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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, 24 July 19
COAL'S DEMISE QUICKENS IN EUROPE AS MARKET SHIFT IDLES PLANTS - BLOOMBERG
Commodity markets are stripping away the case for coal in Europe, moving quicker than government efforts to close the most polluting power plants.
...
Monday, 22 July 19
SUPRAMAX: THE ASIAN ARENA SAW INCREASED ACTIVITY AND STRONGER NUMBERS BEING CONCLUDED; INDONESIAN ROUNDS REMAINED FIRM - BALTIC BRIEFING
Capesize
Another week of gains as the Atlantic basin continues to be pressurised on tonnage and Brazilian cargoes keep up a steady flow. The Ca ...
Thursday, 18 July 19
WORLD TRADE IN HARD COAL ROSE BY 4.7% IN 2018 - GERMANY COAL IMPORTERS ASSOCIATION
World Trade in Hard Coal Rose by 4.7% in 2018
Hard Coal Can Prevent Stress in the Electric Power System in Germany
• Sharp decl ...
Wednesday, 17 July 19
MARKET INSIGHT - INTERMODAL
The Strait of Hormuz is one of the most important waterways in the world, connecting crude producers in the Middle East with key markets in the res ...
Tuesday, 16 July 19
KING COAL RULES IN JAPAN AS POWER UTILITIES IN THRALL TO LOW-COST FUEL - REUTERS
Japanese utilities will rely on the return of coal-fired power plants from maintenance to meet peak electricity demand this summer, highlighting th ...
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- Aditya Birla Group - India
- Parliament of New Zealand
- Port Waratah Coal Services - Australia
- Bhatia International Limited - India
- London Commodity Brokers - England
- Central Electricity Authority - India
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Petron Corporation, Philippines
- MS Steel International - UAE
- Siam City Cement - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- Meralco Power Generation, Philippines
- Kartika Selabumi Mining - Indonesia
- Wilmar Investment Holdings
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Planning Commission, India
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Goldman Sachs - Singapore
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Ambuja Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Australian Coal Association
- Africa Commodities Group - South Africa
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Ind-Barath Power Infra Limited - India
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- Ceylon Electricity Board - Sri Lanka
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- CNBM International Corporation - China
- Standard Chartered Bank - UAE
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- VISA Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Australian Commodity Traders Exchange
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Borneo Indobara - Indonesia
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- Indo Tambangraya Megah - Indonesia
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Power Finance Corporation Ltd., India
- McConnell Dowell - Australia
- Posco Energy - South Korea
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Bukit Makmur.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- The University of Queensland
- Wood Mackenzie - Singapore
- Sarangani Energy Corporation, Philippines
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- GAC Shipping (India) Pvt Ltd
- Gujarat Electricity Regulatory Commission - India
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