fell substantially. Furthermore, the Club was affected by the soft
insurance market and a continuing weak stock
market. The result before appropriation and tax
was a loss of USD 23 million.
Gross premiums of USD 61.1 million were
up 13 per cent compared to the previous year.
After the cost of reinsurance, net premiums
increased from USD 35.3 million to 38.6
between 2000 and 2001. The gross claims
of USD 57.4 million were on a par with 2000,
but a smaller portion of the claims were on the
reinsurers´ account. As a result, net claims
were up from USD 38.0 million to 55.1. The
underwriting result showed a loss of USD 16.5
million, compared to a loss of USD 2.7 million for 2000.
The administrative expenses of USD 7.8
million were USD 0.5 million higher than for
2000. The increase was due to higher commissions to brokers as a result of higher volumes.
In terms of volume, the Club grew substantially in the H&M insurance business: measured in terms of the number of vessels insured,
the increase was about 40 per cent.
We did not lose money on our investments,
but it was close. The investment income of
USD 0.6 million was more than USD 8 mil-
lion less than for 2000. The stock markets were
turbulent – the world index was down 30 per
cent from January 1st to its low on September
21st. Subsequently, it made a 17 per cent recovery, ending 18 per cent down over the full year.
The Nordic Market was down 17 per cent. The
Club’s equity portfolios performed a little better
than the benchmark and ended the year down
14 per cent. However the profit on other investments, especially bonds, was slightly higher
than the losses made on equities.
This year has started with some further
losses on investments. We also predict a loss on
the insurance business. We have good reasons
to believe that most other marine insurance
companies are in the same situation. In order
to cover the losses, shipowners have to foresee
higher premium levels in the future. With that
in mind, our ambition is unchanged and we
will continue to offer a high service level, together with competitive premiums to quality
shipowners.

A lawyer’s lot
News
from
London
8
 At the time of writing, London is in the throes of the
final preparations for the Golden Jubilee celebration of
the Queen’s fifty-year reign. To facilitate the celebration,
an extra day has been declared a public holiday and
throughout the land the villages and towns will hold their
own celebrations of this event.
Of almost equal importance is the beginning of the
football World Cup in Korea and Japan. Many bars and
restaurants are installing special wide screens and offering
‘soccer’ breakfasts and lunches that can be eaten while
viewing the action.
With over one hundred new claims and enquiries
since the start of the new year on February 20th 2002 and
226 open active files in existence, the four legally qualified
FD&D specialists of the London office, who between
them handle almost all of the FD&D claims and enquiries
that come to the Club, will have to start their days earlier
and finish later to keep up with the national celebrations.
In addition to handling claims and disputes that arise
worldwide, these four claims handlers are frequently
called upon to advise on the wording of charterparties and
other contracts and also to give consideration to the legal
consequences of practical and commercial situations.
That London and English law have a dominant
position in the world of maritime disputes is beyond
question. There is a wealth of expertise in maritime matters
in London, with highly experienced lawyers, arbitrators
and judges, not to mention the insurance experts, all of
which are second to none. This is why almost all of the
FD&D enquiries and claims of the Club are handled in
the London office. With contracts being fixed and broken,
incidents and accidents occurring every day of the year,
there is little respite for the claims handlers.
In the majority of cases the disputes will be resolved
through negotiations conducted either directly by or under
the guidance of the claims handlers and 174 such matters
have been brought to a successful conclusion in the past
twelve months.
But some cases, perhaps not more than ten percent, go
to trial or arbitration, and those that do can absorb as much
as 75 per cent of the handler’s time during the preparation
and actual hearing.
With an income last year of about USD 1.8 million we
are mindful of the need to keep costs, and so premiums, as
low as possible, so we deal with as much of the work as is
reasonable in-house. When outside lawyers are used they
are given limited instructions and control of the case is
always retained in-house.
So while the world’s media reports on the celebrations
taking place in this green and pleasant land, spare a thought
for the claims handlers who will be shouldering their
responsibilities with their usual care and attention.
To paraphrase a line from a Gilbert and Sullivan opera,
‘A lawyer’s lot is not a happy one’.

Ken Bright
GENERAL MANAGER
The Swedish Club U.K.
The Swedish Club Academy - BRM / News from Hong Kong
Wallem launches BRM
training in Karachi
  A new training centre, Wallem Maritime Training Centre Karachi
(WMTC Karachi), was recently approved and licensed by The Swedish Club
to conduct the Club's BRM course. With this, Wallem Shipmanagement
Inc. further strengthens its commitment to BRM training by making the
SAS-BRM course available also to its Pakistani officers and engineers. Today,
Wallem is authorised to conduct the course at three training centres, WMTC
Mumbai, WMTC Moscow and WMTC Karachi.
Wallem’s Capt. SMR Rizvi, who was recently trained as BRM Workshop
Leader at the SAS Flight Academy in Stockholm, will be heading the BRM
course at the Karachi training centre. Captain Rizvi plans to conduct the first
course in early August this year.
For further information about courses and dates, please contact Capt.
Rizvi at [email protected].
BRM Training Centres licensed by The Swedish Club (in order of
date of licensing):
 The Swedish Club Training Centre, Piraeus, Greece
 Wallem Maritime Training Centre, Mumbai, India
 Anglo Eastern Maritime Training Centre, Mumbai, India
 PHILCAMSAT, Manila, the Philippines
 Southfield Agencies, Manila, the Philippines
 Wallem Maritime Training Centre, Moscow, Russia
 Wallem Maritime Training Centre, Karachi, Pakistan
Capt. SMR Rizvi, who will be heading the BRM course at the Karachi
training centre.
Wallem Maritime Training Centre Karachi
c/o Terra Marine Agency
2nd floor, Old Ralli Building, Talpur Road
P.O. Box 5300
Karachi, Pakistan
Telephone +92 21 242 8812
Fax:
+92 21 241 0041
E-mail:
[email protected]
Spring in Hong Kong 2002
News
from
Hong Kong
  Global warming has done wonders for Hong Kong this
spring. The rainy, misty and damp conditions we usually have
from the Chinese New Year until the time the tropical rain
starts in May/June were replaced this year by dry and warm
conditions.
Although the Hong Kong stock market has started to
recover, unemployment rates have hit seven per cent recently.
With the economies in Korea, Taiwan and China doing quite
well, we are hoping for a spillover to help out the stumbling
economy in Hong Kong.
The World Cup has meant that football fever has hit China,
Korea and Japan. Although the sport has never been the
most popular in any of these countries, it is gaining followers
at an increasing speed. Tickets, especially for the Chinese
games, were sold out a long time ago and are amongst the
most expensive on the black market. If an Asian team were
to win the World Cup it would not only be a big surprise to
many people, it would also turn the present football fever into
euphoria.
On a recent trip to Taiwan with a colleague, we were
greeted and cheered on by an enthusiastic crowd of about 200
teenage girls at the airport. Although a bit surprised, we regained our composure quickly and were ready to start signing
autographs and handing out the latest Swedish Club brochures
when reality came crashing down on us. They were not
there to see us. They started to push and shove us aside
to get photos and signed posters of a famous Hong Kong
Canto-pop band who happened to have been on our
flight.
It suddenly dawned on us that marine insurance,
although at times fascinating to many of us, does not
thrill and capture the imagination of the masses. We
are a tool, needed by shipowners so they can trade their
ships. A financial arrangement established to minimise
their exposure to unexpected liabilities, as well as a
service provider offering legal, technical, loss preventive
and claims services. As such, we try to stay away from
the headlines and try to integrate ourselves to form an
important part of a shipowner’s organisation. No flashes,
no fan clubs. Member satisfaction is the only leading star
in our lives.

