We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Tuesday, 13 January 15
MORE PITFALLS FOR OWNERS LOOKING TO TERMINATE FOR UNPAID HIRE - INCE & CO
 KNOWLEDGE TO ELEVATE
It is a debatable point whether or not the obligation to pay hire under a time charter is a condition of the contract or not, notwithstanding the obiter comments of Mr Justice Flaux in the Astra [2013] EWHC 865 (see the Shipping E-Brief July 2013). Making payment under a commercial contract is said to be “not of the essence of the contract” and therefore not a condition. The significance is that a breach of condition allows the innocent party to terminate the contract in addition to claiming damages. Otherwise, he may be limited to his damages claim but unable to terminate the contract unless the failure to make payment, or indeed making repeated late payment under an instalment contract, amounts to a repudiatory breach of the contract.
The traditional view is that, in order to terminate a time charter and claim damages for losses suffered following a failure to pay hire, the charterer’s conduct must be shown to be
(i) repudiatory in the sense that the breach deprives the owner of substantially the whole benefit of the charter; and/or
(ii) renunciatory in the sense that it evinces an intention on the charterer’s part no longer to perform the charter at all or to perform the charter in a manner substantially inconsistent with his contractual obligations.
It will very much depend on the facts and circumstances in any given case whether the non-payment or late payment of hire instalments under a time charter amounts to a repudiatory breach. This often requires the owner to make a difficult decision as to whether the charterer’s failure to pay a number of hire instalments, or paying them late, entitles him, the owner, to terminate the charter. If the owner “calls it wrong”, he can find himself in repudiatory breach for wrongful termination and facing a claim for damages from the charterer.
Januzaj v. Valilas is not a shipping case but deals with general principles concerning the law on repudiation. It arguably introduces a further potential pitfall for owners seeking to rely on multiple failures to pay hire, or repeated late payments of hire, in order to demonstrate repudiatory conduct on the part of a charterer.
The background facts
The Claimant was a dentist operating his practice from the Defendant’s premises. The Claimant had agreed to pay the Defendant half his earnings from his practice in return for use of the premises. The Claimant’s earnings came from the UK’s National Health Service (the “NHS”) under an arrangement whereby the Claimant was paid in advance in equal monthly instalments for his work. If, at the end of the year, the Claimant had not done sufficient work, then any over-payment of his advance earnings had to be refunded to the NHS.
A dispute arose between the Claimant and Defendant, as a result of which the Claimant stopped any further payments to the Defendant. The Claimant was particularly concerned that the Defendant would not return his half of any advance payments if a refund became due to the NHS. The Claimant failed to make three monthly payments to the Defendant between August and October. In November, the Defendant terminated the agreement on the basis of the Claimant’s repudiatory breach of contract.
The Court decisions
At first instance, the Court found that the agreement had been terminated wrongfully and awarded the Claimant damages. The majority of the Court of Appeal upheld this decision on the basis that, on the facts, the Defendant should have been aware that the Claimant was only intending to pay late as opposed to evincing an intention not to pay at all. By contrast, the dissenting judgment concluded that the failure to make three payments in a row was a repudiatory breach.
In the context of time charter hire disputes
The onus will be on an owner to demonstrate that he has been deprived of substantially the whole benefit of his time charter and/or that the charterer does not intend to make any further hire payments in the future. Furthermore, The Brimnes [1972] 2 Lloyd’s Rep. 465 made it clear that even persistent late payment of hire instalments will not necessarily amount to a repudiation of the charter.
One of the majority appeal judges in Januzaj v. Valilas suggested that, in determining whether the number of missed or late payments was repudiatory, regard had to be given to the length of the contract as a whole. There is, however, previous case law to the effect that, in deciding whether repeated late payments are repudiatory, it will not simply be a question of looking at the number of payment instalments required over the whole of the contractual period and comparing that number with the number of occasions on which payment has not been made or has been made late. It is also necessary to look at the type of contract in question.
