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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, 08 January 16
DRY BULK MARKET'S CRISIS DEEPENS AS RATES ARE DROPPING TO NEW RECORD LOWS BY THE DAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
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Thursday, 07 January 16
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Wednesday, 06 January 16
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Tuesday, 05 January 16
BIG COAL MINERS PLAN HIGHER PRODUCTION THIS YEAR - THE JAKARTA POST
The country’s major coal miners plan to further boost production in 2016 although analysts estimate that an oversupply in the world’s c ...
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- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- The University of Queensland
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Larsen & Toubro Limited - India
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- Siam City Cement - Thailand
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Independent Power Producers Association of India
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- PTC India Limited - India
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- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Alfred C Toepfer International GmbH - Germany
- Central Electricity Authority - India
- Directorate General of MIneral and Coal - Indonesia
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Central Java Power - Indonesia
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Parliament of New Zealand
- Parry Sugars Refinery, India
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- Altura Mining Limited, Indonesia
- Kaltim Prima Coal - Indonesia
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- White Energy Company Limited
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
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- Coalindo Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- Borneo Indobara - Indonesia
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Iligan Light & Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Price Waterhouse Coopers - Russia
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- San Jose City I Power Corp, Philippines
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
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