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.
|
|
Thursday, 01 January 15
FOB RICHARDS BAY COAL SWAPS CLOSED AT $63.47 PMT ON 26 DEC, SGX DATA SHOWS
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month and week over week.
The Q1 swap has lost US$ 3.37 (-4. ...
Wednesday, 31 December 14
COASTAL ENERGEN (C&O) COMMENCES 1ST UNIT OF 1200 MW POWER PLANT IN INDIA
COALspot.com: Coastal Energen, part of the Coal & Oil Group, announced last week the commissioning and commencement of power production at the ...
Wednesday, 31 December 14
SUB-BIT INDONESIA COAL Q2' 15 DELIVERY SWAP CLOSED 1.03% LOWER COMPARED TO AVERAGE Q1' 15 DELIVERY PRICE - SGX
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month and gained week over week.
The Q1 swap has lost US$ 1.35 (-2 ...
Tuesday, 30 December 14
SHIP PRICES KEEP ON FALLING, SALES COME EARLY FOR SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship prices keep on falling on the back of low freight rates. According to the latest report from shipbroker Allied Shipbroking, January sales seem ...
Tuesday, 30 December 14
INDIA INC TO BENEFIT AS IMPORTED COAL PRICES SET TO FALL - RAHUL PRITHIANI
The Hindu: India‘s coal import volumes are set to rise by over 30 per cent over the next two years to 214 million tonnes in 2015-16, as domes ...
|
|
|
Showing 3281 to 3285 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- Alfred C Toepfer International GmbH - Germany
- Global Business Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- ICICI Bank Limited - India
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Singapore Mercantile Exchange
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- Jindal Steel & Power Ltd - India
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Coalindo Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Romanian Commodities Exchange
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CIMB Investment Bank - Malaysia
- Makarim & Taira - Indonesia
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- MS Steel International - UAE
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Sarangani Energy Corporation, Philippines
- Power Finance Corporation Ltd., India
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- Directorate Of Revenue Intelligence - India
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- Independent Power Producers Association of India
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Chamber of Mines of South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- Agrawal Coal Company - India
- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Trasteel International SA, Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- Siam City Cement - Thailand
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Grasim Industreis Ltd - India
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Deloitte Consulting - India
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- The University of Queensland
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- Economic Council, Georgia
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Mercator Lines Limited - India
- Vedanta Resources Plc - India
|
| |
| |
|
