Coronavirus Act 2020 - power to suspend port operations
Posted on 26th March 2020 at 16:35
The Coronavirus Act 2020 was passed in the UK on 25 March and largely brought straight into force, owners and charterers will want to be aware of the importance of this for port matters.
Lengthy and wide-ranging, the Coronavirus Act 2020 deals mostly with schools, health services, food supply, employment, pensions and other societal matters. It is therefore an unlikely place to find provisions that could affect international shipping.
But its Section 50 and Schedule 20 are precisely that.
These concern protecting the UK’s borders.
In essence, if the Secretary of State considers that there is a “real and significant risk” that, due to COVID-19, border force personnel will be depleted so security will be inadequate, (a) port(s) can be ordered to suspend operations and/or direct vessels elsewhere.
The initial duration of any such orders would be short - no more than six hours - but they can be renewed. All are expected and likely to be brief and temporary, but it is still unknown how COVID-19 will develop. Though any of its provisions can be ended sooner, and such a suspension period seems inconceivable, currently the only upper limit is the two year lifespan of the Act itself.
These brand new powers are potential touchpoints for many of the matters dealt with in our 30 January post, New virus, old issues.
Thus they might:
1. Affect valid tender of NOR, if for example as a result the vessel cannot reach the required location and/or is directed elsewhere;
2. Give rise to force majeure issues. Though, as noted, this will depend on the wording of the particular clause, government action of one kind or another is commonly included, albeit rarely precisely defined;
3. Engage clauses that either stop laytime or demurrage counting or confine it to half rate.
One of the examples we gave on 30 January has the latter effect for any delay consequent on difficulties due to an “order of any local authority”. But it is questionable whether wording confined like that would apply to these new provisions, all of which are strongly arguably powers wielded by national, or central, rather than local authority or government;
4. Perhaps, ultimately, give rise to frustration of the fixture, if it cannot be performed as intended because of the continued exercise of these powers.
Clauses that say what happens when some form of governing body, or administrative action, has become involved vary greatly. For example, in the "MUAMMER YAGCI", discussed in Sugar, Seizure & Stoppage which we posted on 7 May 2019, the relevant phrase was “government interferences”, and there was much consideration of the precise origin of the powers used, i.e. local or central.
With these new powers now in existence in the UK, and a very great likelihood of similar ones increasingly being applied in many other maritime nations, it is more important than ever to address this by tracing what local provisions are in play, who might use them and to what potential effect.
Parties should seek specific local advice on what powers are in existence, and if possible get some indication of how they have been used, so they can address all relevant fixture wording and as far as possible ensure that the measures they are considering:
(a) adequately address what might happen;
(b) strike a fair balance in terms of risk, and moreover
(c) do not disadvantage them by rote and sometimes haphazard application of standard or last done terms.
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