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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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Tuesday, 17 February 15
Q2' FOB RICHARDS BAY COAL SWAP CLOSED AT $63.45; $ 1.85 HIGHER COMPARED TO Q4 CLOSING
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month, week on week and day on day.
The Q2 swap has ...
Monday, 16 February 15
COAL MINING SLUMP A BLESSING IN DISGUISE - THE JAKARTA POST
The growth of the coal-mining industry, which has diminished in the last two years, is expected to slump even further this year following weakening ...
Monday, 16 February 15
FOB NEWCASTLE COAL SWAPS SURGE WEEK ON WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 1.31 per MT (+2.59%) week over week and US$ 4.35 (+9.13%) month on ...
Monday, 16 February 15
Q2' 15 - CFR SOUTH CHINA COAL SWAP ROSE 5.22% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 2.88 (+5.22%) per MT month over month and US$ 1.08 (+1.90% ...
Sunday, 15 February 15
BALTIC DRY INDEX CONTINUALLY DIPPED IN RED
COALspot.com: The Baltic Dry Index continues its decline and fell 5.18 pct to 530 points week on week due to falling commodity prices and declining ...
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- Alfred C Toepfer International GmbH - Germany
- Gujarat Sidhee Cement - India
- Ministry of Finance - Indonesia
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- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
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- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
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- PowerSource Philippines DevCo
- Pipit Mutiara Jaya. PT, Indonesia
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- White Energy Company Limited
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- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- Timah Investasi Mineral - Indoneisa
- Siam City Cement PLC, Thailand
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- Indogreen Group - Indonesia
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- ICICI Bank Limited - India
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- Agrawal Coal Company - India
- The State Trading Corporation of India Ltd
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- SMG Consultants - Indonesia
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- Tamil Nadu electricity Board
- Minerals Council of Australia
- Sical Logistics Limited - India
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- Chamber of Mines of South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- VISA Power Limited - India
- Independent Power Producers Association of India
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Standard Chartered Bank - UAE
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
- Cement Manufacturers Association - India
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- TNB Fuel Sdn Bhd - Malaysia
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Economic Council, Georgia
- Australian Coal Association
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Tata Chemicals Ltd - India
- Banpu Public Company Limited - Thailand
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Thai Mozambique Logistica
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Malabar Cements Ltd - India
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- ASAPP Information Group - India
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Oldendorff Carriers - Singapore
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