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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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Friday, 07 March 14
INDONESIA TO PRODUCE 421 MMT OF COAL IN 2014
Coalspot.com: Indonesia finally agreed to increased 2014 coal output by as much as 6 percent to 421 million metric tons from its previous plan, a se ...
Friday, 07 March 14
US PRODUCED 19.4 MMST OF COAL IN PAST 7 DAYS, SAYS EIA
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.4 million short tons (mmst) of coal in ...
Thursday, 06 March 14
PANAMAX MARKET IS STRUGGLING IN BOTH HEMISPHERES - FEARNRESEARCH
Handy
The Handy/Supra market experienced a rate increase in the Pacific. The activity itself is not too big, but spot tonnage is clearing up and ow ...
Wednesday, 05 March 14
THE BIG BULKERS HAVE IN FACT WITNESSED SIGNIFICANT IMPROVEMENTS IN BOTH BASINS
The BDI continues to gain back some of the lost ground, although in reality there isn't a lot to celebrate abou ...
Wednesday, 05 March 14
LEAVE IT TO CAPES TO CHANGE THE DIRECTION OF THE DRY BULK MARKET - INTERMODAL
Chartering (Wet: Stable- / Dry: Stable+)
Leave it to Capes to change the direction of the Dry Bulk market. The big bulkers managed to drag the BDI ...
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Showing 3816 to 3820 news of total 6871 |
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- Global Business Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- Renaissance Capital - South Africa
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- Wilmar Investment Holdings
- Kideco Jaya Agung - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Mercuria Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- Formosa Plastics Group - Taiwan
- Singapore Mercantile Exchange
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Sakthi Sugars Limited - India
- IEA Clean Coal Centre - UK
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aditya Birla Group - India
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Agrawal Coal Company - India
- Romanian Commodities Exchange
- Makarim & Taira - Indonesia
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- Manunggal Multi Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- Africa Commodities Group - South Africa
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- GMR Energy Limited - India
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Planning Commission, India
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- SMG Consultants - Indonesia
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Mercator Lines Limited - India
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Central Java Power - Indonesia
- Marubeni Corporation - India
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- GVK Power & Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- PNOC Exploration Corporation - Philippines
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Oldendorff Carriers - Singapore
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- The University of Queensland
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
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