We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Friday, 14 August 15
CONDITIONS AND COMPLEXITIES IN A TRIPARTITE AGREEMENT: BE SPECIFIC! - INCE & CO
 KNOWLEDGE TO ELEVATE
A tripartite agreement reached between the Owners, the Shippers and the Receivers provided that demurrage be paid to the Owners in the event that the Owners were found not liable for cargo contamination by an arbitration tribunal. The tripartite agreement was not specific as to which arbitration involving which parties would trigger the obligation for demurrage to be paid. The Court held that a party’s obligations under the tripartite agreement could not be triggered by an arbitration when that party was not part of the arbitration reference.
The circumstances and the judgment highlight the importance of specificity when drafting settlement agreements. This is especially the case where there are contingencies for future events and where more than two parties are involved.
The background facts
A cargo of wheat was purchased by North Star Co ICC (the “Receivers”) from Casillo Commodities Italia SpA (the “Shippers”). By a voyage charter dated 12 March 2012 between Seaglance Maritime (the “Owners”) and the Shippers/Charterers, the Owners agreed to carry the cargo from Paranaguá, Brazil to Benghazi, Libya on board the M/V Proikonissos (the “Vessel”).
Discharge commenced at Benghazi on 2 June. On 3 June, traces of soya bean and soya bean meal were discovered in the cargo and the Libyan authorities at Benghazi refused to allow the remaining cargo to be discharged.
The Shippers agreed to pay US$33,000 in additional freight to the Owners, in consideration for carrying the remaining cargo from Benghazi to Tripoli, Libya to complete discharging. However, on arrival at Tripoli, the Libyan authorities refused to allow the sampling or discharging of the remaining cargo.
The Owners, Shippers and Receivers entered into discussions to decide where to discharge the remaining cargo. During these discussions, the Owners commenced arbitration against the Shippers under the voyage charter, and against the Receivers under the bill of lading. The discussions resulted in a written agreement between the Owners, Shippers and Receivers dated 27 June (the “Tripartite Agreement”).
The Tripartite Agreement
The Tripartite Agreement provided that the Vessel would sail to Malta to discharge the remaining cargo in consideration for a further lump sum freight of US$23,000, and for the applicable bills of lading to be returned and reissued, as appropriate. The Vessel sailed to Malta and successfully completed discharge of the remainder of the cargo on 3 July. Disputes arose concerning liability for the cargo contamination and demurrage.
The Tripartite Agreement expressly defined the “Dispute” to be the dispute as to responsibility for the cargo contamination.
As the Dispute was unresolved at the time the Tripartite Agreement was drafted, it provided for specified contingencies in the event that the Owners were or were not found liable in relation to the Dispute. The contingency in question was applicable to the laytime and demurrage payable to Owners:
“Clause 4:
… (a) If Seaglance [Owners] are found by an English Arbitration tribunal to be liable in relation to the Dispute it is agreed that laytime under the Charterparty will be deemed to have been interrupted when discharging was interrupted in Benghazi, and will re-start at 0800 the working day after tendering NOR.
(b) If Seaglance [Owners] are found by an English Arbitration tribunal not to be liable in relation to the Dispute, it is agreed that the Vessel will be deemed to have been on demurrage from the expiry of laytime at Benghazi (with the exception of 1.5 days steaming time from Benghazi to Tripoli and 16 hours steaming time from Tripoli to Malta regardless of the actual steaming time) which demurrage will be earned day by day or pro rata at the rate of US$11,250 per day without any exception whatsoever until completion of discharging. Such demurrage to be paid as per clause 60 of the Charterparty.
(c) If the Dispute is resolved by negotiation then the question of whether (a) or (b) above applies will be determined in accordance with the dispute resolution provisions of this Agreement.”
The Tripartite Agreement did not provide for circumstances in which there were multiple arbitrations. More specifically, the Tripartite Agreement did not state by which tribunal Owners were to be found liable or not in order to trigger clause 4.
Arbitration proceedings
In the arbitration commenced by the Owners against the Shippers, each party appointed an arbitrator but no further substantive steps were taken.
However, in the arbitration commenced by the Owners against Receivers, the Tribunal was fully constituted and the matter proceeded to a hearing. This was unknown to the Shippers. The Owners sought a declaration from the Tribunal that the Owners were not liable in respect of the cargo contamination.
The Receivers initially argued that the Owners were liable for the cargo contamination but, shortly before the hearing, agreed to withdraw their defence and counter-claim, and wrote to the Tribunal to that effect. The Tribunal proceeded to issue an award declaring that the Owners were not liable for the alleged cargo contamination.
