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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, 23 March 14
THE COAL FREIGHT RATES SEEN SLIGHTLY FIRMING UP THIS WEEK - REDDY
COALspot.com: The freight market firmed up this week. BDI was up 8.26 pct week on week and index was closed at 1599 points. The Cape index was u ...
Saturday, 22 March 14
SHIP OWNERS INVEST $15 BILLION FOR NEWBUILDINGS AND SECONDHAND VESSELS DURING FEBRUARY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners have kept on their aggressive stance in the investment scene both for newbuildings, as well as for secondhand vessels globally durin ...
Friday, 21 March 14
DRY BULK MARKET STAYS ON RECOVERY MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has reached new year heighs, as a result of renewed Capesize demand. The Baltic Dry Index (BDI) ended yesterday's sessio ...
Friday, 21 March 14
US COAL PRODUCTION UP 1.5%; WEST MISSISSIPPI COAL PRODUCTION DOWN 1.85% WEEK ON WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 19.0 million short tons (mmst) of coal i ...
Friday, 21 March 14
MERCURIA ANNOUNCES ACQUISITION OF J.P. MORGAN PHYSICAL COMMODITIES BUSINESS
COALspot.com: Mercuria Energy Group announced that it has reached a definitive agreement with J.P. Morgan Chase & Co. to acquire its physica ...
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- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Star Paper Mills Limited - India
- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
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- Price Waterhouse Coopers - Russia
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- The Treasury - Australian Government
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Indogreen Group - Indonesia
- Bhushan Steel Limited - India
- Videocon Industries ltd - India
- Gujarat Sidhee Cement - India
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- Commonwealth Bank - Australia
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Power Finance Corporation Ltd., India
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- Mercator Lines Limited - India
- Indian Oil Corporation Limited
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- The University of Queensland
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Billiton Holdings Pty Ltd - Australia
- Interocean Group of Companies - India
- Directorate General of MIneral and Coal - Indonesia
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- Goldman Sachs - Singapore
- Formosa Plastics Group - Taiwan
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- PNOC Exploration Corporation - Philippines
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Globalindo Alam Lestari - Indonesia
- Heidelberg Cement - Germany
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bharathi Cement Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- Mercuria Energy - Indonesia
- MS Steel International - UAE
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- Planning Commission, India
- Petron Corporation, Philippines
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- Barasentosa Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- Sical Logistics Limited - India
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
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