Tord Nilsson
MANAGING DIRECTOR
The Swedish Club Hong Kong Ltd.
9
Personal Injury
House of Lords Overturns Court of App
Asbestos Appeals
Mr John Caddies
PARTNER
Personal Injury, Employment and ITF Unit
Hill Taylor Dickinson, London
  On December 11th 2001, the Court of
Appeal gave judgment on six appeals deciding
three issues on asbestos claims. The most
important part of that judgment determined
whether a claimant was entitled to recover
damages if he was exposed to asbestos by two
or more employers and subsequently developed
mesothelioma – the ‘Fairchild’ decision. The
Court of Appeal decided that he was not, even
if either or both employers accept that they
negligently exposed him to asbestos.
Mesothelioma – ‘all or nothing’ disease
This surprising result was due to the unusual
way in which mesothelioma develops. The majority of asbestos-related conditions such as
pleural plaques, pleural thickening and asbestosis are cumulative diseases. This means that
once the threshold level is exceeded the more
asbestos an individual inhales, the worse the
condition becomes. However, mesothelioma,
(a malignant tumour that is always almost fatal
within two years of its appearance) is, according
to current medical thinking, an ‘all or nothing’
disease. This is because it is triggered on one
particular occasion when a process is started
by one or more asbestos fibres which ultimately
leads to the development of the disease. This
means that when a claimant has been exposed
to asbestos from two different sources, it is
impossible definitively to determine which
exposure caused mesothelioma to develop.
In the above Appeals, the claimants developed mesothelioma after exposure to asbestos
from two or more sources. The claimants’
solicitors argued that as mesothelioma is an indivisible injury, once one defendant is brought
before the Court, that defendant, on the balance of probabilities should be held liable for
the whole of the claimant’s injury.
Unjust results
The Court of Appeal concluded that this argument not only defies logic but may also lead
to unjust results. It may, for example, impose
liability for the whole of the disease on an employer with whom the claimant was employed
10
for only a short time, if his other employers can- ‘cynical and underhanded’ bid by the insurance
not be traced. The Court of Appeal therefore industry to stop them, the insurers offered to
decided that if a claimant cannot show, on the pay the claimants their damages and costs in full
balance of probabilities, that exposure to asbes- if they all dropped their appeals. This would
tos dust with one particular employer caused have resulted in the Court of Appeal decision in
the development of his mesothelioma, then favour of the defendants remaining as binding
his claim must fail. The result was an obvious authority unless another claimant took his case
anomaly; a claimant who has negligently been to the House of Lords. The offer was to include a
exposed to asbestos dust by one defendant will voluntary compensation scheme organised on an
be able to succeed with a claim. However, a industry-wide basis by the Association of British
claimant exposed to asbestos by two or more Insurers which would be open to hundreds of
defendants is likely to fail.
other claimants whose cases had been stayed
pending the decision of the House of Lords and
Provisional damages
to future claimants. However, payments under
The Court of Appeal also considered these
that scheme would be less generous than typical
issues in relation to claims for provisional damCourt awards.
ages. This is where a claimant, who is suffering
A solicitor for the employers and their
from a mild asbestos-related condition, such
insurers, pre-emptively informed the House
as pleural plaques, wishes to accept a sum of
of Lords Judicial Office that a settlement had
money on the basis that he may return to Court
been concluded, when at least one claimant
for further damages at a future date, if he were
was unaware that an offer had been made. This
to contract a more serious condition such as
meant that the hearing dates in April were lost
pleural thickening, asbestosis, mesothelioma
when Mrs Fox refused to accept the offer. Mrs
or asbestos-related lung cancer. The Court of
Fox felt there were hundreds of people in the
Appeal had to decide whether it was appropriate
same position as her late husband awaiting the
to allow a claimant to return in the future to reoutcome of the appeal and she was sure her
cover damages for mesothelioma or lung cancer
husband would want the appeal to continue.
where there were two or more defendants.
All three appeals were then re-listed for the
The Court of Appeal approved the Trial
May 7th - 9th 2002.
Judge’s decision that pleural thickening and
asbestosis can be dealt with by the normal
Claimants’ appeals allowed
provisional damages order, but decided that if
On May 16th 2002, the House of Lords allowed
mesothelioma or lung cancer were contracted
the claimants’ appeals. The written reasons
in the future, there should be another hearing
in support were handed down on June 20th
to decide the causation element of the claim on
2002. We will provide a further update once
the basis of medical knowledge and law at that
we have had an opportunity to discuss the way
time. This could obviously result in some future
forward in dealing with such claims with the
claims succeeding and others failing depending
defendant Solicitors Industrial Disease Special
upon the state of medical knowledge or opinion
Interest Group. The House of Lords has held
and changing attitude of the law at the time that
that a claimant who developed mesothelioma
the disease develops.
due to inhaling asbestos fibres in more than
one employment may claim damages against
Permission to appeal
all of his employers, even though he could not
The House of Lords granted the claimants prove with which employer he contracted the
permission to appeal which was due to take disease. The House of Lords considered the
place on the April 22nd - 24th 2002 inclusive. directly conflicting policy arguments. They
However, in what has been described as a
PHOTO: PHOTODISC
Personal Injury / News from Piraeus
peal and finds against Defendants in
accepted that a finding for the claimant could
mean that a defendant may be held liable
for all of the claimant’s damages, even if that
defendant was only responsible for a small
proportion of the claimant’s overall exposure to
asbestos. However, they were of the view that
any unfairness to a defendant was outweighed
by the injustice to an employee who could not
recover simply because he had been negligently
exposed to asbestos by more than one employer.
Therefore, in these specific circumstances, the
House of Lords adopted a lower threshold for
causation, namely that where the claimant
could show that his exposure to asbestos with
two or more defendants materially increased the
risk that he would develop mesothelioma, this
would be treated as proof that each defendant
materially contributed to his illness. This means
that if a claimant has been exposed to asbestos
by a number of defendants, he need now
only sue one defendant as he can recover full
damages from that defendant. It will then be
up to that defendant to locate and attempt to
recover contributions from other employers who
exposed the claimant to asbestos.

Judith Fairchild (suing as Administratrix and Widow of Arthur Eric Fairchild (Deceased)
-vGlenhaven Funeral Services Limited, Waddingtons Plc and Leeds City Council and five other appeals
Ancient wisdom
“Listen to me; they were children before I gave them the
use of reason and made them wise. I revealed the science of
numbers, the foundation of all learning, and the coupling
of letters.”
News
from
Piraeus
  These are words written by Aeschylus in 450 BC,
and describe the god Prometheus in the Greek tragedy
Prometheus Bound. Prometheus, whose name means
'forethought', is known as the god who was responsible for
the creation of humanity.
One may ask how a Greek tragedy written 25
centuries ago relates to our time. These ancient tragedies
deal with reflecting the future in subjects that never
change, with problems that are always topical, concerning
both heart and mind.
The tragedy of Prometheus has to do with a key
theme in our contemporary world: the potential of
technical and scientific knowledge and its relation to
good and evil. Marine insurance is presently facing some
difficult times, combined with a weak freight market.
But it will not be too difficult if we try to use some of
Prometheus’s wisdom.
Let the future be guided by our hearts and minds
and do what we believe is right. That is why we aim to
ensure that we provide competent cover, combined with
trustworthy service and adequate premiums.

