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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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Sunday, 20 January 13
S7 & S8 ROUTE FREIGHT TREND IS EXPECTED TO BE FLAT TO SOFT THIS WEEK - VISTAAR
COALspot.com - The freight market was fairly steady with all the indices BDI up by 9.21 pct closing at 837 points. The Cape index was also sharply u ...
Friday, 18 January 13
NEWLEAD HOLDINGS LTD. TO ACQUIRE TWO COAL PROPERTIES WITH ESTIMATED COAL RESERVES OF 18.6 MMT & 143.1 MMT
NewLead Holdings Ltd. Announces Signing Agreement to Acquire Properties with Estimated Coal Reserves of 18.6 Million Tons; Signing Agreement to Acqu ...
Friday, 18 January 13
DRY BULK MARKET ON THE RISE, ON STRONG DEMAND FOR CAPESIZE VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has continued its climbing trend yesterday, as the industry's benchmark, the Baltic Dry Index (BDI) was up by 39 points to 820. ...
Friday, 18 January 13
CAPESIZE : SIGNALS ARE MIXED BUT THE OVERALL TENDENCY IS POSITIVE - FEARNLEYS
Handy
The Atlantic market remained stable with USG-Feast fixed around USD 17k, according to fearnleys’s weekly report.
Continent / Medite ...
Tuesday, 15 January 13
GRANT SMITH APPOINTED GROUP MANAGING DIRECTOR OF BRAEMAR ADJUSTING
The Board of Braemar Adjusting is delighted to announce the appointment of Grant Smith as Group Managing Director of the company with immediate effe ...
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- Economic Council, Georgia
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- Minerals Council of Australia
- Tamil Nadu electricity Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- PTC India Limited - India
- Medco Energi Mining Internasional
- Attock Cement Pakistan Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- Planning Commission, India
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Wood Mackenzie - Singapore
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Sojitz Corporation - Japan
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- Formosa Plastics Group - Taiwan
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Chamber of Mines of South Africa
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Therma Luzon, Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- Central Electricity Authority - India
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Jaiprakash Power Ventures ltd
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- The University of Queensland
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- Mjunction Services Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- SN Aboitiz Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Mercator Lines Limited - India
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
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