We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Friday, 06 February 15
SHIP DAMAGED BY FIRE CAUSED BY PIRATES FOUND TO BE CONSTRUCTIVE TOTAL LOSS - TAYLOR WESSING
 KNOWLEDGE TO ELEVATE
The High Court was asked to determine a number of preliminary issues, including whether a vessel was a constructive total loss (“CTL”), whether the claimants had lost the right to claim for a CTL by selling the vessel, and whether the claimants were entitled to an indemnity for salvage, tug hire and port expenses under a war risks policy.
Background
The first claimant was the owner of the tanker Brillante Virtuoso (the “vessel”). The vessel was insured against war risks under a policy underwritten by the defendants. The second claimant was the mortgagee of the vessel and the co-assured under the policy. The value of the vessel under the hull and machinery section of the policy was US$55 million, and a further US$22 million under the increased value section of the policy.
In July 2011, whilst en route from the Ukraine to China, the vessel (carrying a cargo of fuel oil) stopped off in Aden in order for an unarmed security team to embark ahead of their journey through the Gulf of Aden and the Indian Ocean where there is a risk of pirate attacks. However, whilst the vessel was waiting, it was in fact boarded by armed pirates who detonated an explosive device causing a fire on board and destroying a substantial proportion of machinery and equipment. The vessel subsequently became a dead ship with no power.
The crew were rescued by the US navy and the owners engaged a salvage company the same day to extinguish the fire. The owners’ consultant surveyor inspected the ship and sought quotations from shipyards in the Middle East and China for the cleaning and repairs of the vessel. He formed the opinion that the cost of repair would exceed the insured value of US$55 million. Accordingly, the owners tendered a notice of abandonment (“NOA”) to the insurers declaring the vessel a CTL. The insurers rejected the NOA.
The owners instructed shipbrokers to sell the vessel to a suitable buyer for scrap, however, the shipbrokers struggled to find a purchaser, and only managed to secure an offer of US$700,000 for the vessel. The insurers did not object to the sale at the time (in spite of being given an opportunity to do so) and the vessel was subsequently sold.
The claimants’ case was that the vessel suffered loss and damage by reason of an insured peril or perils (i.e. the acts of pirates and/or persons acting maliciously, alternatively terrorists and/or persons acting from a political motive and/or the vessel suffered loss and damage by reason of piracy, vandalism, sabotage, violent theft and/or malicious mischief).
The claimants claimed an indemnity for:
(i) a CTL;
(ii) if the vessel was not a CTL for partial loss and loss of hire and
(iii) sue and labour expenses incurred.
The insurers’ defence was that the claimants were not entitled to cover under the policy because, by delaying transit through the Gulf of Aden and/or calling at a port or place within the Gulf, the owners were in breach of the Talbot Gulf of Aden warranty which prevented vessels calling at any port or place or delaying their passage when transiting and/or the owners were in breach of the warranty by failing to apply Best Management Practices to Deter Piracy. The claimants denied this allegation.
Issues examined by the Court
Was the vessel a Constructive Total Loss?
The Court analysed the law on CTL and, in particular, examined section 60(2)(ii) of the Marine Insurance Act 1906 which states that a vessel is a CTL “where she is so damaged by a peril insured against that the cost of repairing the damage would exceed the value of the ship when repaired.” Clause 19 of the Institute Time Clauses-Hulls also qualifies this further by stating:
“The measure of indemnity in respect of claims for unrepaired damage shall be the reasonable depreciation in the market value of the Vessel at the time this insurance terminates arising from such unrepaired damage, but not exceeding the reasonable cost of repairs…”
The Court held that in order to succeed in establishing that the vessel was a CTL, the claimants had to prove that the cost of repairing the vessel would have exceeded the insured value of US$55 million.
The Court held that in assessing the costs of repair to the vessel, the question to be asked is what a prudent uninsured shipowner in the position of the claimants would have done in deciding whether or not to repair the vessel, and where and how the repair should be carried out.
