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Friday, 17 July 15
DO CANCELLATION RIGHTS UNDER VOYAGE CHARTERPARTY SURVIVE RE-NOMINATION OF LOAD PORT? - INCE&CO
 KNOWLEDGE TO ELEVATE
Do cancellation rights under voyage charterparty survive re-nomination of load port?
St Shipping & Transport Inc v. Kriti Filoxenia Shipping Co SA [2015] EWHC 997 (Comm) (MT Kriti Filoxenia)
The Commercial Court has considered whether cancellation provisions in the BEEPEEVOY3 charterparty form were applicable in the event of re-nomination of a load port by charterers under the charter. In this case, the Charterers re-nominated the load port which the Owners were not able to reach by the cancellation date. The Charterers cancelled the charterparty. In arbitration proceedings, the Tribunal found that the cancellation provisions were not applicable where the Charterers had exercised the contractual option to re-nominate a load port. The Charterers appealed the decision to the Commercial Court, which upheld the findings of the Tribunal and dismissed the appeal.
The background facts
This case concerned a voyage charterparty under the BEEPEEVOY 3 standard form. The key clauses in the charterparty provided as follows:
“17.… If it appears to Charterers that the Vessel will be delayed beyond the Cancelling Date Charterers may require Owners to notify Charterers of the date on which they expect the Vessel to be ready to load whereupon Charterers shall have the option to cancel this Charter…
24.… If after any loading or discharge port or place has been nominated Charterers desire to vary such port or place, Owners shall issue such revised instructions as are necessary at any time to give effect to Charterers’ revised orders and any period by which the steaming time taken to reach the alternative port or place exceeds the time which should have been taken had the Vessel proceeded thither directly shall count as laytime or, if the Vessel is on demurrage, as demurrage.”
The vessel proceeded to a nominated load port within the range provided for under the charterparty. The Charterers then nominated an alternative load port under clause 24. The Owners could not reach that load port by the cancellation date and the Charterers cancelled the charterparty in reliance upon clause 17. The Owners denied that the Charterers had a right to cancel and accepted the cancellation as a repudiation of the charterparty. The dispute went to arbitration.
The arbitration award
The Tribunal found in favour of the Owners and held that the cancellation provisions in clause 17 did not apply where the Charterers exercised the liberty given under clause 24 to re-nominate the load port. The Tribunal further held that, even if the cancellation provisions did apply, the Charterers may not cancel where the re-nomination was made at a time when the estimated time of arrival for the re-nominated port was after the cancellation date under the charterparty. The Charterers appealed to the Commercial Court.
The Commercial Court decision
When it came to construing the words in clauses 17 and 24 of the charterparty, the Court took as its starting point the ordinary and natural meaning of the words used in those clauses as they would be understood by reasonable charterers and owners in the context in which the agreement was made. The Court highlighted the importance of the fact that the parties to a charterparty were involved in a venture which required a degree of co-operation in order to work successfully. Regarding clause 17, the cancellation clause, the Charterers’ ability to cancel necessarily entailed that the Charterers would do what is necessary on their part to enable the vessel to achieve that cancellation date and not impair the
Owners’ ability to comply with that date
The Court also looked at the reasons why it is in the interests of both sides to agree a cancellation date. At common law, subject to the express terms of a charterparty, both parties are bound by the contract until the delay is such that it frustrates the commercial purpose of the venture. Agreeing a cancellation date provides certainty to both parties in that it avoids disputes as to when that delay has frustrated a contract, which is a matter of fact in each case.
The Court referred to the “broad commercial interpretation” it has previously taken in the construction of these types of clauses, in order to achieve the parties’ commercial objectives. In this regard, the Court examined the commercial considerations which underlie the re-nomination clause. For the Charterers, the main advantage of this clause is to have greater flexibility to revise their orders so as to tailor their shipping arrangements according to their cargo arrangements. On the other hand, absence of the load port re-nomination provision would be advantageous to the Owners since it would give them the certainty of an irrevocable nomination. The Court also noted the commercial value of the cancellation clause from the Charterers’ perspective. On balance, the Court placed more importance on the Owners’ concerns of losing the certainty of an irrevocable nomination, whilst at the same time remaining exposed to the Charterers’ right to cancel.
The Court also noted that clause 24 made no express reference to the cancellation rights under clause 17. The Court recognised that the BEEPEEVOY 3 charterparty, being a standard form, is a document drafted with considerable care. Had the draftsmen of this form intended for the clause 17 cancellation rights to apply to a re-nomination of the load port under clause 24, express words would have been used to that effect and would have provided for how such rights would apply and in what circumstances. No such words were present in this case.
The appeal was therefore dismissed.
Comment
This case serves as a useful reminder of the English Court’s approach to the interpretation of charterparty provisions and, in particular, to consideration of the interplay between a cancellation clause and a load port re-nomination provision under a voyage charterparty. This decision also highlights the Court’s commercial approach to such issues, in particular its reference to the Charterers’ duty to co-operate with the Owners and to do what is necessary to enable the vessel to achieve the cancellation date if they wish to be able to rely upon the cancellation clause.
Source: INCE&Co
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Tuesday, 07 January 20
CLEANER AIR IN 2020: 0.5% SULPHUR CAP FOR SHIPS ENTERS INTO FORCE WORLDWIDE - EUROPEAN COMMISSION
From 1 January 2020, the maximum sulphur content of marine fuels is reduced to 0.5% (down from 3.5%) globally – reducing air pollution and pr ...
Tuesday, 07 January 20
BHP EYES INDIA FOR COAL GROWTH AS CHINA DEMAND FLATLINES - SYDNEY MORNING HERALD
Australia’s largest miner, BHP, believes the long-term trajectory of the emerging economy of India and the acceleration of its steelmaking ou ...
Sunday, 05 January 20
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KNOWLEDGE TO ELEVATE
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SUPRAMAX: A 53,000DWT VESSEL FIXING DELIVERY INDONESIA TRIP TO CHINA AT $4,000 AND A 58,000DWT SHIP FIXING DELIVERY EAST KALIMANTAN TRIP TO THAILAND AT $5,500 - BALTIC BRIEFING
Capesize
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Thursday, 02 January 20
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Showing 1211 to 1215 news of total 6871 |
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- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Metalloyd Limited - United Kingdom
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- IHS Mccloskey Coal Group - USA
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- McConnell Dowell - Australia
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- Directorate General of MIneral and Coal - Indonesia
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Samtan Co., Ltd - South Korea
- Ambuja Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- Leighton Contractors Pty Ltd - Australia
- Trasteel International SA, Italy
- Oldendorff Carriers - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
- Kapuas Tunggal Persada - Indonesia
- Bulk Trading Sa - Switzerland
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Barasentosa Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- Coastal Gujarat Power Limited - India
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- White Energy Company Limited
- Vijayanagar Sugar Pvt Ltd - India
- Economic Council, Georgia
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- The University of Queensland
- Power Finance Corporation Ltd., India
- The State Trading Corporation of India Ltd
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- Bangladesh Power Developement Board
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- ICICI Bank Limited - India
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Bhatia International Limited - India
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Standard Chartered Bank - UAE
- Carbofer General Trading SA - India
- GMR Energy Limited - India
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Marubeni Corporation - India
- Karaikal Port Pvt Ltd - India
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Central Electricity Authority - India
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Australian Coal Association
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Miang Besar Coal Terminal - Indonesia
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