Januzaj v. Valilas was very much decided on its own facts. In that case, the dentist who missed three monthly payments had, in previous years, always managed to complete the requisite amount of work he had to perform for the NHS over the course of the year and so no refund to the NHS had ever been necessary. The majority of the Court of Appeal concluded that the Defendant should, therefore, have known that the Claimant would complete all his NHS work in the relevant year also, so that no refund would have been required and the Claimant would eventually have paid the Defendant all that was owing to him, albeit somewhat late. That was not sufficient to amount to repudiatory conduct.
In a time charter context, however, and in a challenging economic climate, it will often not be at all clear to an owner that he will eventually get his money, albeit late. Charterers may be on the brink of insolvency and may be looking to negotiate a reduced hire rate rather than comply with their original contractual obligations. There may also be a history of repeated defaults on the part of the charterer that can render his behaviour repudiatory as a whole. Nonetheless, Januzaj v. Valilas gives an owner faced with a defaulting charterer some cause for concern that he will be jumping the gun if he chooses to terminate where a charterer has missed a few hire payments. Is it relevant to consider the length of the charter when deciding whether several unpaid instalments is repudiatory? Are those payments just late or is the charterer not going to pay at all?
Comment
Given the Court of Appeal decision in Januzaj v. Valilas, an owner will need to be cautious about terminating for late payments of hire and there remains uncertainty over exactly how many non-payments will be sufficient to justify a decision by the owner to terminate the charter. Defaulting charterers often suggest to owners that they intend to pay outstanding hire in the future. Such a defaulting charterer, faced with an owner who chooses to terminate the charter as a result, may now argue that the outstanding payments were merely late or that only a few non-payments of hire in the context of a long-term charter is not repudiatory.
Source: INCE&Co | Hellenic Shipping News
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Wednesday, 21 January 15
PANAMAX MARKET MOVED SIDEWAYS OVERALL LAST WEEK - INTERMODAL
COALspot.com: The positive sentiment in which the week prior ended carried on through-out last week as well, the end of which marked the first posi ...
Wednesday, 21 January 15
SHIFT IN INTERNATIONAL COAL TRADE TO THE PACIFIC BASIN WILL CONTINUE - IMF
COALspot.com: The shift in international coal trade to the Pacific Basin will continue, IMF said in its latest Medium-Term Coal Market Report.
...
Wednesday, 21 January 15
MARKET INSIGHT - VASSILIS LOGOTHETIS, INTERMODAL
The World Bank has lowered its forecast for global growth in 2015 to 3% down from its previous level of 3.4% amid rising concerns over the economic ...
Wednesday, 21 January 15
THERMAL COAL PRICE OUTLOOK DEPENDENT ON INDIAN IMPORT DEMAND - MATTHEW BOYLE, CRU
COALspot.com: Supply and demand side developments in India will be an important determinant of future market dynamics and prices for thermal coal a ...
Wednesday, 21 January 15
PORT OF NEWCASTLE COAL EXPORTS JUMP 16.19% ON MONTH TO 15.80 MIL MT IN DECEMBER' 14
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.136 billi ...
|
|
|
Showing 3241 to 3245 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- New Zealand Coal & Carbon
- Grasim Industreis Ltd - India
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sojitz Corporation - Japan
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- Aboitiz Power Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- SMG Consultants - Indonesia
- Deloitte Consulting - India
- Eastern Energy - Thailand
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Videocon Industries ltd - India
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- Timah Investasi Mineral - Indoneisa
- LBH Netherlands Bv - Netherlands
- Renaissance Capital - South Africa
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- Sree Jayajothi Cements Limited - India
- The University of Queensland
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Economic Council, Georgia
- Central Electricity Authority - India
- Coal and Oil Company - UAE
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Orica Mining Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Karaikal Port Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Makarim & Taira - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- India Bulls Power Limited - India
- Electricity Generating Authority of Thailand
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
|
| |
| |
|
