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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, 21 January 22
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Rising trading volume and higher-than-benchmark tariffs in the 2022 bilateral contracts signed between Chinese power generation companies (gencos) ...
Thursday, 20 January 22
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Sunday, 09 January 22
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- Videocon Industries ltd - India
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sical Logistics Limited - India
- Wood Mackenzie - Singapore
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Planning Commission, India
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Romanian Commodities Exchange
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Marubeni Corporation - India
- Anglo American - United Kingdom
- VISA Power Limited - India
- Heidelberg Cement - Germany
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- Bayan Resources Tbk. - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- ICICI Bank Limited - India
- London Commodity Brokers - England
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- Kartika Selabumi Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- Binh Thuan Hamico - Vietnam
- Meenaskhi Energy Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
- The University of Queensland
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- White Energy Company Limited
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Central Java Power - Indonesia
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Chettinad Cement Corporation Ltd - India
- San Jose City I Power Corp, Philippines
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Chamber of Mines of South Africa
- Interocean Group of Companies - India
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Maheswari Brothers Coal Limited - India
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Wilmar Investment Holdings
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Altura Mining Limited, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
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