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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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Showing 1856 to 1860 news of total 6871 |
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- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Oldendorff Carriers - Singapore
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- Larsen & Toubro Limited - India
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Planning Commission, India
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Independent Power Producers Association of India
- Indian Oil Corporation Limited
- Attock Cement Pakistan Limited
- Sojitz Corporation - Japan
- South Luzon Thermal Energy Corporation
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Latin American Coal - Colombia
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- Australian Coal Association
- Africa Commodities Group - South Africa
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Gujarat Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- Videocon Industries ltd - India
- Parliament of New Zealand
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- Altura Mining Limited, Indonesia
- Power Finance Corporation Ltd., India
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- Borneo Indobara - Indonesia
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Vedanta Resources Plc - India
- VISA Power Limited - India
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Bhushan Steel Limited - India
- Orica Mining Services - Indonesia
- PTC India Limited - India
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
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