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Wednesday, 02 April 14
CHINA: ARBITRATION CLAUSES IN BILLS OF LADING UNDER CHINESE LEGAL PRACTICE - SKULD
KNOWLEDGE TO ELEVATE
Successful incorporation of a charterparty arbitration clause into the bills of lading is not a straight forward matter under China jurisprudence and recently a Chinese maritime court dismissed the owners' motion to refer the case to arbitration, because it was held that the C/P arbitration clause incorporated into the B/L was not effective. Details of the matter are as follows. Key points following the legal decision are:
- Although the said B/L recorded on the front page that it was: "to be used with charterparty", there was no express statement in the bill terms for incorporating the arbitration clause from the C/P.
- The standard incorporation clause in the back page of the B/L could not constitute a valid incorporation of the arbitration clause under Chinese law and practice.
- If any C/P terms are to be recognised as incorporated then they would be those of the voyage charter to which the cargo receiver was a party - not the head time C/P. This is because the time C/P is in the nature of being primarily a leasing contract .
Facts of this case
The vessel owners concluded a time C/P as with a charterer. One of the rider clauses provided that English law shall be applicable, and a further clause provided that any dispute arising from the C/P shall be submitted to arbitration at the LMAA.
As part of her charter employment, the vessel carried a cargo of iron ore fines from South America to China. According to the B/L, the shipper South American and the receiver was a Chinese Steel Mill.
While on route the vessel was involved in collision with another vessel. The owners appointed salvors to conduct salvage, and concluded a LOF contract. General average was declared. The salvage was successful, and the Chinese Steel Mill (through its insurers) had to provide general average security to the vessel.
The general average apportionment of salvage costs to cargo was significant, and the Chinese Steel Mill commenced proceedings in China for an indemnity against the ship-owner. The owners raised objection to jurisdiction on the basis that the provisions of the time C/P, including the arbitration clause had been incorporated into the B/L, and thus was binding upon the Steel Mill. The expert opinion of English lawyers was put forward to confirm that the terms of the C/P were successfully incorporated in to the bills of lading, including the arbitration clause.
First instance trial before the Chinese Maritime Court
The Maritime Court dismissed the objection to jurisdiction for the following reasons:
- The case was about compensation of ship collision / general average salvage rewards. Hence, the case fell into the scope of the contract of the carriage of goods by sea.
- Although the said B/L recorded on the front page that: "to be used with charterparty", there was no express statement in the bill terms for incorporating the arbitration clause in the C/P. The standard incorporation clause in the back page of the B/L cannot constitute valid incorporation.
- Meanwhile, the C/P which the owner claimed was to be incorporated into the B/L was a time C/P between the owner and the charterer only. The C/P arbitration clause was only there for resolving the disputes arising from the leasing of the vessel. It was not an arbitration clause for purpose of carriage of goods by sea under the voyage C/P.
- The local Maritime Court, as the nearest court at the port of the destination of the said carriage contract, should have jurisdiction over this case.
Appeal judgment High People's Court
The owners then appealed to the High People's Court and the appeal court dismissed the objection to jurisdiction for reason that:
- Although it is stated on the face of the involved B/L that the said B/L should be used with the C/P, the said C/P to be used with B/L shall be the voyage C/P and not the time C/P to which the owner was a party.
- However, the C/P provided by the owners was a time C/P and there was also no record on the face of the B/L regarding the specific C/P concerned and no express acceptance to have the C/P arbitration clause incorporated.
Observation on this case and comment
Chinese courts hold a stringent view concerning the issue of incorporating the C/P arbitration clause into the B/L. In this case, a key issued appeared to be that the C/P terms sought to be incorporated came from the time C/P, instead of a voyage C/P.
It should also be noted that in 2004 the Qingdao Maritime Court also held that a time C/P is primarily a vessel leasing contract, and although it also has some clauses regarding transportation of cargo it is still primary a leasing contract which is very different from voyage C/P.
The Qingdao Maritime Court continued to say that the B/L relationship is different to the time C/P legal relationship, and because of the rooted difference in this respect, the time C/P arbitration clause cannot be incorporated into the B/L.
Although China is not a case law country, the reasoning of Chinese courts in this regard should be paid attention to for handling of other similar cases.
By Philip Peng
Hai Tong & Partners, Beijing
Source: Skuld / Hellenic Shipping
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Wednesday, 16 April 14
Q1 2014 : TERMS OF FREIGHT RATES THE PERFORMANCE IN THE DRY BULK MARKET HAS NOT MET THE HIGH EXPECTATIONS - INTERMODAL
This year the dates for the celebration of Easter will coincide for the Orthodox and the Catholic, so we are already seeing most people in the m ...
Tuesday, 15 April 14
NEWCASTLE SHIPPED MORE COAL WEEK ON WEEK
COALspot.com: In the week ended 07:00 hours 14 April 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensl ...
Monday, 14 April 14
SUB-BIT FOB INDO COAL SWAP FOR Q1' 15 DELIVERY CLOSED AT US$ 60.12 PER MT
COALspot.com: Indonesian coal swaps for average Q4’ 2014 gain on month and on week according to AsiaClear OTC coal swap's reports rele ...
Monday, 14 April 14
INDONESIA'S Q1 COAL PRODUCTION LITTLE CHANGED EVEN WITH PRICE DROP - INVESTOR DAILY
Indonesia’s coal production by volume in the first quarter remained little changed from the same period last year despite the decline in t ...
Monday, 14 April 14
API 8 CFR SOUTH CHINA COAL SWAPS GAIN FOR THE MONTH & WEEK
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries gained 4.61 percent month on month and closed at US$ 76.18 per mt as ...
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- Billiton Holdings Pty Ltd - Australia
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- The Treasury - Australian Government
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- Samtan Co., Ltd - South Korea
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- Energy Link Ltd, New Zealand
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- IEA Clean Coal Centre - UK
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- GVK Power & Infra Limited - India
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- Indian Oil Corporation Limited
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- India Bulls Power Limited - India
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- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
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- Independent Power Producers Association of India
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- Global Green Power PLC Corporation, Philippines
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- Ministry of Finance - Indonesia
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- Mercator Lines Limited - India
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- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- Power Finance Corporation Ltd., India
- Goldman Sachs - Singapore
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Miang Besar Coal Terminal - Indonesia
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Salva Resources Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- CNBM International Corporation - China
- Wilmar Investment Holdings
- Aboitiz Power Corporation - Philippines
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- Parliament of New Zealand
- Sojitz Corporation - Japan
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
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- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- Karaikal Port Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Edison Trading Spa - Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Rio Tinto Coal - Australia
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- Directorate Of Revenue Intelligence - India
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- The University of Queensland
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Ministry of Transport, Egypt
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Posco Energy - South Korea
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Savvy Resources Ltd - HongKong
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- South Luzon Thermal Energy Corporation
- Trasteel International SA, Italy
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- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Dalmia Cement Bharat India
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