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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, 12 February 15
INDONESIAN COAL PRICE REFERENCE INCHED DOWN 1.44% IN FEBRUARY
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down Indonesian coal bench mark price this month to US$ 62.92 pe ...
Thursday, 12 February 15
NEWBUILDING ORDERING ACTIVITY DRAGS ON, AS OWNERS ARE LOOKING FOR LOWER PRICES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship owners appear to be waiting for lower prices in their dealings with Asian shipyards, as the dry bulk market is at historical lows. According t ...
Wednesday, 11 February 15
DRY BULK MARKET REMAINED UNDER PRESSURE : STABILIZING CAPE MARKET HARDLY HELPED SENTIMENT
COALspot.com: The Dry Bulk market remained under pressure last week, while the stabilizing Cape market hardly helped sentiment.
Greece based s ...
Wednesday, 11 February 15
BDI HITTING THE ALL-TIME LOW; FFA MARKETS NOT SHOWING ANY POSITIVE SIGNS
With the BDI hitting the all-time low and with FFA markets not showing any positive signs for a possible recovery in the near future, pessimism is ...
Tuesday, 10 February 15
IRON ORE MARKET TO REMAIN OVERSUPPLIED IN 2015: PRICE FORECAST $70/T - WOOD MACKENZIE
COALspot.com: With January witnessing the price of iron ore falling to its lowest levels since May 2009, Roger Emslie, Principal Metals & ...
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- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Coal and Oil Company - UAE
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- GMR Energy Limited - India
- Jaiprakash Power Ventures ltd
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- Gujarat Mineral Development Corp Ltd - India
- Minerals Council of Australia
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Global Green Power PLC Corporation, Philippines
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- The University of Queensland
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- Meralco Power Generation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Miang Besar Coal Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- MS Steel International - UAE
- Mjunction Services Limited - India
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Bukit Makmur.PT - Indonesia
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Kartika Selabumi Mining - Indonesia
- Dalmia Cement Bharat India
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- IHS Mccloskey Coal Group - USA
- Global Coal Blending Company Limited - Australia
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Oldendorff Carriers - Singapore
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Uttam Galva Steels Limited - India
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Kumho Petrochemical, South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
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