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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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Monday, 01 October 18
A NO-DEAL BREXIT WILL UNDOUBTEDLY HAVE CONSEQUENCES FOR IMPORTERS AND EXPORTERS - KATE JONES, THE BALTIC BRIEFING
If you live in the UK, you might be finding it difficult to get away from the Brexit debate. “Hard Brexit”, “soft Brexit”, ...
Friday, 28 September 18
INDONESIA 2018 COAL OUTPUT TARGET NOW AROUND 507 MLN T - ENERGY MINISTRY : REUTERS
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Friday, 28 September 18
FITCH RATINGS: METALLURGICAL COAL MINERS MAY CURB COSTS AS PRICES SLIP
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Wednesday, 26 September 18
IS YOUR CHARTER PARTY READY FOR 2020? - METTE KRONHOLM FRAENDE, BIMCO
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SHIPPING MARKET INSIGHT - GEORGE ILIOPOULOS
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Showing 1606 to 1610 news of total 6871 |
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- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Aboitiz Power Corporation - Philippines
- Interocean Group of Companies - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Baramulti Group, Indonesia
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Standard Chartered Bank - UAE
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- The University of Queensland
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
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- Sarangani Energy Corporation, Philippines
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- Samtan Co., Ltd - South Korea
- CNBM International Corporation - China
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- Georgia Ports Authority, United States
- PetroVietnam Power Coal Import and Supply Company
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- Jindal Steel & Power Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
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- Mjunction Services Limited - India
- International Coal Ventures Pvt Ltd - India
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Bhushan Steel Limited - India
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- Ceylon Electricity Board - Sri Lanka
- Petrochimia International Co. Ltd.- Taiwan
- Global Coal Blending Company Limited - Australia
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Mintek Dendrill Indonesia
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- Semirara Mining Corp, Philippines
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Central Electricity Authority - India
- Australian Coal Association
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- Renaissance Capital - South Africa
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Power Finance Corporation Ltd., India
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Mercuria Energy - Indonesia
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Economic Council, Georgia
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- Coalindo Energy - Indonesia
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Jaiprakash Power Ventures ltd
- GVK Power & Infra Limited - India
- Riau Bara Harum - Indonesia
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
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