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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, 27 December 17
SULPHUR EMISSIONS: THE OUTSTANDING CHALLENGES - UK P&I CLUB
The International Maritime Organization (IMO) has been working to reduce the harmful impacts of shipping on the environment.
It adopted Annex ...
Friday, 22 December 17
COAL INDIA BOARD CLEARS THE WAY FOR SCHEME FOR HARNESSING AND ALLOCATING KOYALA (COAL) TRANSPARENTLY IN INDIA - PIB
The Coal India Limited (CIL) Board cleared the decks for signing of Fuel Supply Agreement (FSA), for supply of coal.
According to Press Inform ...
Friday, 22 December 17
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ESTIMATED U.S. WEEKLY COAL OUTPUT SLIPS SLIGHTLY - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 15.2 million short tons ...
Thursday, 21 December 17
COAL CONSUMPTION DROPS AS GAS AND RENEWABLES CHEW INTO TRADITIONAL MARKETS - BABS MCHUGH
"The share of coal in the global energy mix is forecast to decline from 27 per cent last year to 26 per cent in 2022"
Global demand ...
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Showing 1841 to 1845 news of total 6871 |
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- Eastern Coal Council - USA
- Australian Coal Association
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- Manunggal Multi Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Central Electricity Authority - India
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Xindia Steels Limited - India
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Interocean Group of Companies - India
- Ceylon Electricity Board - Sri Lanka
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Karaikal Port Pvt Ltd - India
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- CIMB Investment Bank - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Indogreen Group - Indonesia
- Intertek Mineral Services - Indonesia
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Sakthi Sugars Limited - India
- Coastal Gujarat Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- Bhoruka Overseas - Indonesia
- Energy Link Ltd, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Bhatia International Limited - India
- The University of Queensland
- Rashtriya Ispat Nigam Limited - India
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- Star Paper Mills Limited - India
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- Kalimantan Lumbung Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Commonwealth Bank - Australia
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- GAC Shipping (India) Pvt Ltd
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Ind-Barath Power Infra Limited - India
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- ICICI Bank Limited - India
- The Treasury - Australian Government
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Globalindo Alam Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- CNBM International Corporation - China
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
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