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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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Thursday, 02 January 20
SULPHUR 2020 COMPENDIUM - HOW ARE INDIVIDUAL PORT STATES EXPECTED TO REACT? - STANDARD CLUB
KNOWLEDGE TO ELEVATE
With the new sulphur limits soon to be in force, Standard Club has been investigating the ways in which certain jurisdict ...
Monday, 30 December 19
AUSTRALIAN MINERS HIT BY LOWEST THERMAL COAL PRICE IN MORE THAN A DECADE - THE GUARDIAN
Australian coal exporters have experienced the biggest annual drop in thermal coal prices in more than a decade during 2019, raising doubts about i ...
Monday, 30 December 19
INDIA'S COAL IMPORTS RISE 4% TO 161.43 MT IN APRIL-NOVEMBER 2019 - PTI
The country’s coal imports registered an increase of 4.4 per cent to 161.43 million tonnes (MT) in the April-November period of the ongoing f ...
Sunday, 29 December 19
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Sunday, 29 December 19
IMO 2020 COMPLIANCE: IT'S UP TO US TO BE GOOD CITIZENS - IBIA
One of the concerns around implementation of the 0.50% sulphur limit has been, and continues to be, the need for effective enforcement to ensure a ...
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Showing 1216 to 1220 news of total 6871 |
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- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- Chamber of Mines of South Africa
- IHS Mccloskey Coal Group - USA
- PTC India Limited - India
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- VISA Power Limited - India
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Borneo Indobara - Indonesia
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- Central Electricity Authority - India
- Australian Coal Association
- Singapore Mercantile Exchange
- Makarim & Taira - Indonesia
- London Commodity Brokers - England
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Vedanta Resources Plc - India
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- Wood Mackenzie - Singapore
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- Bhushan Steel Limited - India
- Sical Logistics Limited - India
- Banpu Public Company Limited - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Planning Commission, India
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- Attock Cement Pakistan Limited
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Kumho Petrochemical, South Korea
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- Coal and Oil Company - UAE
- Electricity Authority, New Zealand
- ASAPP Information Group - India
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Deloitte Consulting - India
- Rashtriya Ispat Nigam Limited - India
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- ICICI Bank Limited - India
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
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