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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, 13 October 17
U.S. COAL EXPORTS FOR THE FIRST SEVEN MONTHS OF 2017 TOTALED 51 MMST; UP 62% YOY, EIA DATA SHOWS
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 15.2 million shor ...
Thursday, 12 October 17
THERMAL COAL PRICES IN EUROPE AND ASIA PUSHING HIGHER - DANIEL HYNES
Coal markets took the lead from the oil market, with thermal coal prices in Europe and Asia pushing higher says Daniel Hynes,Senior Commodity Strat ...
Wednesday, 11 October 17
2020 DEBATE AT IBIA'S LISW EVENT: COMPLIANCE & ENFORCEMENT – IT'S COMPLICATED : IBIA
There is no doubt about the start date for the 0.50% marine fuel sulphur limit in MARPOL Annex VI, but questions remain around how it will be enfor ...
Wednesday, 11 October 17
SHIPPING MARKET INSIGHT - TIMOS PPADIMITRIOU
With the majority of second-hand tonnage transactions taking place in the dry bulk sector it’s easy to lose sight of what is happening over a ...
Tuesday, 10 October 17
DELIVERY OF CARGO WITHOUT ORIGINAL BILLS OF LADING - UK P&I CLUB
KNOWLEDGE TO ELEVATE
- It is common in a lot of trades, whether bulk or oil, to accept a Letter of Indemnity (“LOI”) for non-produ ...
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Showing 1916 to 1920 news of total 6871 |
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- IHS Mccloskey Coal Group - USA
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Formosa Plastics Group - Taiwan
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
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- Indonesian Coal Mining Association
- Minerals Council of Australia
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- Cement Manufacturers Association - India
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- Alfred C Toepfer International GmbH - Germany
- Sical Logistics Limited - India
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- Thai Mozambique Logistica
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- White Energy Company Limited
- SMC Global Power, Philippines
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- Anglo American - United Kingdom
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- Central Electricity Authority - India
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- Larsen & Toubro Limited - India
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- Singapore Mercantile Exchange
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- Mercuria Energy - Indonesia
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- Economic Council, Georgia
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- Orica Mining Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- London Commodity Brokers - England
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- OPG Power Generation Pvt Ltd - India
- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- Latin American Coal - Colombia
- The University of Queensland
- Trasteel International SA, Italy
- Coalindo Energy - Indonesia
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- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indian Energy Exchange, India
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- Sree Jayajothi Cements Limited - India
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
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- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The State Trading Corporation of India Ltd
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- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Parliament of New Zealand
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- Star Paper Mills Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
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- Billiton Holdings Pty Ltd - Australia
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- Bhatia International Limited - India
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- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Uttam Galva Steels Limited - India
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Planning Commission, India
- Independent Power Producers Association of India
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- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Binh Thuan Hamico - Vietnam
- Ministry of Transport, Egypt
- Interocean Group of Companies - India
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- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
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- Wilmar Investment Holdings
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- Australian Commodity Traders Exchange
- Renaissance Capital - South Africa
- Medco Energi Mining Internasional
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
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- Power Finance Corporation Ltd., India
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