Clas Rydén
GENERAL MANAGER
The Swedish Club Greece
11
Freight Demurrage & Defence / Crew
Berth or port
Voyage charterparties
– Commencement of laytime
 The distinction between the two types of
voyage charterparty has been accorded further
significance recently, particularly following
the Court’s decision in The Happy Day [see
The Swedish Club Letter Issue 1-2002]. This
dispute arose under a berth charterparty, but
because owners did not tender a valid Notice
of Readiness, laytime never commenced at the
discharge port and no demurrage was payable to
owners (in fact they had to pay despatch!) The
vessel had tendered notice when she was not yet
an arrived ship in accordance with the terms of
the berth charterparty.
Voyage charterparty
In a voyage charterparty, the charterer pays
freight to the owner. This is payment, not
only for the voyage itself, but also for the
agreed time in which to load and discharge
his cargo. If a charterer takes longer to load
and discharge than the laytime provided for
in the charterparty, then he is usually liable to
pay damages by way of demurrage. The rate of
demurrage is normally fixed on a daily basis
and will be payable per day or pro rata for any
part of a day. Some charterparties also provide
that if the cargo is loaded and discharged in less
than the laytime allowed, then the shipowner
will pay a sum of money to the charterer. This is
despatch and is often set at half the demurrage
rate.
Commencement of laytime
Substantial sums of money can turn on exactly
when laytime begins and ends. For example,
does time begin to run when the vessel arrives
at the loadport or when it actually begins to load
the cargo? Similarly, what happens if the cargo
is not ready to be loaded, so the vessel has to sit
idle for a day? Even a difference of a few hours
can mean thousands of dollars for owners and
charterers. Consequently, there is a need for
clear rules as to when time starts and finishes.
The first place to look for laytime provisions
will always be in the charterparty itself. Usually
the charterparty will stipulate exactly when laytime should begin. Subject to the specific terms
of the charterparty, the general rule is that
laytime begins to run when the following three
requirements have been satisfied:
1. The vessel has arrived at the place specified in
the charterparty;
2. The vessel is, in fact, ready to load/discharge;
and
3. A valid Notice of Readiness has been tendered in accordance with the terms of the
charterparty.
In this article, we are concentrating on the
first requirement for when laytime begins: when
the vessel has arrived at the place specified in
the charterparty.
Terms of berth charterparty
There are essentially two different types of
voyage charter – namely a berth charter and a
port charter. The distinction is important for
determining when the loading voyage, that is
to say the voyage of the ship to the loadport,
ends. A berth is a specific place within a port.
It is the place where the vessel actually loads
and discharges. Under the terms of a berth
charterparty, the loading voyage does not end
until the vessel is actually in the berth where
it will load the cargo. The charterparty will
usually name the berth or provide that a berth
will be nominated as the place for loading or
discharging. This will make the charter a berth
charter. The berth is the agreed destination
and therefore the vessel will be an arrived ship
when she is securely moored there. In the case
of North River Freighters Ltd. v President of India
[1955] 2 Lloyd’s Rep 668 Jenkins LJ made it
clear that laytime in a berth charterparty
could not commence until the vessel has
arrived at its particular berth as specified in the
charterparty.
Berth or port charterparty
The determination of whether a charterparty
is a berth or a port charterparty can simply
be dependent on the order of the words in the
relevant clause. Donaldsen J, in The Finix
Significant changes in the NLRC Rules of
Mr Ruben T. Del Rosario
MANAGING PARTNER
Del Rosario & Del Rosario, Manila
 The National Labor Relations
Commission (NLRC) has jurisdiction over
the claims of Filipino seafarers. On March 18th
2002, the NLRC amended some of their rules
of procedure. Certain changes deserve some
discussion.
The old rules of the NLRC provide that
Labor Arbiters have jurisdiction to hear and
decide claims of ‘all workers’. The new rules
now clearly state that Labor Arbiters also have
original and exclusive jurisdiction to decide the
claims of ‘overseas Filipino workers provided
for by law’. The term ‘overseas Filipino workers’
includes seafarers.
The NLRC amended this provision to
conform to the Migrant Workers Act of 1995,
12
which gave the NLRC the original and exclusive jurisdiction to hear the claims of ‘overseas
Filipino workers’. This amendment leaves no
doubt as to the Labor Arbiter’s jurisdiction to
hear the claims of Filipino seafarers.
Declaration of Non-Forum Shopping
A complaint must now include a ‘declaration
of non-forum shopping’. This is taken from
the Revised Rules of Court of the Philippines,
which prohibits the filing of two or more suits
in different forum. Forum shopping consists of
filing multiple suits involving the same parties
for the same cause of action, either simultaneously or successively for the purpose of obtaining a favorable judgment. If a seafarer has filed
suit in the NLRC, he is prohibited from filing
a similar suit in another forum. This rule has
been extended to a respondent or defendant
who for some reason commences a new action
against a complainant or plaintiff.
A certificate of non-forum shopping is also
required in cases of appeal. A mere notice of ap-
peal without such a certificate shall not stop the
running of the period for perfecting an appeal.
Surety Bond
The surety bond to be filed together with the
appeal shall be accompanied by:
a) a joint declaration under oath by the employer, his counsel, and the bonding company
attesting that the bond posted is genuine, and
shall be in effect until the final disposition of
the case;
b) a copy of the indemnity agreement between the employer-appellant and bonding
company; and
c) a copy of the security deposit or collateral
securing the bond.
The requirement on the copy of the security
deposit or collateral is new. At the moment, it
is still not settled as to whether a Club Letter
of Guarantee is considered to comply with the
new requirement.
Another new provision is the recognition by
the NLRC rules of a motion to reduce a bond,
Freight Demurrage & Defence / Crew
charterparty?
Charlotte Lacey
MANAGER FD&D LONDON
The Swedish Club U.K.
(1975) 2 LLR 668, held that the words in a
charterparty ‘one safe berth, London’ would
be a berth charterparty, but the words ‘London,
one safe berth’ would be a port charterparty.
The charterparty must be construed fully to
determine whether or not it is a berth or port
charterparty. However, when it comes to
the tendering of Notice of Readiness and the
commencement of laytime, it is important that
owners know whether they have a port or berth
charterparty to ensure that a valid Notice is
tendered and to ensure that time commences.
A berth charter therefore puts the risks of
delays and congestion in the port on the owners. Of course, each charterparty will be worded
differently and a WIBON (Whether In Berth
Or Not) clause may transfer the risk for the delay back to charterers even in a berth charter if
the reason preventing the vessel getting into the
berth to be an arrived ship is caused by charterers (The Kyzikos (1989) 1 LLR 1).
Under a port charterparty
By contrast, under a port charterparty, a vessel
becomes an arrived vessel for the purpose of
calculating laytime once she arrives within the
confines of the port as stipulated by Lord Reid
in The Johanna Oldendorff [1973] 2 Lloyd’s Rep
285. In this case, Lord Reid said that the test was
whether the vessel was at such a place within the
Procedure
provided a ‘bond in a reasonable amount’ is
posted. If a shipowner claims that his liability is
only USD 60,000 and the decision of the Labor
Arbiter is for USD 100,000, the shipowner may
file a motion to reduce the amount of the bond
together with the appeal. However, it is still
unclear as to what is to be considered a ‘reasonable amount’. It would appear, however, that the
appeal could be considered perfected provided a
bond in a reasonable amount is posted.
Execution Proceedings
Whereas under the old rules, execution may
issue after the decision of the NLRC Commission has become final, under the new rules, it is
required that a pre-execution conference is held
within two (2) working days from the receipt of
the motion for the issuance of a writ of execution. Thus, there will be no surprises for the
respondents as to the execution of a decision.
Another rule change deals with the filing
of a petition for certiorari, with a higher court
assailing the decision of the NLRC Commis-
port that she was at ‘the immediate and effective
disposition of the charterers’. If she is at a place
where waiting vessels customarily lie, then there
is a presumption that she has arrived unless the
charterers can show otherwise. Conversely, if
she is at some other place within the port, then it
is for the owners to show that she is nonetheless
at the charterer’s disposition.
With a port charterparty then, if the berth
is free, the vessel will only be an arrived ship
when she is all fast at the berth. However, if
she is unable to proceed directly to the berth
because of congestion, tides, bad weather, the
lack of availability unavailability of tugs etc. she
will still have arrived at her agreed destination
under a port charterparty if she has satisfied
the Lord Reid test above: i.e., she has reached
a position within the port and at that position
she is at the immediate and effective disposition
of the charterers.
In the case of a port charterparty, a WIPON
(Whether In Port Or Not) clause can assist
owners if they are unable to enter the usual
port area, providing all other requirements of
readiness are met.
Valid Notice of Readiness
Therefore, for owners to ensure that they
are serving a valid Notice of Readiness, it is
important to establish whether or not they
sion. Even if such a petition is filed before
the Court of Appeals or the Supreme Court,
execution proceedings will still proceed unless
the aforesaid courts issue a temporary restraining order. Under the old procedure, the Labor
Arbiters do not issue a writ of execution in deference to the petition for certiorari filed with
the higher courts. Now, under the new rules,
it is quite clear that execution may issue unless
a temporary restraining order is issued by the
higher court.
Unfortunately, when an execution of the decision is effected and the higher court reverses
the decision, it is quite difficult to retrieve the
judgment award from the complainant.
Conclusion
The new provisions on the jurisdiction of Labor Arbiters and the certification of non-forum
shopping may impact on actions filed in foreign
jurisdictions by Filipino seafarers. The new provisions on appeal may cause the non-perfection
of the appeal if the new rules are not followed.
It is important that expert advice be obtained
on the new rules.

have entered into a berth or port charterparty
so that in the event that the vessel cannot steam
straight to the berth, owners know whether or
not they can tender a valid Notice of Readiness.
There are several other clauses, often within a
charterparty, which will impact on when the
vessel can validly tender notice, for example in
the Asbatankvoy charter – clause 9, which puts
an additional obligation on charterers that a
berth will be ‘reachable on arrival’. Therefore,
if there is a berth charterparty (under which
laytime would not start because the vessel has
not reached the berth) that contains a reachableon- arrival warranty, charterers would pay for
the time lost waiting to berth because they
would be in breach of their obligations to
provide a berth reachable on arrival. In the
absence of other such provisions in a berth
charterparty, owners must consider whether
the vessel has reached her destination pursuant
to the charterparty. Is the vessel where she
should be to tender notice? As The Happy Day
confirmed, an invalid notice will not become
valid. A new and valid notice must be tendered
to commence laytime.
The concept of an arrived ship is a complex
one under English law and this article has only
touched on one or two major aspects; the wellknown London arbitrator Mr Donald Davies
managed to write a whole book on the subject!

