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.
|
|
Tuesday, 27 January 15
Q1 FOB INDONESIA COAL SWAP CLOSED AT $ 47.87 FOR WEEK ENDING JAN. 23
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 gain week over week and declined month on month.
The Q1 swap has decline US$ 0.9 ...
Tuesday, 27 January 15
Q2 FOB NEWCASTLE COAL SWAP UP 4.5% W-O-W
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery declined US$ 0.28 per MT (-0.54%) month over month and increased US$ 1.23 ( ...
Monday, 26 January 15
OVERSUPPLY, AMPLE STOCKPILES, AND LACKLUSTER UNDERLYING STEEL DEMAND KEPT COKING COAL PRICES LOW IN 2014
COALspot.com: Coking coal prices (FOB & CFR) fell 15% and 18% respectively during the year, amidst persistent oversupply, ample inventory and s ...
Monday, 26 January 15
FOB RICHARDS BAY Q2 COAL SWAP CLOSED LOWER THAN Q1 CLOSING
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q1' 2015 declined month over month and day on day.
The Q1 swap has fell ...
Monday, 26 January 15
API 8 CFR SOUTH CHINA COAL SWAP CONTINUE TO SLIDE M-O-M; ROSE W-O-W
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery declined US$ 0.79 (-1.33%) per MT month over month and gained US$ 2.10&nb ...
|
|
|
Showing 3231 to 3235 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Kalimantan Lumbung Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- Antam Resourcindo - Indonesia
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Electricity Generating Authority of Thailand
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Wilmar Investment Holdings
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Attock Cement Pakistan Limited
- Simpson Spence & Young - Indonesia
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- Leighton Contractors Pty Ltd - Australia
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Orica Australia Pty. Ltd.
- Price Waterhouse Coopers - Russia
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- Straits Asia Resources Limited - Singapore
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- Africa Commodities Group - South Africa
- Port Waratah Coal Services - Australia
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- New Zealand Coal & Carbon
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- CIMB Investment Bank - Malaysia
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Semirara Mining Corp, Philippines
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- The University of Queensland
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- Indian Oil Corporation Limited
- Banpu Public Company Limited - Thailand
- PowerSource Philippines DevCo
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- McConnell Dowell - Australia
- The Treasury - Australian Government
- The State Trading Corporation of India Ltd
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- Latin American Coal - Colombia
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Rio Tinto Coal - Australia
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- CNBM International Corporation - China
|
| |
| |
|
