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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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Sunday, 05 January 14
API 8 CFR SOUTH CHINA COAL SWAP FOR Q3 DELIVERY CLOSED $ 80.05, A $ 0.90 LOWER THAN Q1 PRICE
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery lost 1.40 percept day on day closed at US$ 80.95 per mt as o ...
Sunday, 05 January 14
CENTRAL BUREAU OF INVESTIGATION OF INDIA REGISTERS CASES IN CONNECTION WITH ALLEGED SUPPLY OF LOW QUALITY INDONESIAN COAL BY A PRIVATE COMPANY TO NTPC & NSPCL
COALspot.com: The Central Bureau of Investigation of India has registered two cases regarding alleged supply of low quality imported Indonesian coal ...
Saturday, 04 January 14
THE INDONESIAN GOVERNMENT TO DOWNSIZE ITS COAL PRODUCTION TARGET TO 400 MMT THIS YEAR
COALspot.com: Indonesia to downsize its coal production target to 400 million tons in 2014, lower than the production in 2013, which stood at 421 mi ...
Friday, 03 January 14
IN 2013 RBCT HAS, FOR THE FIRST TIME, EXPORTED MORE THAN 70 MILLION TONS OF COAL
COALspot.com: South Africa's Richards Bay coal terminal, the world’s largest single coal exporting terminal shipped 6.788 million tonnes of c ...
Wednesday, 01 January 14
COAL & OIL TO SET UP ANOTHER 1,600 MW POWER PLANT IN INDIA - VENKATARAMANI
COALspot.com: Dubai-based Coal & Oil (C&O) Group is planning to make additional investment of around US$ 1.61 billion to set up 1,600 mega w ...
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Showing 3926 to 3930 news of total 6871 |
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- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Holcim Trading Pte Ltd - Singapore
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- SN Aboitiz Power Inc, Philippines
- Australian Coal Association
- Ambuja Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Star Paper Mills Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- Essar Steel Hazira Ltd - India
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Dalmia Cement Bharat India
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- Minerals Council of Australia
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- Bulk Trading Sa - Switzerland
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- GMR Energy Limited - India
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- Coalindo Energy - Indonesia
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- SMG Consultants - Indonesia
- Kaltim Prima Coal - Indonesia
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- CNBM International Corporation - China
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- Thiess Contractors Indonesia
- Semirara Mining Corp, Philippines
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Parry Sugars Refinery, India
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Siam City Cement - Thailand
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- Commonwealth Bank - Australia
- Eastern Coal Council - USA
- Formosa Plastics Group - Taiwan
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- Maharashtra Electricity Regulatory Commission - India
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