POEA implements
Amended Standard
Employment Contract
 The Philippine Overseas Employment
Administration (POEA) issued Memorandum
Circular No. 02 dated June 5th 2002 immediately implementing the amended POEA
Contract. The Philippine Supreme Court has
finally dismissed with finality the two petitions
filed by seafarers groups questioning the provisions of Section 20 of the amended Contract.
The amended Contract has added provisons
on work-related injury, illness or death, release
from ‘all claims’ upon payment of benefits, a
third physician to resolve disputes on disability
gradings, concealment of past medical condition and voluntary arbitration.

We are pleased to report on the latest developments
referring to the implementation of the amended POEA
contract of 2000 as per the above statement received from
our correspondents Del Rosario & Del Rosario. Should
you have any questions in relation to the relevant contract
which is now in force or in connection with other crew
contracts, please do not hesitate to call us. Birgitta Hed
- Claims Executive, Claims and Legal Support Department,
Göteborg +46 31 638 431.
13
The Forces of Nature
Fredrik Olsson
CLAIMS EXECUTIVE
Claims & Legal Support Department
  A ship encounters a storm with heavy 1893 with the introduction of the Harter Act.
winds and high waves. Some of the cargo The shipowner became liable for his negligence,
but was not allowed to exclude
is lost overboard and some
liability. The act also gave the
sustains damage. Under these
“The exclusions
shipowner a defence against
circumstances, the shipowner went so far as
liability for damage caused
may feel that he should not be
to make the
by negligent navigation and
blamed for the damage, as his
management of the ship.
vessel was in good condition shipowners
liable only for
These regulations were further
and the cargo was secured as
developed in the Hague and
well as it could be. As shall be
the collection of
the Hague-Visby Rules, in
shown below, he may find that freight."
which the shipowner was given
he has a hard time succeeding in
his efforts to avoid liability. However, it is not a ‘catalogue’ of defences, one of them being
impossible, and, in certain legal systems, it is ‘Perils of the Sea’.
even quite feasible.
‘Perils of the Sea’
Background
Historically, the shipowner was strictly liable for
damage to the cargo. During the 19th century,
they started to insert clauses into the contracts
whereby they were relieved of liability to a large
extent. ‘The exclusions went so far as to make
the shipowner liable only for the collection of
freight’, (SOU 1990:13).
At this time, England had a strong shipowning community, whereas a large number
of cargo owners were to be found in the U.S.
Possibly as a consequence of this, the matter
of carrier liability came to be interpreted differently, with the U.S. courts being inclined
to overrule the exclusion clauses inserted by
the shipowners. This difference still exists to
a certain extent.
A compromise was reached in the U.S. in
14
Inchmaree’ case of 1887, it was clarified that
this exception only covers liability for damage
caused by dangers specific to the sea. This is an
important distinction, since weather damage
that could easily occur on land, such as rain or
lightning, is not covered. The most common
situation in which a carrier may be inclined
to invoke the defence is when the vessel has
encountered heavy weather during the voyage.
As shall be shown below, this is normally very
difficult to prove. However, there are certain
situations when the defence can be successfully
invoked against a claimant. For example, it can
be used to defend claims for damage caused
by the vessel running aground in fog, or by
collisions where the other vessel was negligent.
One should note that the carrier could also
invoke this defence against damage resulting
from actions taken to avoid a peril of the sea,
but not against normal wear and tear.
The basic obligation for the carrier, according
to the Hague and the Hague-Visby Rules, is to
exercise due diligence in making his ship seaworthy, both before and at the beginning of the
voyage. During carriage, he must also handle
and care for the goods properly and carefully.
Interpretations in certain legal systems
Provided that the carrier has been able to prove The interpretation of this defence differs
that he has fulfilled these obligations, the rules in one important aspect between different
give him a catalogue of defences.
jurisdictions and legal systems. The issue
Assuming the carrier can prove that the is whether this defence can be successfully
vessel was seaworthy at the beginning of used where the weather was harsh, but still
the voyage, neither the
foreseeable and expected
”It is not the level of
carrier nor the ship shall
under the circumstances
harshness of the weather
be responsible for loss or
of the voyage. In many
damage arising or resulting
that sets the limit but rather countries, the weather
from perils, dangers and
needs to be exceptional
the relation between the
accidents of the sea or other
and unexpected for the
expected weather and the
navigable waters. In the
defence to be applicable.
actions of the carrier.”
Since it is possible to forecast
S.S. EUROUNITY. The
”One can only invoke a
most weather situations, this
vessel encountered Beauperil of the sea when the
will limit the scope of the
fort 10-11 winds and
defence quite substantially.
10-11.5 metre waves
circumstances are of an
Very generally, it can be
extraordinary nature and during a winter crossing
said that U.K. and Australian
of the North Atlantic
cannot be avoided.”
courts have tended to allow
and suffered damage
the owner to discharge
to the cargo. The U.S.
liability in a wider range of circumstances. court did not accept that the carrier should
German, Scandinavian and U.S. courts have avoid liability by invoking the perils of the sea
only allowed the defence when the weather has defence. According to the court, one can only
been extreme and out of the ordinary for the invoke a peril of the sea when the circumstances
specific circumstances.
are of an extraordinary nature and cannot be
An example of a more generous applica- avoided. The conditions in this case were not
tion of the defence can be found in the recent unforeseeable for this particular voyage.
Australian case of the BUNGA SEROJA. The
The same thinking can be found in Gervessel experienced force 11 gales during a pas- many. The courts focus on the question of presage of the Great Australian Bight from Burnie dictability or what is foreseeable. The carrier
to Fremantle. Because of the severe weather, she may not invoke the defence against perils that
lost containers overboard and experienced dam- can be expected on each particular voyage that
age to a cargo of steel coils. It was accepted that a seaworthy and properly stowed vessel should
the vessel had been seaworthy before the voyage. be able to withstand. There is no comprehensive
The gale was forecast, and could be considered definition of the concept, since it depends heavnormal in the circumstances. The court still ily on the circumstances in each particular case.
allowed the carrier to invoke the defence and However, it is not enough for the peril to be
argued that in principle, the decisive factor is unusual. It must be impossible to foresee under
whether the carrier has exercised due diligence the circumstances.
to avoid the consequences of the perils of the
The phrase ‘peril of the sea’ has been
sea. In this way, it is not the level of harshness removed from the Scandinavian Maritime
of the weather that sets the limit but rather the Codes. The issue has, however, been raised in
relation between the expected weather and the several recent cases when the carrier has tried
actions of the carrier.
to avoid liability by proving that he has not
The opposite approach was adopted acted in a negligent manner. For the carrier
in the U.S. in the case of Thyssen Inc. v. to be able to succeed in invoking the perils of
the sea defence, the weather must be extremely
rough. The courts concentrate a great deal on
the level of the wind and whether it was possible
to foresee the conditions. From previous cases,
one can draw the conclusion that there should
be winds in the region of Beaufort 11-12 before
the courts consider allowing the carrier to avoid
liability.
Conclusion
In most legal systems, the carrier may be able to
avoid liability for cargo damage caused by perils and dangers specific to transporting goods
at sea. The idea behind this is that the owner
of the cargo should carry some of the risk, as
the shipowner is putting his vessel in jeopardy
for the common good. In theory, this defence
would seem to be quite extensive and to cover a
large number of possible claims. In certain situations it will, in fact, allow the carrier to avoid
liability. However, in most situations when a
carrier might try to rely on this defence, it is
of little or no value. In most legal systems, the
courts focus on the level of heavy weather. They
demand that the conditions have to have been
exceptional and impossible to predict under
the circumstances. For the carrier, it is almost
always impossible to prove this. The position in
the U.K. and Australia is different, allowing the
defence to be invoked in a wider set of circumstances. The reason for this difference could
possibly be traced back to the historic relations
between shipowners and cargo interests on the
Atlantic trade route during the 19th century.

