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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, 19 July 13
U.S.COAL PRODUCTION TOTALED APPROXIMATELY 19.60 MMST WEEK ENDED JULY 13
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 19.60 million short tons (mmst) of ...
Friday, 19 July 13
TNPL IS LOOKING FOR 300 K MT OF 6000 GAD COAL FOR FIVE MONTH
COALspot.com - Tamil Nadu Newsprint & Papers Ltd. , an Indian paper maker, is seeking 300,000 metric tons ± 5% (In 5 shipments about 60,0 ...
Thursday, 18 July 13
3RD ANNUAL FLOATING TERMINALS, INDONESIA
Commercial applications for offshore transshipment facilities
Floating Terminal solutions are increasingly being deployed by miners, independent ...
Thursday, 18 July 13
THE CAPE MARKET APPEARS TO BE HOLDING FIRM - FEARNLEYS AS
Handy
In the Pacific, market maintained similar levels during the week. There is several Indo coal orders in the market, ships passing Singapore fi ...
Thursday, 18 July 13
DRY BULK MARKETS RETAINS RECENT GAINS, MOVES SIDEWAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept on moving sideways this week, as evidenced by the latest trends of the industry's benchmark, the Baltic Dry Index (BDI ...
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- Petron Corporation, Philippines
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- European Bulk Services B.V. - Netherlands
- Baramulti Group, Indonesia
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Ceylon Electricity Board - Sri Lanka
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- PTC India Limited - India
- Interocean Group of Companies - India
- GVK Power & Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Meralco Power Generation, Philippines
- New Zealand Coal & Carbon
- SMG Consultants - Indonesia
- Essar Steel Hazira Ltd - India
- LBH Netherlands Bv - Netherlands
- Star Paper Mills Limited - India
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- Global Business Power Corporation, Philippines
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- Sinarmas Energy and Mining - Indonesia
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Bharathi Cement Corporation - India
- Vedanta Resources Plc - India
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- Intertek Mineral Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Posco Energy - South Korea
- Manunggal Multi Energi - Indonesia
- Port Waratah Coal Services - Australia
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- Carbofer General Trading SA - India
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- The University of Queensland
- Makarim & Taira - Indonesia
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Jindal Steel & Power Ltd - India
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- Ministry of Transport, Egypt
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Savvy Resources Ltd - HongKong
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- ASAPP Information Group - India
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Eastern Coal Council - USA
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Orica Mining Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- Bulk Trading Sa - Switzerland
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Planning Commission, India
- Mjunction Services Limited - India
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Sojitz Corporation - Japan
- GMR Energy Limited - India
- Bangladesh Power Developement Board
- CIMB Investment Bank - Malaysia
- Chamber of Mines of South Africa
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
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