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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, 02 June 17
U.S THE PAST WEEK'S COAL PRODUCTION ESTIMATE UP 4.4% - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 15 million short tonnes ...
Wednesday, 31 May 17
MARKET INSIGHT - KONSTANTINOS KAKAVITSAS
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Tuesday, 30 May 17
MARKET ANALYSIS - GEORGE LAZARIDIS
Despite the fair performance that has been noted in the Chinese economy over the past 5 months, we have started to see an increase in the skepticis ...
Friday, 26 May 17
MOST COAL PLANTS IN THE UNITED STATES WERE BUILT BEFORE 1990 - EIA
Coal-fired electricity generators accounted for 25% of operating electricity generating capacity in the United States and generated about 30% of U. ...
Friday, 26 May 17
U.S WEEKLY COAL OUTPUT ESTIMATE UP 6.3% W/W
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 14.3 million short ton ...
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Showing 2036 to 2040 news of total 6871 |
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- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Bhatia International Limited - India
- Indika Energy - Indonesia
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- Directorate General of MIneral and Coal - Indonesia
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- Baramulti Group, Indonesia
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
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- Wood Mackenzie - Singapore
- Alfred C Toepfer International GmbH - Germany
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
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- Jorong Barutama Greston.PT - Indonesia
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- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- Videocon Industries ltd - India
- Port Waratah Coal Services - Australia
- McConnell Dowell - Australia
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- Chamber of Mines of South Africa
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- Salva Resources Pvt Ltd - India
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- Kohat Cement Company Ltd. - Pakistan
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
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- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
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- Orica Australia Pty. Ltd.
- Globalindo Alam Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- White Energy Company Limited
- Australian Coal Association
- Commonwealth Bank - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- CNBM International Corporation - China
- Borneo Indobara - Indonesia
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- The State Trading Corporation of India Ltd
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- PTC India Limited - India
- LBH Netherlands Bv - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
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- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Heidelberg Cement - Germany
- Attock Cement Pakistan Limited
- Bulk Trading Sa - Switzerland
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- The University of Queensland
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- GN Power Mariveles Coal Plant, Philippines
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- Gujarat Sidhee Cement - India
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- New Zealand Coal & Carbon
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- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Petron Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
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- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
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- Australian Commodity Traders Exchange
- Samtan Co., Ltd - South Korea
- GMR Energy Limited - India
- Central Java Power - Indonesia
- Kapuas Tunggal Persada - Indonesia
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- SMG Consultants - Indonesia
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- Global Business Power Corporation, Philippines
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- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
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- Pendopo Energi Batubara - Indonesia
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- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
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- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- Kaltim Prima Coal - Indonesia
- Anglo American - United Kingdom
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- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- Ministry of Transport, Egypt
- SMC Global Power, Philippines
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
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- Trasteel International SA, Italy
- India Bulls Power Limited - India
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