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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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Saturday, 17 December 11
THE FREIGHT MARKET SEEMS TO HAVE ALMOST BOTTOMED OUT AND MAY REMAIN STEADY AT THESE LEVELS CAPT REDDY
COALspot.com - The BDI and Cape index closed lower this week with BDI closing at 1,888 points (down by 1.76 pct) and Cape index at 3,572 points (dow ...
Friday, 16 December 11
DRY BULK MARKET LOSES TRACK ON CAPESIZE LOSSES, SHIP FINANCING REMAINS TROUBLESOME - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market didn’t manage to sustain earlier gains, losing track yesterday, on reduced Capesize demand and persisting troubles in smal ...
Thursday, 15 December 11
BERAU SEES INDIA AS POTENTIAL MARKET FOR LOW-CALORIE COAL - THE JAKARTA POST
The Jakarta Post reported that, Publicly listed coal mining company PT Berau Coal Energy (BRAU), the fifth largest coal producer in Indonesia, sees ...
Thursday, 15 December 11
PANAMAX HARDLY AFFECTED BY THE RECENT FIRMER TENDENCY FOR THE BIG SISTERS - FEARNBULK
Handy
The rates are more or less the same as last week. Continent/US Gulf fixing at tick below USD 10k and Gulf/Continent levels at USD 25k. Trips ...
Thursday, 15 December 11
DRY BULK RATES TO REMAIN AT CURRENT LEVELS FOR THE MOST PART IN THE COMING MONTHS SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest research note, BIMCO said that the Capesize Time Charter Average will remain at USD 20,000-30,000 per day but the tonnage oversupply w ...
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Showing 4926 to 4930 news of total 6871 |
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- Orica Australia Pty. Ltd.
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Essar Steel Hazira Ltd - India
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- IHS Mccloskey Coal Group - USA
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Edison Trading Spa - Italy
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Sidhee Cement - India
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Independent Power Producers Association of India
- Marubeni Corporation - India
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Global Coal Blending Company Limited - Australia
- Mercuria Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PTC India Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Thai Mozambique Logistica
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bharathi Cement Corporation - India
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Ceylon Electricity Board - Sri Lanka
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- Sakthi Sugars Limited - India
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Planning Commission, India
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- Bhatia International Limited - India
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Indika Energy - Indonesia
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Standard Chartered Bank - UAE
- Sarangani Energy Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
- Posco Energy - South Korea
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
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