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, 15 July 15
ANY FUTURE IRAN OIL DEAL WILL BOOST SUPPLY FUNDAMENTALS WITH TANKER OWNERS HOPING FROM TEHRAN TO QUICKLY BOOST ITS PRODUCTION
With the Greek “Euro-drama” apparently over, at least for now, Iran’s oil deal still remains elusive, with any potential agreemen ...
Tuesday, 14 July 15
FOB NEWCASTLE COAL SWAPS MAINTAIN OVERALL NEGATIVE TONE THIS PAST WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q3’ 2015 delivery down $ 1.02 per MT (-2.23%) month over month to US$ 44.68 per mt. The swap ...
Tuesday, 14 July 15
CFR SOUTH CHINA COAL SWAPS DECLINE THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for Q3’ 2015 delivery declined US$ 1.47 (2.82%) per MT month over month.
A commodity swap ...
Monday, 13 July 15
THERMAL COAL IMPORTS SOAR 23 PER CENT TO 24.08 MILLION TONNES AT 12 MAJOR INDIAN PORTS
Import of thermal coal jumped 23 per cent to 24.08 million tonnes at 12 major ports in the first quarter of the fiscal, even as the government cont ...
Monday, 13 July 15
THE DRY BULK MARKET CLOSED ON A POSITIVE TONE THIS PAST WEEK
COALspot.com: Despite Greece crisis and turmoil in the stock market across the world , the freight market overall was firm and up in all segments t ...
|
|
|
Showing 2926 to 2930 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- Petrochimia International Co. Ltd.- Taiwan
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Chamber of Mines of South Africa
- Leighton Contractors Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Bukit Baiduri Energy - Indonesia
- Power Finance Corporation Ltd., India
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Anglo American - United Kingdom
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- Commonwealth Bank - Australia
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- Toyota Tsusho Corporation, Japan
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Siam City Cement PLC, Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Malabar Cements Ltd - India
- ICICI Bank Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- Mintek Dendrill Indonesia
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Vedanta Resources Plc - India
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Agrawal Coal Company - India
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- Ambuja Cements Ltd - India
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Xindia Steels Limited - India
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Maheswari Brothers Coal Limited - India
- Eastern Coal Council - USA
- Makarim & Taira - Indonesia
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Samtan Co., Ltd - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Indonesian Coal Mining Association
- Merrill Lynch Commodities Europe
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Jaiprakash Power Ventures ltd
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Parry Sugars Refinery, India
- Alfred C Toepfer International GmbH - Germany
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- Indogreen Group - Indonesia
- Tata Chemicals Ltd - India
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- CIMB Investment Bank - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Kobexindo Tractors - Indoneisa
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- Mjunction Services Limited - India
- Bayan Resources Tbk. - Indonesia
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
|
| |
| |
|
