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Tuesday, 17 February 15
WHO PAYS THE SUEZ CANAL FEES? - INCE & CO
 KNOWLEDGE TO ELEVATE
This was an appeal from an arbitration award on a point of construction in relation to the wording of an addendum to a charterparty.
The Commercial Court held that the costs of transiting the Suez Canal arising as a result of amended voyage orders were for the Charterers’ account, even though the Disponent Owners would have had to incur them anyway in order to redeliver the vessel.
The background facts
The Claimant Disponent Owners (“Owners”), chartered the vessel to the Respondents for a voyage from Constanza to Djibouti. The vessel arrived at Djibouti but was unable to discharge because there were no receivers for the cargo. After the vessel had spent three months off Djibouti, the Owners and the Charterers agreed an addendum (“addendum no. 1″) to the charterparty whereby the discharge port was changed to Ain Sukhna, Egypt, a port to the south of the Suez Canal.
Addendum no. 1 provided:
“Owners and Headowners to be held harmless and indemnified against all losses, expenses, damages, risk whatsoever and howsoever arising including but not limited to those which may arise from any 3rd party including but not limited to Egyptian authority’s rejection refusal or inability to accept delivery of the cargo or from charterer’s failure to discharge cargo.”
Later, by a further addendum (“addendum no. 2″), the discharge port was changed again from Ain Sukhna to Damietta, an Egyptian port on the Mediterranean coast, meaning that the vessel would have to transit the Suez Canal northbound in order to arrive at the discharge port. Materially, addendum no. 2 provided:
“…the cargo is to be discharged at the port of Damietta (Egypt) instead of Ain Sukhna (Egypt) and all other terms, conditions, clauses and paragraphs as per Charter Party dated 23 October 2009 and addendum no. 1 and reservations of rights to remain in force.”
Under the head charterparty, a time trip charter, the Owners had to re-deliver the vessel at Port Said after completion of the voyage. She would, therefore, have had to transit the Suez Canal irrespective of the change of discharge port under addendum no. 2. The head charterparty provided that the Owners (as charterers under that charter) were responsible for all canal tolls and, therefore, as between them and the registered Owners, would have to bear the costs of transiting the Suez Canal.
In the arbitration, the Tribunal held that the costs of transiting the Suez Canal were not an expense that the Charterers had agreed to bear in the addenda on the basis that the Owners would have had to transit the Suez Canal anyway and:
“in the context, “losses” or “expenses” [in addendum no. 1, as cited above] must be construed as limited to additional losses and expenses which would not have been incurred in any event.”
It was this finding that was the subject of the Owners’ appeal.
The Commercial Court decision
The Court found that the commercial aim of the addenda had been to allow the Charterers to bring the voyage (and therefore their liability to pay demurrage) to an end and to allow the Owners to discharge the cargo and redeliver the vessel. The Court considered both the commercial objectives of the parties and their background knowledge when they agreed the addenda. The Court noted that the Owners’ liability under the head charterparty to bear the costs of transiting the Suez Canal was not within the knowledge of the Charterers and should not therefore be taken into account when assessing the scope of the Charterers’ indemnity.
Given the Court’s finding on the facts, the question which it had to answer was simply whether the expense of transiting the Suez Canal arose from the Charterers’ failure to discharge the cargo at Djibouti. The Court found that the Suez Canal transit would not have been required in order to perform the original voyage to Djibouti but was required to perform the amended voyage to Damietta and, as such, the costs of the transit were ones that the Charterers had agreed to bear. The appeal was therefore allowed.
Comment
This judgment shows the Court applying the clear wording used by the parties, since the expense arose from the Charterers’ failure to discharge the cargo at Djibouti, and that is what was expressly covered by the indemnity. The decision also emphasises that the background knowledge against which contracts will be interpreted is limited to that knowledge available to both parties.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Source: Ince & Co | Hellenic Shipping News
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Thursday, 26 February 15
DRY BULK MARKET LOOKING FOR POSITIVE MOMENTUM, BUT PROSPECTS REMAIN DIM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As the Baltic Dry Index (BDI) inched a bit higher over the past couple of sessions and the Chinese are returning to the market after a week long hi ...
Wednesday, 25 February 15
PORT OF NEWCASTLE SHIPPED 13.16MT OF COAL IN JANUARY; DECLINED 16.70% FROM A MONTH AGO
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.15 billio ...
Wednesday, 25 February 15
BDI SLIPPING ONCE MORE TO FRESH HISTORICAL LOWS
COALspot.com: With the BDI slipping once more to fresh historical lows and the Chinese holidays underway, signs for a positive reversal in the Dry ...
Tuesday, 24 February 15
FOB INDONESIA COAL SWAP SET TO RALLY
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose week over week and month on month.
The Q2 swap increased US$ 3.30 (+7.30%) ...
Tuesday, 24 February 15
Q3' FOB RICHARDS BAY COAL SWAP CLOSED $59.80 W/E 20 FEB
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month and decline week on week.
The Q2 swap has soar ...
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- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- CIMB Investment Bank - Malaysia
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- OPG Power Generation Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Riau Bara Harum - Indonesia
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Therma Luzon, Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- IEA Clean Coal Centre - UK
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- Global Green Power PLC Corporation, Philippines
- Meralco Power Generation, Philippines
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Georgia Ports Authority, United States
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Energy Link Ltd, New Zealand
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Posco Energy - South Korea
- PowerSource Philippines DevCo
- Gujarat Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- PTC India Limited - India
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- Independent Power Producers Association of India
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Jindal Steel & Power Ltd - India
- Bhatia International Limited - India
- IHS Mccloskey Coal Group - USA
- Australian Coal Association
- Sakthi Sugars Limited - India
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Thiess Contractors Indonesia
- Coastal Gujarat Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
- Tata Chemicals Ltd - India
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
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