The Owners sought to use this award to claim demurrage in the agreed amount of US$ 218,936 from the Shippers pursuant to clause 4(b) of the Tripartite Agreement. The Shippers disputed that the award was applicable to clause 4(b) and refused to pay the demurrage claimed.
The question put to the Court was whether an award issued in the arbitration between the Owners and the Receivers was capable of triggering the obligations under clause 4(b) as between
Owners and Shippers.
The Shippers argued that only an arbitration to which the Shippers were a party could be capable of triggering the obligations under clause 4(b). The Owners argued that an award which was solely in relation to the “Dispute”, being the cargo contamination, was enough to trigger the Shippers’ obligations under the clause.
The Commercial Court decision
The Shippers were successful in their application for summary judgment.
The Court held that the Shippers were unlikely to have intended to bind their conditional obligations under the Tripartite Agreement to an arbitration to which they were not a party.
To have intended otherwise would mean that the Shippers would have waived their rights to present their own evidence, to submit their own arguments and, ultimately, forgo any right to control the arbitration.
The Court also found that there were three possible claims contemplated under the Tripartite Agreement:
a claim brought by the Receivers against the Owners under the bill of lading for the contamination of cargo;
a claim brought by the Owners against the Shippers under the charterparty in respect of demurrage; and,
a claim brought by the Shippers against the Owners under the charterparty for the cargo contamination.
Clause 4 dealt only with any laytime and demurrage claim: the second of the three disputes above. The Court held, therefore, that it was only intended to be applicable in respect of a laytime and demurrage dispute rather than all three possible disputes.
Comment
The practical problems regarding the discharge of cargo were resolved on a commercial basis by the Tripartite Agreement. However, some of the provisions in the Tripartite Agreement were found to be ambiguous; this led to confusion and dispute when the time came to enforce its terms.
It is of paramount importance in any agreement, regardless of the complexity, that the exact obligations of each party are expressly stated, and the circumstances under which those obligations are to be performed are clearly set out.
Source: Ince & Co
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Wednesday, 19 August 15
FOB INDONESIA COAL SWAPS CONTINUE FLAT TREND LINE THIS WEEK
COALspot.com: Indonesian coal swap for delivery 4Q 2015 declined month on month and flat week over week, this past week.
The 4Q swap was decli ...
Tuesday, 18 August 15
DRY BULK: MARKETS HAVE CONTINUED TO BE SEVERELY CHALLENGED - CLARKSONS
The dry bulk markets have continued to be severely challenged with freight rates falling during the period to below operating expense. The Baltic D ...
Tuesday, 18 August 15
1Q'16 FOB RICHARDS BAY COAL SWAP FALLS BELOW $54 A TON
COALspot.com: API4 FOB Richards Bay Coal swap for delivery 4Q' 2015 declined month over month and week over week.
The 4Q swap was down US$ ...
Tuesday, 18 August 15
2Q' 16 FOB NEWCASTLE COAL SWAP CLOSED AT $43 PER MT W/E 14 AUGUST
COALspot.com: API 5 FOB Newcastle Coal swap for 4Q’ 2015 delivery down $ 1.08 per MT (-2.46%) month over month to US$ 42.82 per mt. The swap ...
Monday, 17 August 15
TROUBLED DRY BULK MARKET FACES TURMOIL AS CHINESE COAL IMPORTS REMAIN WEAK - BIMCO
The demand for coal in China continues to diminish. So much in fact that India is expected to succeed China as the world’s largest imp ...
|
|
|
Showing 2861 to 2865 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- The University of Queensland
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- European Bulk Services B.V. - Netherlands
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Miang Besar Coal Terminal - Indonesia
- Vedanta Resources Plc - India
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- Coalindo Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- Trasteel International SA, Italy
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- Alfred C Toepfer International GmbH - Germany
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- Coal and Oil Company - UAE
- PetroVietnam Power Coal Import and Supply Company
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Central Java Power - Indonesia
- Attock Cement Pakistan Limited
- Baramulti Group, Indonesia
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Mercator Lines Limited - India
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Banpu Public Company Limited - Thailand
- Chettinad Cement Corporation Ltd - India
- Bhushan Steel Limited - India
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Makarim & Taira - Indonesia
- Sakthi Sugars Limited - India
- Planning Commission, India
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Tata Chemicals Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Ministry of Transport, Egypt
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Anglo American - United Kingdom
- Minerals Council of Australia
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
|
| |
| |
|