15
The Forces of
Peter Stålberg
DIRECTOR
  At the beginning of June 1998, a tropical
depression started to develop over the Arabian
Sea outside the west coast of the Indian continent. Feeding on hot humid air, the low pressure soon developed into a full tropical cyclone.
The cyclone was spotted near the Lakshadweep
Islands by the meteorological institute on June
4th and monitored as it moved north towards
the coast of Gujarat. It was heading straight
for Kandla.
By the morning of June 8th 2002, danger
signal eight (wind speed exceeding 30 m/s)
was issued specifically for Kandla port. During
the day port officials went on board all vessels
in the harbour, informing them about the bad
weather that was expected and that precautions
should be taken to ensure that all vessels were
safely moored. Some masters certainly became
worried and wanted to leave the port but they
were calmed by the officials who assured them
that Kandla was an extraordinarily safe port, a
good distance from the open sea and that they
had experienced conditions similar to what was
expected without any problems. That same
night, the district administration of Kutch
was specifically and urgently informed of the
cyclone coming their way.
It was early morning on June 9th when the
crew on the M/V SURPRISE watched with
apprehension as the sky grew dark. There was
a rumble of thunder and the wind had started
to pick up. This was, after all, normally a time
of cloudless skies in the sweaty, busy port of
Kandla. At 10.30 am all hell broke loose – a
fierce, driving rain began to lash the vessel with
a force 12 wind that blew in from the sea and
howled like a million souls in agony. Along the
berth shore cranes were tossed like confetti and
the air was filled with debris from buildings
and shacks that were literally blown apart. The
mooring lines, or perhaps it was the 100 metric tonne shore bollards, broke and the vessel
drifted away from the berth as a ten meter high
freakwave rolled through the port.
Almost all vessels in the port, including a
floating dock with a vessel inside, broke their
moorings and drifted aground. Multiple collisions occurred instantly and within minutes
floodwaters swept up the harbour basin and
submerged the marshland.
16
Upstream along the creek, on the treeless
saltpans, hundreds of locals were working
at harvesting the white gold from the ocean.
When the rain started, and without knowing
a cyclone was brewing, they took shelter in
their makeshift shacks. The water was rising
and there was nowhere to escape – only a few of
them could swim.
The official figures put the death toll at
600, plus 100 missing, but the figure, as rescue
workers and reporters confirmed, was a gross
understatement. It was suggested that over
2000 people had died, most of whom were
probably swept out into the ocean. With a
mixed religion of Hinduism, Buddism and
Christianity, the officials could not make up
their minds about what to do with all the dead
bodies – some had to be buried and others had
to be cremated, but who could tell? After some
discussions, and when the smell of dead bodies
had become almost unbearable, it was decided
to cremate all the corpses.
The Swedish Club had two vessels, M/V
SURPRISE and M/V CLIPPER KAWA in
Kandla at the time of the disaster. The SURPRISE was safely aground, on the marshland,
together with three other vessels, on the other
side of the harbour opposite the commercial
berth.
CLIPPER KAWA had disappeared and was
nowhere to be found. We were told that a vessel
had been spotted some ten nautical miles up the
creek way up in the saltpan area. After a twohour ride on a local fishingboat up the narrow
creek we spotted the vessel. She had sustained
collision damages and the engine room and the
no. 4 cargo hold were flooded. On deck one of
her gantry cranes had collapsed and the other
one was totally distorted. As it was deemed
not economically feasible to salvage and repair
the vessel she was declared a constructive total
loss.
With some 15 vessels aground in the port,
surveyors and lawyers soon flocked to assess
the damages and sort out what had happened.
Could anybody be blamed? In a little while it
became evident that no individual vessel could
be held responsible. This was an act of God or
perhaps, more appropriately, simply the forces
of nature!

Just about all vessels in the port stranded.
CLIPPER KAWA was declared a constructive total loss.
Nature
Shore cranes were tossed like confetti.
Widespread devastation in Kandla town.
PHOTOS: THE SWEDISH CLUB
17
Club Information
PHOTO: LENA BRYNGELSSON ©
The Publications Group
  The Swedish Club’s Publications Group consists of Susanne Blomstrand, Annelie Fellbom and Petra Setterberg. It was formed in 1999 following the Club’s decision to centralise responsibility for all publications
and marketing material within one unit. One primary objective was to
provide The Swedish Club with a consistent graphic profile world-wide.
Prior to 1999, different departments and the various offices produced
the Club’s publications, stationery and other marketing material and
consequently, material tended to differ in appearance and the production
process lacked coherence.
These activities are now managed by the Publications Group’s threestrong team, who oversee print production and deliver a consistent graphic
profile for all materials produced by the Club’s head office, liaison offices
and other external parties, together with information distributed to Club
members. The Publications Group has now been in existence for almost
four years and now produces almost all publications in-house. When
this is not technically or otherwise possible, the Group co-ordinates the
production, thus getting a total overview of the production process. This
way of working, centralised and as a unit, has proved to be both efficient
and cost-effective. Below you will find some of The Publications Group's
main responsibilites.
Susanne Blomstrand, Publications Co-ordinator
Direct tel +46 31 638 439
Main responsibilites: List of Correspondents and Rules
Annelie Fellbom, Publications Co-ordinator
Direct tel +46 31 638 459
Main responsibilities: The Swedish Club Letter, Stationery
From left to right: Susanne Blomstrand, Petra Setterberg and Annelie
Fellbom.
Petra Setterberg, PR and Marketing Co-ordinator
Underwriting & Marketing Department
Direct tel + 46 31 638 490
Mobile +46 706 788 720
Main responsibilities: Marketing, PR, The Annual Report and website
List of Correspondents
The List of Correspondents
is updated and published
annually after the P&I
renewals and is completely
produced in-house.
Staff Directory
Rules for P&I Insurance/Rules for
FD&D Insurance
Loss Prevention Fact Sheets
These informative fact sheets were originally
produced in the beginning of 2001. The fact
sheets are continously updated and are completely
produced in-house.
Annual Report
The Annual Report is published at
the end of May/beginning of June
each year, and is a pure in-house
production.
The P&I / FD&D Rules are updated and published
annually in connection with the P&I renewals and
is completely produced in-house.
The Swedish Club Letter is the Club’s main
publication for members, shipboard staff
and business contacts. Most articles contain
loss prevention messages, together with
recommendations, advice and information
on legal developments, etc. General Club
information, including staff news and social
events,is also found in the newsletter. The
majority of articles is written by the Club’s staff,
however external help is used concerning the
layout.
Website: www.swedishclub.com - The Swedish Club's website is completely managed in-house.
18
Published for the first
time in the beginning
of 2002 and is a pure
in-house production.
Global
warming
taken
seriously
Dr Anselm Smolka, Head of Geological/Geophysical Risks
at Munich Reinsurance Company in Munich, was one of the
speakers at The Swedish Club's AGM held in Göteborg, June
12th-14th.
  The events of September 11th 2001, have
had a profound impact on the international insurance community. The rising cost of natural
catastrophes, however, offers a challenge of even
greater magnitude to the world’s insurance majors. In his address to delegates attending the
Club’s Members’ Day in Göteborg on June
13th, Dr Anselm Smolka, Munich Re’s Head of
Geophysical/Geological Risk Research, painted a sober picture. He reviewed a trend already
prompting the majors to take a fresh look at the
fundamentals of loss prevention.
Dr Smolka began by outlining the statistics
behind the steady increase in natural disasters
producing huge insurance losses. In recent decades, the number of events producing economic
losses greater than USD 100 million has risen
by a factor of three, while economic losses as
such have increased by a factor of 7.7 and insured losses by a factor of 14.3.
In his assessment of underlying causes, Dr
Smolka said: “The important changes behind
dramatic increases in the frequency and size
of losses include a general rise in population,
higher standards of living, the concentration
of populations in large conurbations and the
settlement in, and industrialisation of, extremely exposed regions. Furthermore, modern society is more susceptible to damage from
natural hazards and, in addition, we now face
new and adverse environmental conditions,
including global warming.”
He made his point by showing a photograph
of Miami Beach in 1926; it was virtually undeveloped at that time. Today, Miami Beach is
certainly developed, despite its obvious vulnerability to hurricanes. Other examples include
the gigantic mudslides which have caused havoc
in the coastal strip adjacent to Caracas, Venezuela, in December 1999 and the August 1999
earthquake which levelled large areas around
Izmit, Turkey. This city was also struck by a severe earthquake in 1894, but the damage – and
loss of life - was on a much smaller scale.
The continued colonisation, industrialisation and development of vulnerable regions
is a matter of concern to all insurers, said Dr
Smolka. In this context, he noted the special
vulnerabilities of ports and harbours. He then
demonstrated the fragility of modern society
by citing the example of the September 1999
earthquake in Taiwan. The major power - consuming centres of the island are located in the
north, while the main power stations are in the
south. The earthquake brought down national
power transmission lines and, as a result, caused
extreme economic dislocation.
Dr Smolka has some firm views on climate
change: “There is no doubt that this has major
significance for the insurance industry, given
increasing weather variability and extremes.
These translate into new risk exposures. Hurricanes, for example, require a sea surface temperature of at least 27°C. in order to sustain
their strength. As a result of global warming,
sea areas with such temperatures increase year
by year. Not surprisingly, the rise in the number
of extreme weather events has produced sharp
growth in the demand for natural hazards
cover.”
Is global warming a myth? Dr Smolka
doesn’t think so: “In the period 1961-90, the
average summer temperature in Central England was 15.3°C. In 1995, the figure was 17.3°
C. – a very warm summer! Climate models now
suggest, however, that warm summers will become more frequent, with Central England’s
average summer temperature by 2050 rising
to 16.9° C. The exception, in other words, will
become the rule.”
Referring to September 11th, Dr Smolka
said that the aftermath of the World Trade
Centre disaster and the other attacks had
revealed many previously hidden exposures,
including multi-branch losses. September 11th
may involve insurance costs of some USD 40
billion, with material damage accounting for 22
per cent, business interruption, 20 per cent, life
insurance, 15 per cent and workers’ compensation, 11.5 per cent. Dr Smolka observed: “There
is no doubt that September 11th has prompted
a greater willingness to consider the possibility
of more extreme events - both man-made and
natural.”
In considering the insurer’s response, Dr
Smolka said that insurability centred on three
issues: risk assessment, risk control and risk reduction. He underlined the importance of risksharing – the ‘risk partnership’. The success of
this strategy hinged on two questions:
• How to finance losses?
• How to prevent or at least reduce losses?
He told the Club’s members: “There must
be adequate premiums and substantial deductibles. More prominence will be given to liability
limits and exclusions – especially in relation to
natural hazards and the risks of particularly
exposed areas. We will need more effort and
innovation in the area of loss prevention. ”Following his address, Dr Smolka added: “There
has been a dramatic increase in losses from
natural catastrophes and some risks, in some
circumstances, will become uninsurable unless
action is taken. We need new and practical
measures to achieve risk reduction and prevention. The advances made in the fire sector show
just what can be achieved. After all, insurers
are very efficient risk managers. Attitudes are
bound to harden concerning the development
of flood plain zones, for example. Strategies will
be linked to climate change. Almost certainly,
climatic conditions 50 years from now will
support a dramatic increase in extreme weather
events. One important loss prevention function, of course, is better communication, to
increase awareness through structured public
education.”

