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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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Wednesday, 25 December 19
COVER FOR WAR AND TERRORISM RISKS, AND COVER IN RESPECT OF BIOLOGICAL AND BIO-CHEMICAL WEAPONS - 2020 POLICY YEAR: AMERICAN CLUB
KNOWLEDGE TO ELEVATE
This Circular describes the arrangements which have been made to provide special cover for war and terrorism risks, and c ...
Wednesday, 25 December 19
EXHAUST GAS CLEANING SYSTEMS (SCRUBBER) GUIDANCE - THE STANDARD CLUB
KNOWLEDGE TO ELEVATE
In a few weeks, IMO’s ‘global sulphur cap’ will take effect. The permitted levels of SOx in ship emissi ...
Wednesday, 25 December 19
INDONESIAN BUKIT ASAM TARGETS TO MINE 30 MLN T OF COAL IN 2020 - REUTERS
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Wednesday, 25 December 19
SHIPPING MARKET INSIGHT - INTERMODAL
As another year in the shipping industry is coming to an end, it is interesting to look at the dry bulk and tanker markets and how these performed ...
Monday, 23 December 19
VLSFO PRICING & AVAILABILITY NEEDS CAREFUL WATCHING - INTEGR8 FUELS
As we approach January 1st 2020 , the VLSFO price premium to HSFO has widened considerably
We are clearly well into the IMO 2020 transition; ch ...
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Showing 1226 to 1230 news of total 6871 |
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- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- PTC India Limited - India
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- The University of Queensland
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- AsiaOL BioFuels Corp., Philippines
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- Central Electricity Authority - India
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Global Coal Blending Company Limited - Australia
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Baramulti Group, Indonesia
- Australian Coal Association
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- Anglo American - United Kingdom
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Makarim & Taira - Indonesia
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Merrill Lynch Commodities Europe
- New Zealand Coal & Carbon
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Bhushan Steel Limited - India
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- Central Java Power - Indonesia
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- Commonwealth Bank - Australia
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Edison Trading Spa - Italy
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
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