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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, 24 February 14
DRY BULK MARKET TO IMPROVE OVER THE COURSE OF 2014, BUT OVERSUPPLY STILL AN ISSUE SAYS BIMCO'S CHIEF SHIPPING ANALYST
As a gruelling first quarter edges closer to the end, dry bulk ship owners are looking at an improved second quarter demand, which, coupled with slo ...
Monday, 24 February 14
INDONESIAN SUB-BITUMINOUS COAL SWAP FOR DELIVERY APRIL - JUNE 2014 SLIDES TO $ 58.60 PMT
COALspot.com – Indonesia, the world’s the largest exporter of the thermal coal's swaps for delivery April - June 2014 slide week ended ...
Monday, 24 February 14
Q1 2015 DELIVERY COAL SWAP CLOSED AT 2.62% HIGHER THAN Q2 2014 CLOSING SWAPS
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries lost 2.68 percent month on month and closed at US$ 76.20 per mt as on Fr ...
Saturday, 22 February 14
SHIPPING POISED TO RALLY AFTER SEVERAL WEEKS OF DROP
COALspot.com: The freight market was steady to firm with the dry bulk index up by 6.24 pct closing at 1,175 points week on week and the cape index w ...
Saturday, 22 February 14
POTEN RAISES THE QUESTION OF ACCURACY IN CALCULATING TANKER FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As the tanker market has grown in complexity over the course of the past few years, the question of whether the traditional methods of assessing rat ...
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Showing 3836 to 3840 news of total 6871 |
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- Baramulti Group, Indonesia
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
- Eastern Coal Council - USA
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Gujarat Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Barasentosa Lestari - Indonesia
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Directorate Of Revenue Intelligence - India
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- McConnell Dowell - Australia
- South Luzon Thermal Energy Corporation
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- Indonesian Coal Mining Association
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Wilmar Investment Holdings
- Kohat Cement Company Ltd. - Pakistan
- Attock Cement Pakistan Limited
- Bhoruka Overseas - Indonesia
- Singapore Mercantile Exchange
- Posco Energy - South Korea
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Savvy Resources Ltd - HongKong
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- ASAPP Information Group - India
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Meralco Power Generation, Philippines
- Bukit Makmur.PT - Indonesia
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Carbofer General Trading SA - India
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Kumho Petrochemical, South Korea
- The University of Queensland
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- MS Steel International - UAE
- White Energy Company Limited
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Edison Trading Spa - Italy
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- Economic Council, Georgia
- PNOC Exploration Corporation - Philippines
- Antam Resourcindo - Indonesia
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Planning Commission, India
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- Agrawal Coal Company - India
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Cement Manufacturers Association - India
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
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