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.
|
|
Thursday, 30 April 15
IRON ORE PLAYS EXPECTED TO SHAPE UP MAY DRY BULK SCHEDULE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Market plays in the iron ore commodities’ markets, are expected to carve out the future demand for the shipping industry as well, said Allied ...
Wednesday, 29 April 15
MARKET INSIGHT - INTERMODAL
The figures of China’s slowing down imports of coking coal for the first quarter of the year are coming to confirm what everybody was expecti ...
Wednesday, 29 April 15
SHIPBUILDERS START OFFERING DISCOUNTS FOR DRY BULK NEWBUILDINGS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
It took a while, but now it appears that some shipbuilders are beginning to adjust their price lists to the new grim reality of the dry bulk market ...
Tuesday, 28 April 15
FOB INDONESIA COAL SWAP DECLINED M-O-M; INCREASED W-O-W
COALspot.com: Indonesian coal swap for delivery Q2 2015 gained week over week but declined month on month.
The Q2 swap was declined US$ 0.15 ( ...
Tuesday, 28 April 15
Q2' 15 FOB RICHARDS BAY COAL SWAP CLOSED 4.18% HIGHER FROM MONTH AGO
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q2' 2015 increased month over month and slightly week over week.
The Q2 swap ha ...
|
|
|
Showing 3046 to 3050 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Ministry of Finance - Indonesia
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- European Bulk Services B.V. - Netherlands
- PNOC Exploration Corporation - Philippines
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Independent Power Producers Association of India
- Jaiprakash Power Ventures ltd
- Alfred C Toepfer International GmbH - Germany
- Australian Commodity Traders Exchange
- Ind-Barath Power Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- Gujarat Sidhee Cement - India
- Salva Resources Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Sakthi Sugars Limited - India
- Energy Development Corp, Philippines
- Malabar Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Planning Commission, India
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- Bahari Cakrawala Sebuku - Indonesia
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Anglo American - United Kingdom
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- Petron Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Intertek Mineral Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
- MS Steel International - UAE
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- IHS Mccloskey Coal Group - USA
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- Eastern Coal Council - USA
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- PTC India Limited - India
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- Africa Commodities Group - South Africa
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- The University of Queensland
- Xindia Steels Limited - India
- Economic Council, Georgia
- Indo Tambangraya Megah - Indonesia
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Uttam Galva Steels Limited - India
- Georgia Ports Authority, United States
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- Parliament of New Zealand
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement - Thailand
- Wood Mackenzie - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
|
| |
| |
|
