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Tuesday, 16 June 15
MERS: POTENTIAL CHARTERPARTY IMPLICATIONS - CLYDE & CO
 KNOWLEDGE TO ELEVATE
South Korea's current outbreak of Middle East Respiratory Syndrome (MERS) has been the focus of much international attention. The local impact of the outbreak has been severe, leading to nearly 3,000 schools being closed and over 5,500 people being quarantined as a result of possible contact with infected persons. The virus has so far infected over 150 people in the country and the World Health Organization (WHO) anticipates that cases will continue to surface despite indications that the outbreak is now being brought under control. Whilst public health experts do not anticipate any form of worldwide pandemic to result from the situation in South Korea, it is feared that there is scope for a regular pattern of MERS outbreaks to occur over the coming years.
The Potential Legal Impact of MERS on Charterparties
With cruise ships having cancelled calls to South Korean ports and confirmed cases of MERS in the port of Pyeongtaek, the outbreak may understandably give rise to concerns on the part of shipowners whose vessels are due to call in South Korea or the charterers of such vessels. Whether the outbreak will have legal implications on a charterparty will very much depend on the wording of the charterparty in question; standard form charterparties are unlikely to include wording dealing with outbreaks of infectious/contagious disease.
Safe Port Warranties
Shipowners are obliged to follow charterers' legitimate orders unless to do so would expose the crew to unacceptable risk. Whilst charterers under a time charter are obliged to nominate safe ports, in the absence of specific wording it is unlikely that an outbreak of MERS will render a port unsafe.
Even if an outbreak of disease is in the port city itself, as in Pyeongtaek, the port may remain safe as long as there are appropriate protective measures in place. As such, there is significant risk involved in an owner refusing an order to a port on the basis of unsafety owing to disease risk, since to do so wrongly would amount to breach of the charter for failure to follow a legitimate order.
If the facts are such that there is a significant risk to the health of the crew, then charterers may be asked to nominate an alternative port, but this may have knock-on consequences particularly if there are bills of lading issued. The best approach for owners will be to keep in close contact with their P&I Club who will be able to give timely and appropriate guidance as the situation develops.
Where a vessel is subject to a voyage charter, the prospective safety of a port is also an issue and the arguments are similar to those detailed above; as with time charters, it is likely to be difficult to demonstrate that a South Korean port is unsafe on account of MERS.
Quarantine and Deviation
In the event that a time-chartered vessel becomes subject to quarantine delays or is forced to deviate to land an ill crew member, the hire/off-hire provisions may result in the vessel being placed off-hire. The specific charterparty wording would need to be carefully considered to assess whether this might be the case.
Similar concerns also arise in relation to voyage charters. Shipowners may deviate for the safety of the crew but in such a scenario no additional freight will become payable, so such deviation is at their own expense. A defence of 'reasonable deviation' may come into play where the Hague or Hague-Visby Rules apply. In terms of quarantine, the usual position is that time spent/lost at the time of charterers' orders will count as laytime/demurrage, although this too will depend on the charterparty terms agreed.
Free Pratique
In order to commence laytime, a vessel requires free pratique clearance. Absent wording to the contrary in the charterparty, the usual position is that a master can give a valid notice of readiness (NOR) without first having all the customs documents and obtaining free pratique, provided that he has no reason to suppose that being document ready is anything other than a mere formality.
However, if the vessel has recently called to a port in an infected area, then the mere formality test may not assist, since the vessel is likely to be subject to quarantine delays while the health of the crew is ascertained. In such a scenario, unless a charterparty provision states otherwise, owners bear the risk of the delay, since they would be unable to give a valid NOR to start laytime running until free pratique clearance is obtained.
Force majeure
If the charterparty in question contains a force majeure clause, the question may also arise whether the MERS outbreak fulfils the requirements of a force majeure scenario. A typical clause of this type suspends and/or terminates performance of the charterparty on the occurrence of an extraordinary event, which is beyond the parties’ control and which impacts the ability of one or both of the parties to fulfil their contractual commitments. As such, force majeure is usually a high evidential hurdle to clear.
Whilst the WHO has described the MERS outbreak as 'large and complex', the organisation has not issued a travel ban relating to South Korea and although Hong Kong, Macau and Taiwan have advised against travelling to the country, their notices amounted to recommendations rather than official travel alerts. If the MERS outbreak becomes more widespread and/or travel bans are put in place, the possibility of the situation amounting to a force majeure event may strengthen, however, at present, the scope for force majeure appears limited, unless the wording of a particular clause is quite broadly drafted.
Comment
The South Korean government is working alongside the WHO to bring the current MERS outbreak under control, however as with any outbreak of infectious/contagious disease, the situation may raise concerns for shipowners and charterers who are aware of the potential disruption such incidents can cause.
Parties may wish to consider managing the risk associated with such outbreaks by inserting contagious/infectious disease clauses into prospective charterparties, thus avoiding the ambiguity which can arise in this area.
By Ik Wei Chong, Bethan Bradley and Aislinn Fawcett
About Clyde & Co
Clyde & Co is a dynamic, rapidly expanding global law firm focused on providing a complete legal service to clients in our core sectors.
Clyde & Co advises businesses that are at the heart of worldwide commerce and trade.
If you believe an article violates your rights or the rights of others, please contact us.
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Friday, 11 March 16
ADANI GLOBAL BAGS 0.26 MILLION TONS OF COAL CONTRACT FROM LANKA COAL COMPANY
COALspot.com: Lanka Coal Company (Private) Limited, Sri Lanka has awarded 260,000 +/- 10% tons of Power plant 6300 GAR calorific value coal to Adan ...
Friday, 11 March 16
US WEEKLY COAL PRODUCTION DOWN BY 0.5 MMST
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 12.6 million shor ...
Friday, 11 March 16
FORTESCUE'S MOU WITH VALE COULD STRENGTHEN ITS BUSINESS PROFILE - FITCH
COALspot.com: Fitch Ratings says that Australia-based Fortescue Metals Group Limited's (BB+/Negative) memorandum of understanding (MOU) with Br ...
Thursday, 10 March 16
CHINA'S NEW POLICY PLAN COULD BE POSITIVE FOR SHIPPING, BUT TARGETS SEEM RATHER AMBITIOUS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
China set out its new policy plan during the course of the past weekend, but it seems to have set some very ambitious goals, which could be difficu ...
Thursday, 10 March 16
U.S. COAL EXPORTS DECLINED 23% IN 2015, AS COAL IMPORTS REMAINED STEADY
COALspot.com: The United States remains a net exporter of coal, exporting 74.0 million short tons (MMst) and importing 11 MMst in 2015.
Accord ...
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Showing 2526 to 2530 news of total 6871 |
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- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- Interocean Group of Companies - India
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Trasteel International SA, Italy
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Thai Mozambique Logistica
- Tata Chemicals Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meralco Power Generation, Philippines
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- Anglo American - United Kingdom
- Electricity Generating Authority of Thailand
- Heidelberg Cement - Germany
- Central Java Power - Indonesia
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- Merrill Lynch Commodities Europe
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- CIMB Investment Bank - Malaysia
- India Bulls Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- Videocon Industries ltd - India
- Borneo Indobara - Indonesia
- Economic Council, Georgia
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- Sical Logistics Limited - India
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Kapuas Tunggal Persada - Indonesia
- Iligan Light & Power Inc, Philippines
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- Agrawal Coal Company - India
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Ministry of Finance - Indonesia
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Posco Energy - South Korea
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Toyota Tsusho Corporation, Japan
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Chettinad Cement Corporation Ltd - India
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- Indogreen Group - Indonesia
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
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