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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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Friday, 06 April 18
TOP MINER BHP QUITS WORLD COAL ASSOCIATION OVER CLIMATE CLASH - BLOOMBERG
BHP Billiton Ltd. has severed ties with the World Coal Association over a clash of views on how to combat climate change, with the mining giant say ...
Thursday, 05 April 18
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Tuesday, 03 April 18
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Monday, 02 April 18
THE FREIGHT RATES ARE EXPECTED TO BE FLAT TO SOFT, SAYS VISTAAR
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Monday, 02 April 18
THIESS TO DELIVER $150M SENAKIN CONTRACT EXTENSION
Thiess has secured a $150 million contract extension to provide mine services at Arutmin’s Senakin coal mine in South Kalimantan, Indonesia.
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- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- PNOC Exploration Corporation - Philippines
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Romanian Commodities Exchange
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
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- Economic Council, Georgia
- Parliament of New Zealand
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- Savvy Resources Ltd - HongKong
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- Wilmar Investment Holdings
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- Australian Coal Association
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- Borneo Indobara - Indonesia
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Deloitte Consulting - India
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- CNBM International Corporation - China
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- Tata Chemicals Ltd - India
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- VISA Power Limited - India
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- OPG Power Generation Pvt Ltd - India
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Central Electricity Authority - India
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Goldman Sachs - Singapore
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Australian Commodity Traders Exchange
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Mjunction Services Limited - India
- Madhucon Powers Ltd - India
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- Holcim Trading Pte Ltd - Singapore
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