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, 07 January 15
2015 IS RIDDLED WITH CHALLENGES FOR THE SHIPPING SECTOR, MOST NOTABLY THE DRY BULK MARKET - HELLENIC SHIPPING NEWS
As the new year has now set foot for real, many are still looking to detect what’s in store for the various shipping markets, with the first ...
Tuesday, 06 January 15
SHIPPING MUST ADOPT CAN-DO ATTITUDE IN 2015 - MOORE STEPHENS
Shipping needs to adopt a can-do attitude in order to successfully meet the challenges which are likely to come its way in 2015.
Shipping part ...
Tuesday, 06 January 15
Q4' 15 FOB INDONESIA COAL SWAP CLOSED 1.81% HIGHER COMPARED TO Q1' 15 CLOSING
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 0.74 (-1.51%) m ...
Tuesday, 06 January 15
FOB RICHARDS BAY COAL SWAPS LOST W-O-W AND M-O-M, SGX DATA SHOWS
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 3.52 (-5. ...
Monday, 05 January 15
CFR SOUTH CHINA COAL SWAPS GAINED WEEK OVER WEEK, SGX DATA SHOWS
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased by US$ 2.50 (-4.02%) month over month and gained US$ 0.20 ( ...
|
|
|
Showing 3271 to 3275 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Indian Energy Exchange, India
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- Chettinad Cement Corporation Ltd - India
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Bhushan Steel Limited - India
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- Sinarmas Energy and Mining - Indonesia
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- Ceylon Electricity Board - Sri Lanka
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Australian Coal Association
- Straits Asia Resources Limited - Singapore
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Bangladesh Power Developement Board
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Parliament of New Zealand
- Savvy Resources Ltd - HongKong
- Gujarat Mineral Development Corp Ltd - India
- Marubeni Corporation - India
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Xindia Steels Limited - India
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Sical Logistics Limited - India
- Altura Mining Limited, Indonesia
- Bharathi Cement Corporation - India
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- White Energy Company Limited
- Commonwealth Bank - Australia
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Thai Mozambique Logistica
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Goldman Sachs - Singapore
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Tata Chemicals Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Aboitiz Power Corporation - Philippines
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- SMC Global Power, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- Bhatia International Limited - India
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Energy Development Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- Salva Resources Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
|
| |
| |
|
