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Monday, 03 March 14
COSTS LIABILITY PASSING DOWN A CHARTERPARTY CHAIN - SKULD
 KNOWLEDGE TO ELEVATE
Provided that charterparties are on back to back terms, and the claim is successful, liability for costs incurred should be able to be passed down a charterparty chain. A technical issue will not be allowed to prevent such liability for costs being passed down a charterparty chain. This is illustrated by the recent case outlined below:
Occidental Chartering INC. V Progress Bulk Carrier Ltd (2012) EWHC3515
Background facts
This case involved a chain of charterparties.
- Precious Garnets Ltd (PG), Head Owners time chartered the MV Chada Naree to the Disponent Owners Occidental Services Corporation (OSC).
- OSC did not enter into a charterparty but instead re-let the vessel to a company within its corporation known as Occidental Chartering Inc (OCI).
- OCI time-chartered this vessel onto Progress Bulk Carriers (PBC).
- PBC in turn, sub-chartered this vessel onto CNAN.
At all times, the charterparties including the re-let agreement between OCI and OSC, were on material and identical terms. CNAN during the proceedings became divested of all its assets.
PG, Head Owners, commenced arbitration proceedings against OSC for a claim in damages against them for a breach of a safe port warranty obligation under the head charter. This claim succeeded in favour of the Head Owners and therefore passed down the charterparty chain including all legal costs initiated for recovery. During the entire arbitration proceedings there was no issue or dispute about the relationship between OSC and OCI as the arbitrators did not appear to draw a distinction between the two.
However, when the awards were handed down there were typographical errors on the written awards. The main issue arose in connection to the award between OCI and PBC. The party named as the claimants on this award was OSC and not OCI. This error lead to a technical dispute having to be resolved. It is noted that a distinction needs to be drawn between the initial claim for damages and the claim for recovering costs in pursuing the matter. The claim for damages to the vessel was not disputed. However, OCI's recoverability of costs from PBC was.
Position of the parties
The distinction between OCI/OSC was not foreseen at the time of the initial arbitration but PBC contended that OCI was not party to the charterparty chain and thus the recoverability for costs claim could not be passed down the chain via the Head Owners. PBC therefore argued that OCI had not incurred any liability for costs which could be claimed against themselves.
The Tribunal's award
The Tribunal was persuaded in favour of PBC's arguments and it published a second award which held that OCI were not entitled to recover the costs incurred in the head arbitration between OSC and PG.
Judgment by the Commercial Court of Appeal
OCI was granted leave to appeal the second award. The fundamental issue before Mr Justice Teare was to decide whether it is possible for a party to recover costs for a claim to which it had not been liable to pay to a third party. This case was fact specific and the judge felt that the Tribunal had not fully considered the background to the award i.e. that during the initial arbitration all parties had the intention of treating OCI and OSC as one.
Comments
The Appeal reaffirms the standard position that where there is a claim successfully being passed down through a chain of charterparties and where there was a break in the chain, this would not necessarily prevent the liability for costs from being passed down the chain. OCI was therefore entitled to recover all costs incurred from PBC including Head Owners legal costs, the legal costs of OSC for defending the matter as well as OCI's legal costs in pursing it in terms of the appeal.
Advice
If engaged in chartering, and using a possible "in-house" re-letting it is important to check that contractual chains are fully maintained, and there is an unbroken link down to the further sub-charterers of the vessel. That way, if a liability needs to be passed on the contractual chain, the risk of a "liability gap" are mitigated.
Furthermore it must be remembered that costs liabilities can only be passed on in successful claims, or face the situation similar to the Vakis T [2004] 2 Lloyd's Rep. 465 where it was not possible to recover costs up the line when the main claim itself was unsuccessful.
Source: Skuld / Hellenic Shipping News
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Monday, 10 March 14
THE FREIGHT MARKET WAS QUITE FIRM THIS PAST WEEK
COALspot.com: The freight market was quite firm this past week with BDI sharply increased by 22.65 pct week on week and closed at 1543 points, while ...
Saturday, 08 March 14
LETTERS OF INDEMNITY - SKULD
KNOWLEDGE TO ELEVATE
In today's trading market, owners are frequently requested to accept a letter of indemnity (LOI) in exchange for complying ...
Friday, 07 March 14
DRY BULK MARKET TO BENEFIT FROM CHINA'S GDP GROWTH TARGET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
With the dry bulk market freight rates finally making waves, China's aim of 7.5% GDP growth for 2014 mean once again positive news for the shipping ...
Friday, 07 March 14
RBCT, WORLD'S LARGEST COAL EXPORTING TERMINAL SHIPPED 1.78% LESS COAL MONTH ON MONTH
COALspot.com: South Africa's Richards Bay Coal Terminal (RBCT) the single largest export coal terminal in the world, shipped 4.487 million tons of ...
Friday, 07 March 14
INDONESIA SHIPPED 7% LESS COAL IN JANUARY 2014 COMPARED TO ITS DECEMBER EXPORTS
COALspot.com: Indonesia, the world 4th largest coal producer and the Global largest multi grade coal exporter shipped around $1.8* billion ...
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Showing 3811 to 3815 news of total 6871 |
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- Sindya Power Generating Company Private Ltd
- Grasim Industreis Ltd - India
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- Eastern Energy - Thailand
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Mercuria Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- Miang Besar Coal Terminal - Indonesia
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- Tamil Nadu electricity Board
- Coastal Gujarat Power Limited - India
- Deloitte Consulting - India
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- Xindia Steels Limited - India
- India Bulls Power Limited - India
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- TeaM Sual Corporation - Philippines
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dalmia Cement Bharat India
- Orica Mining Services - Indonesia
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- Posco Energy - South Korea
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- Chamber of Mines of South Africa
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- Kartika Selabumi Mining - Indonesia
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- The Treasury - Australian Government
- Meenaskhi Energy Private Limited - India
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Directorate General of MIneral and Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Goldman Sachs - Singapore
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- Meralco Power Generation, Philippines
- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- White Energy Company Limited
- Indika Energy - Indonesia
- Planning Commission, India
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Riau Bara Harum - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Maheswari Brothers Coal Limited - India
- Bukit Makmur.PT - Indonesia
- Vedanta Resources Plc - India
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Commonwealth Bank - Australia
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
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