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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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Wednesday, 07 March 12
3RD MOZAMBIQUE COAL CONFERENCE
3rd Mozambique Coal Conference
2-4 July 2012 | Joaquim Chissano International Conference Centre , Maputo, Mozambique
http://www.immevents.com/mo ...
Wednesday, 07 March 12
DRY BULK MARKET KEEPS UP TIMID REBOUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept its rising momentum yesterday, rising for the eighth straight session, on the back of renewed demand for smaller bulk c ...
Wednesday, 07 March 12
BUKIT ASAM EYES 39% RISE IN COAL SALES - INSIDER STORIES
Insider Stories reported that, PT Bukit Asam Tbk is scouting a 39% increase in coal sales volume to 18.66 million tons this year from last year with ...
Wednesday, 07 March 12
PETROSEA SEALS US$188 MIO CONTRACT - INSIDER STORIES
Insider Stories reported that, coal mining contractor PT Petrosea Tbk has secured a US$188 million additional contract from its affiliated firm PT S ...
Monday, 05 March 12
SOUTHGOBI ANNOUNCES AGREEMENT TO SELL ITS THERMAL COAL TSAGAAN TOLGOI DEPOSIT FOR US$ 30 MILLION
SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) announced today an agreement to sell its thermal coal property, the Tsagaan Tolgoi Deposit to Modun Re ...
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- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- GVK Power & Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- Intertek Mineral Services - Indonesia
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- Karbindo Abesyapradhi - Indoneisa
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
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- Tata Chemicals Ltd - India
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- GN Power Mariveles Coal Plant, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Xindia Steels Limited - India
- Australian Coal Association
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- ICICI Bank Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- PetroVietnam Power Coal Import and Supply Company
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- Lanco Infratech Ltd - India
- IEA Clean Coal Centre - UK
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Coalindo Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Mjunction Services Limited - India
- Gujarat Mineral Development Corp Ltd - India
- PowerSource Philippines DevCo
- Singapore Mercantile Exchange
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- Eastern Energy - Thailand
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Parliament of New Zealand
- Essar Steel Hazira Ltd - India
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Aboitiz Power Corporation - Philippines
- Gujarat Sidhee Cement - India
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Antam Resourcindo - Indonesia
- New Zealand Coal & Carbon
- Grasim Industreis Ltd - India
- Leighton Contractors Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Coal and Oil Company - UAE
- Planning Commission, India
- Star Paper Mills Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- Bhushan Steel Limited - India
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