19
New concepts in cruise
  Nils G. Nordh, who became a member of The Swedish Club’s
Board on June 12th, is a prominent figure in the international cruise
shipping sector. He has spent the past five years with Star Cruises of
Malaysia, where he is Executive Vice President, Marine Operations and
Newbuildings. Over this period, Star Cruises has continued to build
profile as a major operator, with a large fleet and over 16,000
employees. The group now consists of Star Cruises, Norwegian
Cruise Lines and Orient Line, with a combined fleet of 20
vessels.
New member
Nils Nordh’s association with The Swedish Club goes
of The Swedish
back a long way: “I first got to know the Club some 28 years
Club’s Board
ago, when I joined Red AB Transatlantic in 1974. Most of the
vessels were with The Swedish Club. My personal dealings with
the Club have been maintained over the years and, today, Star Cruises
has a substantial portfolio with the Club. Over this long period, I have
retained my view of the Club as a provider of good service, especially
when it comes to claims handling and loss prevention - areas where it
excels. At present, we have 18 vessels placed with the Club for Hull &
Machinery cover. Much of the Asian fleet’s Protection & Indemnity is
also with the Club.”
In 1982, Nils Nordh joined Trans Ship Management AB and was
Managing Director until 1990. During the following year, he became
Senior Vice President of Marine Operations for Miami-based Royal Caribbean Cruise Line. He recalls: “The telephone rang in the middle of the
night. The caller was a U.S.-based headhunter, picking up on a rumour
that I was looking for a new challenge. He was right. At that time, the
organisation had two operating companies, Admiral Cruises and Royal
Nils Nordh
Making plans for
20
Mr Nils G Nordh, Executive Vice President, Marine
Operations and Newbuildings at Star Cruises in Malaysia.
  Suay Umut, Chairman of Dünya Denizcilik ve Ticaret A.S., became
a Member of The Swedish Club’s Board on June 12th. His company is
one of Turkey’s leading tanker shipping operators, with a fleet totalling
399,235 dwt. He has a long-standing relationship with The Swedish Club.
All vessels in the Dünya Denizcilik ve Ticaret fleet are entered with the
Club for Hull & Machinery cover. Many are also entered for Protection
& Indemnity.
Suay Umut graduated as a marine mechanical engineer and opened
his career with four years at sea. In 1963, he joined state oil company
Petrol Ofisi as an engineer. Later, he established the company’s shipping
arm – purchasing five tankers and commissioning six newbuildings from
Turkish yards.
His career took a new turn in the early 1970s: “I left my post as Deputy
General Manager in 1971 and struck out on my own. I decided to base
myself in London. Within two years, I had established my first company
and went on to set up Ganmount Oil Trading – which remains active
today under the name Ganoil.”
These ventures were successful and in the early 1980s Suay Umut was
in a position to purchase a number of handysize product tankers from
Exxon. Ganmount Shipping was established to operate the ships. This
company is now known as Ganship International, representing Dünya
Denizcilik ve Ticaret in London. The latter was set up in the mid-1980s,
to operate the five vessels in the Ganmount Shipping fleet under the
Turkish flag.
Suay Umut lived in England for over 25 years. He says: “Life in
London was rather unfamiliar at the beginning, with my morale not
shipping
Caribbean. The intention was to integrate these enterprises and create a
common culture. Initially, I was minded to reject the offer from Royal
Caribbean. In the event, I changed my mind and enjoyed seven happy
and satisfying years with the company. Then it rang again…”
Star Cruises caters for a distinct market with special characteristics
not applicable elsewhere in the global cruise market. Nils Nordh explains:
“We have a very young cruise product serving the Asian market. It is only
eight years old, although it is already No. 4 in the world, with 20 vessels
and a newbuilding programme. In many ways, it is a unique venture. I
have been fortunate to enjoy five very challenging years. Our newbuilding
programme consists of four large vessels and the final ship in the series
will be delivered at the end of this year. The future looks just as exciting,
as we consider options for continuing our heavy expansion into China.
We are evaluating concepts for vessels in the 50,000 tonnes range for this
market, together with vessels of 90,000 tonnes for the U.S. market.”
Freestyle strategy
conventional one or two-week cruises that are traditional in other parts
of the world. Our cruise concept is the ultimate logistics challenge. The
solution is to own the terminals, an unusual policy in the cruise shipping
sector.”
In addition to his demanding role within Star Cruises, Nils Nordh is
the active Chairman of a number of Boards, including Dynamar B.V. in
The Netherlands, a leading provider of transport and shipping company
information. He played a major role in the establishment of Dynamar in
the early 1980s. Over the past five years, this company has made notable
progress in building its client base amongst the major banks, container
lessors and law firms.
Not surprisingly, leisure time is at a premium. Nils tries to get out on
the golf course at weekends. He also enjoys reading. Nils is married to
Ingrid and has two sons. One recently graduated in Business Administration and IT and now works for Norwegian Cruise Lines. The younger
son, aged 22, is studying civil engineering.
The strategy of this vigorous group is described as ‘freestyle’. Nils Nordh
Strong views on safety matters
says: “In Asia, we don’t have the concentrated shipping environment of Nils Nordh is a frequent speaker at international conferences. He adds:
Scandinavia and, in the cruise industry context, the concentration present “I do have some strong views on safety issues and I often speak on this
in Miami. In a sense, this has helped, as it has encouraged us to develop a subject. Star Cruises’ vessels have the latest nautical equipment, including
distinct style which is flexible and open to change. Typically, our projects ‘black boxes’. Star Cruises is also the only cruise shipping group in the
have very short lead times. We also cater for a market with quite different world to operate its own simulator. We also maintain constant on-line
vacation patterns to those prevailing in the West. Our cruises are struc- contact with the ships. If a problem arises, it is possible to use the ship’s
tured to allow vessels to embark and disembark passengers in a series of video camera systems to examine and monitor the situation in real time.
ports, during an intensive sailing schedule. Many join our vessels for just I have no doubt that, in future years, the cruise industry as a whole will
one or two days, to refresh themselves, rather than commit to the more work closer together on safety issues. There is a lot of value in defining
and applying best practice.”
tanker newbuildings
encouraged by the British weather. Britain, however, provided a highly
stable business environment. Gradually, things became easier. Where
did the years go? My child started school in England and it
didn’t seem very long before university was finished! By the
mid-1990s, however, I wanted to return to Turkey. Things
New member
changed dramatically over the 20 years to 1995, with major
of The Swedish
improvements in the economic climate. This has promoted
Club’s Board
change in the dynamics of oil trading and it made sense to
return to Istanbul – my home city.”
The Dünya Denizcilik ve Ticaret fleet now consists of nine vessels,
primarily engaged in the products trades. The ships include the five
double-hulled newbuildings. Two were delivered in 2000 and the
remaining three joined the fleet during the course of last year.
Future plans will involve a new phase of fleet renewal. Suay Umut
says: “The single-hull ships will be replaced by double-hulled newbuildings. We are now talking with various yards and hope to reach decisions
by the end of the year.”
Suay Umut retains his close business and social ties with Britain: “I
still have offices in London and a London home. I visit England around
half a dozen times every year.” In his leisure time, he enjoys sailing in
the summer and walking and other exercise during the winter months.
“Exercise is very important to me. I had a heart transplant in the United
States two years ago and walking is a fine exercise regime – not too strenuous but enough to keep me fit.”