The Court acknowledged that in this case, it was not possible to determine with complete accuracy the actual extent of damage to the vessel. In cases such as this, where matters cannot be determined with precision, the Court has to apply a “large margin” to any repair estimate. The Court recognised that a margin of error has to be applied in relation to the extent of the damage where it was not possible to investigate fully and the assessment of the cost of repair has to take account of the fact that the items which were not opened up and tested might well have required replacement, so that a prudent uninsured owner would have replaced them.
Where should the repairs have been carried out?
The Court also held that whilst cost is an important factor in determining where the prudent uninsured owner would have carried out the repairs, it is not determinative. Accordingly, the Court considered that the prudent uninsured owner would consider all the other factors which might well make the closer (whilst more expensive) yard the proper and appropriate place for repair. Hence, the Court considered that the prudent uninsured owner would have favoured repair in these circumstances in Dubai rather than China, even though the quotations for repairs in China were much lower than in the Middle East. Accordingly, the Court found that the vessel was a CTL.
Had the owners lost the right to claim for CTL by selling the vessel?
The Court held that the owners had not lost the right to claim for a CTL by selling the vessel, as the insurers were well aware throughout that the owners were proposing to sell the vessel and did not object to it. By selling the vessel, the owners were acting in the interests of both themselves and the insurers.
Sue and labour costs
In considering whether an indemnity was payable to the claimants for expenditure in relation to the costs of salvage, tugs and agency fees, the Court disagreed with the insurers’ case that once the vessel had been redelivered by the salvors, any insured peril which had been operating (e.g. violent theft, piracy, vandalism, sabotage and malicious mischief) ceased to operate. The Court found that until the vessel was in a place of safety, the insured peril continued to operate, even after redelivery by the salvors. The Court also held that the cost of the standby tugs and the associated agency expenses were incurred not only for the benefit of the owners, but for the benefit of the insurers, so that they were recoverable as sue and labour expenses.
However, the Court agreed with the insurers that the entitlement to recover sue and labour expenses ceased once the claim form was issued. The Court applied the decision in Kuwait Airways v Kuwait Insurance2 that the issue of the claim form (or writ) crystallises the rights and obligations of the parties to the contract of insurance, so that the relations between the parties are thereafter governed by the Civil Procedure Rules, rather than the contract of insurance. Hence the duty of utmost good faith ceases once proceedings are issued and sue and labour expenses incurred in that period are not recoverable as they were incurred solely for the owner’s benefit.
Source: Taylor Wessing Hellenic Shipping
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Monday, 09 February 15
Q2' CFR SOUTH CHINA COAL SWAP DECLINED 3.28% TO $ 56.92 W-O-W
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 1.93 (-3.28%) per MT month over month and US$ 0.10 (-0 ...
Sunday, 08 February 15
BDI FELL CONTINUOUSLY HIT A THREE DECADES LOW
COALspot.com: This week Baltic Exchange Dry Freight Index (BDI) fell continuously hit a three decades low.
The BDI continuously fell and was d ...
Friday, 06 February 15
WEEKLY U.S. COAL PRODUCTION UP AN ESTIMATED 1.1% FROM LAST WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 20.1 million short tons (mmst) of coal ...
Thursday, 05 February 15
BDI HAS NOW FALLEN A LEVEL CLOSE TO THE INDEX'S HISTORIC LOW - INTERMODAL
They say a picture is worth a thousand words and in this instance just one look at the tables above is enough to understand the great pressure the ...
Thursday, 05 February 15
ULTRAMAX LEVELS FROM INDIA TO CHINA IN THE MID US$ 5000'S - FEARNLEYS AS
Handy
Despite the overall weak sentiment, there is a scent of optimism in the Atlantic market for ppt dates. Continent is still struggling with o ...
|
|
|
Showing 3211 to 3215 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- White Energy Company Limited
- Sical Logistics Limited - India
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Link Ltd, New Zealand
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- Antam Resourcindo - Indonesia
- Attock Cement Pakistan Limited
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- MS Steel International - UAE
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- Indika Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Dalmia Cement Bharat India
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Kumho Petrochemical, South Korea
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Bulk Trading Sa - Switzerland
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Mjunction Services Limited - India
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- Kepco SPC Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Wood Mackenzie - Singapore
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Parliament of New Zealand
- GMR Energy Limited - India
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Bangladesh Power Developement Board
|
| |
| |
|
