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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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Thursday, 24 March 16
NEWBUILDINGS' PRICES HAVE STARTED TO COME DOWN - ALLIED | HELLENIC SHIPPING NEWS
Newbuildings’ prices have started to come down, as demand has remained subdued for quite some time now. In its latest weekly report, shipbrok ...
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Monday, 21 March 16
INDONESIAN 4200 GAR COAL INDEX ROSE $0.12 OR, 0.44% WEEK OVER WEEK; INDEX CLOASED AT $27.19 A TON
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THE BALTIC DRY INDEX ROSE SLIGHTLY WEEK OVER WEEK; BCI UP 11.93%
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued rose this week helped by higher rates for Cape ...
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Showing 2511 to 2515 news of total 6871 |
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- Bayan Resources Tbk. - Indonesia
- Chamber of Mines of South Africa
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- Planning Commission, India
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Australian Commodity Traders Exchange
- Renaissance Capital - South Africa
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Energy Development Corp, Philippines
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
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- Indika Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Bukit Asam (Persero) Tbk - Indonesia
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
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- Posco Energy - South Korea
- Singapore Mercantile Exchange
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Alfred C Toepfer International GmbH - Germany
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Minerals Council of Australia
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- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- LBH Netherlands Bv - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
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- Vijayanagar Sugar Pvt Ltd - India
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Star Paper Mills Limited - India
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- IHS Mccloskey Coal Group - USA
- Cigading International Bulk Terminal - Indonesia
- Orica Mining Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Vedanta Resources Plc - India
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- Romanian Commodities Exchange
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- Bhoruka Overseas - Indonesia
- Kepco SPC Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wilmar Investment Holdings
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- Power Finance Corporation Ltd., India
- PTC India Limited - India
- Economic Council, Georgia
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
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- Savvy Resources Ltd - HongKong
- Indo Tambangraya Megah - Indonesia
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- Australian Coal Association
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- Parliament of New Zealand
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aboitiz Power Corporation - Philippines
- Thiess Contractors Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
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- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Siam City Cement - Thailand
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