Suay Umut
Mr Suay Umut, Chairman of Dünya Denizcilik ve Ticaret A.S. in Turkey.
21
FUNKY BUSINESS
in Dr Nordström’s New Wave New World
  New and powerful forces are now at work
in society, changing the way people live their
lives and do business. Using a carefully crafted
mix of observation, example and wit, Dr Kjell
A. Nordström, of the Institute of International
Business, analysed these forces in a presentation
during The Swedish Club’s Members’ Day.
Dr Nordström, based at Stockholm’s School
of Economics, began with a startling premise:
“Karl Marx is back”, albeit in a new guise. He
claimed: “In modern business organisations
– from Nokia of Finland to Sony of Japan – up
to 90 per cent of the work done is intellectual
in character. This has transformed ownership
structures. We are shifting rapidly from the
traditional pattern – from the owners of
capital to the owners of intellectual capital.
Ten years from now, Nokia will be up to 40
per cent owned by its employees. Every year,
option programmes continue to dilute capital
ownership.”
all aspects of life, including politics, education
and commerce.”
New rules and behaviours
This new socio-economic landscape is rich
in new rules and behaviours. Dr Nordström
observed: “One dimension of the landscape
is ‘Superstar Economics’, under which No. 1
takes all. In sport, the arts and business, there
is little room for No. 2 and the other also-runs.
What counts is to be No. 1 or, at least, to have a
firm expectation of being No. 1. Is this good?
Is this bad? These questions are irrelevant. The
situation is what it is!”
In this globalised society, populated by
individuals, the unit of analysis is changing.
Traditional households have less relevance in
urban communities dominated by ‘singles’. Dr
Nordström commented: “The old maps still
fill our minds but the realities are different.
Family, household and nation state are increasingly irrelevant. Nations, for example, have lost
control of their multinationals.”
Bowling alone
The new unit of analysis is the ‘tribe’. Dr
Key individuals with exceptional intellectual
Nordström said: “We are creating tribes. Hell’s
or other gifts enjoy dominant positions in this
new hierarchy. The music business provides an Angels are the same the world over… as are pop
fans. They think the same way and their conobvious model: “Today, a big star owns all the
sumption patterns are identical worldwide.”
rights. What does the record company bring to
Technology may drive change but Dr
the table, other than the ability to offer a little
Nordström is scathing about the significance
service by way of distribution?”
of the Internet as a competitive force. He said:
Dr Nordström moved on, introducing his
audience to the concept of ‘bowling alone’. In “The Internet will never, ever, for any company
in any industry, or for any product or service,
the immediate post-war years, American men
(together with a few women) often went bowl- provide any competitive advantage. The Intering together after work. The tradition contin- net is an element of infrastructure and nothing
ues to this day, but with two important differ- more – just like water, sewerage, electricity and
ences. Firstly, there are more women bowling. telecoms. There is no competitive advantage in
having what everyone else has.”
Secondly, and more importantly, both men
and women bowl alone, rather than in social
Commercial promiscuity
groups. This is a symptom of the new, superIn the 1950s, the pharmaceutical industry
personalised society, centred almost entirely on
the individual: “We are busy ‘building down’ introduced the contraceptive pill, prompting widespread sexual promiscuity. This was
to the singles society and, therefore, do fewer
things together. This is true of Europe in gen- a dramatic change in human behaviour. Dr
Nordström said: “Today, the Internet is the
eral and Scandinavia in particular. Individuals
global business community’s equivalent to
living alone now account for some 62 per cent
the pill. It exerts a downward pressure, by inof households in Stockholm, for example, and
this figure continues to increase. In today’s so- creasing fi xed costs without an accompanying
competitive advantage. In short, it encourages
ciety, the three biggest-selling pharmaceuticals
commercial promiscuity. You can shop around
are Losec (the No. 1 treatment for stomach
for lower cost.”
ulcers), Prozac (to treat depressive illness)
Dr Nordström then placed his remarks
and Viagra (needing no explanation). The
into a human context, by examining the
new society is gaining strength in major cities
impact on institutions. He said: “Institutions
around the world and this has implications for
22
are human contracts. Marriage is
a human contract, as is Christmas
– which could be moved to April
with ease if everyone decided this
would be advantageous. New
human contracts are now applied
and internationalism is irreversible.
Political forces campaigning for an
end to immigration are irrelevant,
for this very reason. The Le Pen
argument is as pointless as getting
angry about gravity.”
He continued: “There are now
22 ways of creating a child. There
will be 50 ways in five years’ time.
The new society is about choice
and freedom, with individuals behaving like
the multi-millionaires of old. There are now
247 varieties of Sony Walkman, 504 Business
Schools in Europe and 17,500 different funds
to chose from. The applicable economist’s term,
‘lower switching costs’, is having dramatic
consequences for the provider-customer relationship.”
Average a dismal concept
This is a society regarding ‘average’ as a dismal
concept: “We have a world in which average
singers don’t work and no-one attempts to
launch an average beer! This society is made of
glass and its extreme transparency makes politicians feel extremely uncomfortable. This is a
crucial issue – ethical behaviour is now a good
bet. It makes commercial sense, as the price of
unethical behaviour is too high.”
Innovation is another critical factor.
Dr Nordström said: “Success is not about
competitiveness, but exactly the opposite. It
is about creating and defending temporary
monopolies. Innovation can create a temporary
monopoly. Innovation, however, is ubiquitous
and, therefore, is no longer sufficient to
guarantee success. Recent successes, emerging
over the past ten years, came from nowhere.
Absolut Vodka is an example. Dell didn’t exist
Dr Kjell A Nordström from Stockholm School of Economics talked about ‘Funky Business’ at The Swedish Club's Member's Day in Göteborg June 13th .
15 years ago. How did Ryanair increase profits by
30 per cent while most other airlines struggled
to survive? Each adopted one or both of the
new success strategies – models (including the
creative destruction and reconstruction of the
organisation) and moods.”
power of ‘attraction’. He said: “Companies
now play the attraction game and with very
good reason.”
Finishing his presentation, Dr Nordström
added that, overall, he was optimistic about
the future: “Never have so many people lived
within democratic societies. Never have so
The tribe of bankers
many people had an opportunity to lead a deConcerning mood, Dr Nordström used the ex- cent style of life.” Yet, at the same time, surely
ample of an attractive female classical violinist, some aspects of the new society are depressing
clad in an unusually revealing dress. A familiar – not least the fact that so many people now live
activity is presented with a new mood, so creat- alone? Dr Nordström told The Swedish Club
ing a highly effective temporary monopoly con- Letter: “I am optimistic for 350 days of the year.
structed from aesthetics. “One day, of course, I have the freedom to build my life, cafeteriathe new factors of ethics, functionality and
style. All it takes is the intellectual and physical
aesthetics will no longer be entirely sufficient
stamina to exploit this freedom.”
for success.”
According to Dr Nordström, the principles
Curiosity cannot be boxed
of current evolution are best demonstrated
Is the ‘individualised society’ the inevitable
by the ‘tribe’ of investment bankers: “They
outcome of technological innovation? “I
look the same and think the same worldwide. don’t think so, but I am a determinist in
The sole remaining factor available to create
the sense that technological innovation is
a temporary monopoly – in effect, a niche
linked to human curiosity. The point about
– is the client relationship. Suddenly, the ‘soft’ technological development is that it cannot be
stuff in business has become the ‘hard stuff ’. confined. We cannot say that, as there are now
Success may simply boil down to the answer 22 ways to make babies, there should not be a
to a blunt question: Do you like that person?” 23rd. Human curiosity cannot be boxed, as the
In conclusion, Dr Nordström considered the
boxes available to us have no lids.”
Switching costs may be lower, but what
about the limited access to No. 1? Dr Nordström said “We are talking about very small differences – just one or two per cent on the key
performance indicators. The obvious parallel
is that of the athlete who, with supreme effort,
highly favourable conditions and sheer luck,
breaks through the barrier and shaves a fraction of a second from the existing record. What
counts here is perception, or ‘attraction!’”
When people lose the context of family
and country – the very fabric of the traditional
sense of belonging – can they be happy? Dr
Nordström said: “There is a sense of loss accompanying all change. Again, perceptions are
important. For our parents, success was measured by material progress – a better job, more
money, a bigger car and a bigger house. These
‘units of analysis’ were applied to the children…
to us. For this reason, we didn’t become what
we were meant to be but, rather, the people we
were expected to be. Perhaps the new freedoms
outweigh the price and will allow our children
to become what they were meant to be. I have
a three-year-old son and I certainly hope that
this is so, although the jury is still out!”

