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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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- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- Borneo Indobara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Aditya Birla Group - India
- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Larsen & Toubro Limited - India
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- The University of Queensland
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Ind-Barath Power Infra Limited - India
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Ministry of Transport, Egypt
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Miang Besar Coal Terminal - Indonesia
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Formosa Plastics Group - Taiwan
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- Bharathi Cement Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Binh Thuan Hamico - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
- ASAPP Information Group - India
- New Zealand Coal & Carbon
- Mintek Dendrill Indonesia
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- Australian Coal Association
- Power Finance Corporation Ltd., India
- MS Steel International - UAE
- TeaM Sual Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- Energy Link Ltd, New Zealand
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- Parry Sugars Refinery, India
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Semirara Mining and Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Edison Trading Spa - Italy
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Toyota Tsusho Corporation, Japan
- Sindya Power Generating Company Private Ltd
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Timah Investasi Mineral - Indoneisa
- Indogreen Group - Indonesia
- White Energy Company Limited
- Minerals Council of Australia
- Coastal Gujarat Power Limited - India
- Iligan Light & Power Inc, Philippines
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Economic Council, Georgia
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Simpson Spence & Young - Indonesia
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- Central Electricity Authority - India
- Tamil Nadu electricity Board
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