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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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Sunday, 30 March 14
FREIGHTS FROM INDONESIA TO INDIA IS EXPECTED TO BE SOFT NEXT WEEK - REDDY
COALspot.com: The freight market dropped drastically and all sectors were affected severely.
The BDI was down by 14.13 pct and closed at 1, ...
Friday, 28 March 14
US PRODUCED APPROXIMATELY 18.9 MMST IN A WEEK - EIA
COALspot.com – United States the world's second largest coal producer, produced approximately 18.9 million short tons (mmst) of coal i ...
Friday, 28 March 14
CHINA'S ENVIRONMENTAL MEASURES WILL NOT CURB GROWTH IN DOMESTIC STEEL PRODUCTION AND SEABORNE IRON ORE - WOOD MACKENZIE SAYS
Steel plants in China have been targeted as a major source of the toxic smog enveloping Beijing and Shanghai. Emergency measures have been impos ...
Thursday, 27 March 14
PANAMAX : SEEMS TO HEAD FURTHER DOWN; CAPESIZE : ANOTHER CHOPPY AND UNPREDICTABLE WEEK - FEARNLEYS AS
Handy
A weaker sentiment for the smaller size as well, with reduced activity in the Atlantic where Owners have to face significantly lower ret ...
Wednesday, 26 March 14
NEWBUILDING ORDERING ACTIVITY PICKS UP PACE ON IMPROVING DRY BULK MARKET CONDITIONS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The gradual improvement of the dry bulk market, as expected for some time now, is urging shipowners to increase their newbuilding ordering activ ...
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- Carbofer General Trading SA - India
- Vijayanagar Sugar Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Madhucon Powers Ltd - India
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Tamil Nadu electricity Board
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- The Treasury - Australian Government
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- Mjunction Services Limited - India
- San Jose City I Power Corp, Philippines
- TeaM Sual Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Interocean Group of Companies - India
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- ICICI Bank Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- MS Steel International - UAE
- Bulk Trading Sa - Switzerland
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- The University of Queensland
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- Mercator Lines Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Neyveli Lignite Corporation Ltd, - India
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Wilmar Investment Holdings
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Eastern Coal Council - USA
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Xindia Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Mintek Dendrill Indonesia
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- White Energy Company Limited
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- PTC India Limited - India
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Australian Coal Association
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- Bhoruka Overseas - Indonesia
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- Sindya Power Generating Company Private Ltd
- Sarangani Energy Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Orica Australia Pty. Ltd.
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Pendopo Energi Batubara - Indonesia
- Dalmia Cement Bharat India
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Sical Logistics Limited - India
- GMR Energy Limited - India
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