23
The Mutual Cup Sweden vs Greece International - June 12th 2002
Back row: Mr Chris Goumas, Mr Christer Ekström (referee), Nick Adams, Magnus Axelsson, Mr Spilios Fassois, Peter Carlsson, Mr Matthew Warren, Gert
Josefsson, Mr Costis Constantakopoulos, Per-Erik Jornert, Mr Stephanos Lekanidis, Tony Schröder and Tord Nilsson.
Front row: Mr Keith Jones, Peter Elvingsson, Jens Huzell, Claes Åman, Henrik Lind and Clas Rydén.
Greek team win halts
Sweden’s victory run
Greece International’s Mr Spilios Fassois displays the new
Mutual Cup trophy - a bronze football boot.
24
Football fever has captivated the attention of millions
as the five continents battle to lift the golden World
Cup trophy in Japan. Dedicated football fans need
not wait another four years for the 2006 tournament
to witness such international spirit. The Swedish Club
holds its own football competition - the ‘Mutual Cup’every year.
The traditional match took place on June 12th between Sweden and Greece International - consisting
of staff from the Club’s Göteborg office and a mix of
international Club staff and members, respectively.
This year’s game provided 40 minutes of tense, nailbiting entertainment, as Greece International successfully battled to bring an end to Sweden’s three
consecutive Cup victories.
Unfortunately for Sweden, Greece International’s
Tord Nilsson had obviously received some personal
training sessions from Brazil’s Ronaldo, putting away
an early goal in the first half and setting the tone for
the match. There was no let up in Greece International’s attacking pace in the second half, with two
more goals by Stephanos Lekanidis and Keith Jones.
Sweden failed to score, leading to a 3-0 result for the
Greek side.
Reflecting on his team’s failed loss prevention
tactics, Sweden’s Captain Jens Huzell said: “It was a
tough game. The youth of our team was no match for
our skilled opponents. Greece International played
with accurate passing and plenty of stamina. Young
legs are only an advantage when you are better organised!”
The Club’s annual football event, held the day
before the Annual General Meeting, is sponsored
by: reinsurance brokers AON Jauch & Hübener, of
Hamburg; brokers Marsh Marine & Energy, Göteborg; London-based Miller Marine and JLT Risk
Solutions; and Arion Enterprises of Piraeus.

Annual General Meeting Dinner - June 13th Radisson SAS Scandinavia Hotel Göteborg
Greeting the guests; Kathy and Frans Malmros with Mr
Clarence and Mrs Birgitta Dybeck.
Expectant! (l to r); Jan Rydenfelt,
Mrs Helena Olsson and Chairman
Mr Christer Olsson.
Between courses (l to r); Mr Olle Noord,
Mr Christo Anagnostou, Peter Stålberg,
Mrs Christina Noord, Mr Ralf and
Mrs Angelika Gurzan.
Informal Dinner on June 12th
at Resturant 'Reveljen' in Göteborg
From left to right: Mrs Gunbritt
Patriksson, Fritiof Granberg,
Mrs Jill Southwood and Mr John
Samartzis catching the last rays
of the afternoon sun.
Three happy fellows (l to r) – Claes Lindh, Mr Paul Spencer and Mr
Dieter Berg.
At the informal dinner (l to r) – Mr Joe Balls, Ms Anne-Marie Svensson and Mr
Suay Umut.
25
Sailing with ATHENE, Wilderness and The Swedish Club Grand Classic - June 14th 2002
The 2002 ’crew’ after a sunny day on board the ATHENE. Filled with joy, sprayed with saltwater and a fresh tan. A delicious lunch completed the day.
Playing the 'Kubb' – The yellow team consisting (l to r) of
Mr Anton Ahlebaek, Mrs Metteke de Boer, Gert Josefsson,
Mr Don Messick and Mrs Kirsti Ahlebaek.
One of the Friday’s events was sailing with the old
schoona ATHENE. Here, the crew is trimming the sails in
free wind off the Swedish west coast.
A busy broker – Mr Peter
Ahlås on the pond.
Happy winners of the team
competition; Björn Josefson, Mr
Björn Dahlström and Mr Andrew
Challacombe. Overall winner was
Fredrik Olsson.
Mrs Alice Wong trying archery in the Swedish wilderness.
26
The traditional golf event, The Swedish Club
Grand Classic, was played under sunny but windy
conditions. Above is Mr Matthew Warren, Lars
Landelius and Mr Nils G. Nordh posing for the
camera at the tee of hole No. 6.
PHOTOS: THE SWEDISH CLUB
STAFF NEWS
Anders Hultman joined the Club’s Loss Prevention &
Technical Department in June 2002, as Loss Prevention Support Engineer. This is a new position that has
been established to increase the Club’s achievements in
its commitment to reduce losses. Anders has previously
studied Engineering and Naval Architecture at Chalmers
University of Technology, Sweden.
Alf Persson has been appointed Manager of Personnel and
will start his employment with the Club in August. Alf
has a B. Sc in Social Sciences from Göteborg University.
He has also taken courses in Business Administration,
Psychology and Sociology from Göteborg University.
Alf worked as Personnel Manager between 1983-1989
and Deputy Managing Director between 1989-1997 at
Svenska Handelsbanken.
Bengt Israelsson retired from the Swedish Club in June.
He was employed in October 1983 and previously worked
as an auditor for the Club. Bengt held the position of
Manager of the Finance Department and his skill in
bookkeeping matters together with his carefulness has
been to invaluable use for the Club. We wish Bengt all
the best in the future and a happy retirement.
PHOTOS: LENA BRYNGELSSON ©
PUBLIC HOLIDAYS
when The Swedish Club offices are closed
HEAD OFFICE
SWEDEN
Emergency tel
+46 31 151 328
From July 1st 2002, Peter Stålberg (right) will
take over the position as Director of the Loss
Prevention & Technical Department and also
be part of the Club’s management team.
Clas Brantmark (left) says: “Time has come
for me to hand over the leadership of the Loss
Prevention & Technical Department to the
next generation. This process is in line with
the Club’s policy of management, which I
support wholeheartedly. In addition to being a
very competent professional, Peter has shown
strong commitment and dedication to the
Club. I am fully convinced that Peter will be
a good leader, and I wish him all success in
the future.
I will continue to work in the department
with technical support in Göteborg, and
look forward to serving the Club also in the
future.”
November 1st
All Saints' Day
GREECE
Emergency tel
+30 944 530 856
August 15th
October 28th
Assumption Day
National Day
HONG KONG
Emergency tel
+852 2598 6464
July 1st
Special Administrative
Region Establishment Day
Mid-Autumn Festival
China National Day
Cheung Yeung Festival
October 1st 2002
JAPAN
24 hour tel
+81 3 5442 5466
September 16
th
September 23
rd
Club Evening for members and associates in
Stockholm
October 14th
November 4th
The day following
Respect for the Elderly Day
The day following
Autumnal Equinox Day
Health and Sports Day
The day following Culture Day
August 26th
Late Summer Bank Holiday
UNITED KINGDOM
Emergency tel
+44 20 7397 4999
September 21st
October 1st
October 14th
CLUB DIARY
Club Evening for members and associates in
Göteborg
October 3rd 2002
November 1st 2002
Board Meeting in Kuala Lumpur
June 12th 2003
27
The Swedish Club Offices
HEAD OFFICE SWEDEN
Gullbergs Strandgata 6, P.O. Box 171
SE-401 22 Göteborg, Sweden
Tel +46 31 638 400, Fax +46 31 156 711
Emergency tel +46 31 151 328
GREECE
5-7, Agiou Nicolaou
GR-185 37 Piraeus, Greece
Tel +30 10 452 2397, Fax +30 10 452 5957
HONG KONG
Suite 6306, Central Plaza
18 Harbour Road, Wanchai, Hong Kong
Tel +852 2598 6238, Fax +852 2845 9203
Emergency tel +852 2598 6464
JAPAN
Suzuyo Hamamatsucho Building 5F.
2-1-16 Kaigan, Minato-Ku, Tokyo 105-0022, Japan
Tel +81 3 5442 5466 (24 hour tel), Fax +81 3 5442 5922
UNITED KINGDOM
100 Fenchurch Street
London EC3M 5JD, United Kingdom
Tel +44 20 7397 4950, Fax +44 20 7397 4951
Website www.swedishclub.com
28

The Swedish Club Letter

Transcription

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