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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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Monday, 26 August 13
CARRIAGE OF COAL CARGOES FROM KALIMANTAN, INDONESIA - WEST OF ENGLAND P&I CLUB
The Club has recently been advised by consulting scientists and engineers Dr J H Burgoyne and Partners (International) Limited that the number of in ...
Sunday, 25 August 13
API 8 CFR SOUTH CHINA COAL: HEADING TO NORTH
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery US$ 2.39 up month on month. The swap was moved positive ...
Sunday, 25 August 13
THE FREIGHT MARKET S7 & S8 SECTOR IS EXPECTED TO BE STEADY/FIRM NEXT WEEK - VISTAAR
COALspot.com - The freight market continued to be firm with all indices moved positive except for Panamax which was slightly down (2 pct down).
T ...
Friday, 23 August 13
US PRODUCED MORE COAL WEEK ON WEEK - EIA
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.80 million short tons (mmst) of ...
Thursday, 22 August 13
PANAMAX : PERIOD MARKET IS STILL BEING LED BY STRONGER SENTIMENT IN THE FFA'S - FEARNRESEARCH
Handy
This week started slowly as expected. Indo biz now rate APS around 7k +60k to china and around 8k+80k to India. However, there are some ships ...
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- Australian Coal Association
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- Formosa Plastics Group - Taiwan
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Gujarat Sidhee Cement - India
- PetroVietnam Power Coal Import and Supply Company
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Power Finance Corporation Ltd., India
- Uttam Galva Steels Limited - India
- Energy Development Corp, Philippines
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bangladesh Power Developement Board
- Sojitz Corporation - Japan
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Marubeni Corporation - India
- GMR Energy Limited - India
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Edison Trading Spa - Italy
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Coalindo Energy - Indonesia
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Australian Commodity Traders Exchange
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- Jindal Steel & Power Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Larsen & Toubro Limited - India
- New Zealand Coal & Carbon
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Mintek Dendrill Indonesia
- Billiton Holdings Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Salva Resources Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Petrochimia International Co. Ltd.- Taiwan
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- Carbofer General Trading SA - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Bukit Baiduri Energy - Indonesia
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Lanco Infratech Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- The Treasury - Australian Government
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- Trasteel International SA, Italy
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- CIMB Investment Bank - Malaysia
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- International Coal Ventures Pvt Ltd - India
- Indogreen Group - Indonesia
- The State Trading Corporation of India Ltd
- The University of Queensland
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
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