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Tuesday, 08 December 15
HOW TO MITIGATE LEGAL RISKS WHEN PURCHASING BUNKERS - LESSONS LEARNED FROM THE OW BUNKER COLLAPSE - THE SWEDISH CLUB
 KNOWLEDGE TO ELEVATE
About a year has passed since OW Bunker & Trading A/S filed for bankruptcy. The collapse shows that there are significant risks for shipowners and charterers in using intermediaries for the supply of bunkers. On the one hand the intermediary issues an invoice in capacity as the contractual supplier and should be paid for the bunkers. On the other hand do physical suppliers in some jurisdictions have an independent right to claim the vessel for unpaid bunkers. As a result, there is an inherent risk for competing claims against vessels to the extent the intermediary fails to pass on the payment to the physical supplier.
The collapse of OW Bunker has not only generated disputes involving competing claims against vessel owners by contractual suppliers and physical suppliers, but also charterparty disputes between owners and charterers. The Club’s FD&D lawyers presently handle about 40 cases involving disputes following the collapse of OW Bunkers. The total sum of these disputes is in excess of USD 20 million. The legal issues are complex and case specific. For instance, it has been argued that OW Bunker or their assignees cannot claim payment at all under English law since they never owned the bunkers for which they issued an invoice. This argument was recently dismissed by the English Court of Appeal, see the Club’s Member Alert of 23 October 2015. In addition, a court decision in one country may not apply in another country. Therefore, as of today, no universal solution to the underlying dilemma with competing claims is in sight.
The OW Bunker collapse has generated important lessons for the future. The following steps may be taken by owners and charterers in order to bring contractual clarity in relation to the supply of bunkers, as well as mitigate the risk for competing claims:
Insert BIMCOs non-lien clause in the charterparty, see Special Circular from BIMCO.
Prior to ordering bunkers, the supplier should be provided with the following notice (this is linked to the above non-lien clause):
To: Bunker Sellers (Name, address and contact details)
Take note that we, (Charterers: Name, address and contact details) are today (date) ordering (specification of) bunkers for supply at (port or place) on or about (date) on our account and our credit to MV/MT………… on charter to us and that the bunkers to be supplied to the Vessel are solely for our account as Charterers and that neither the Vessel, the Owners nor the Master is a party to the bunker supply contract and no lien, encumbrance or any rights shall arise on the Vessel.
Yours faithfully
Charterers of MV/MT………
Avoid any reference on the Bunker Delivery Receipt to the physical supplier’s own Terms and Conditions in order to avoid creating a direct contract between the vessel owner and the supplier.
Stamp and sign the Bunker Delivery Receipt with the following wording:
Vessel…………………
This bunker supply is for account of vessel’s time charterers, Messrs………………
I herewith declare that neither owners / bareboat charterers nor the vessel are responsible for payment of this supply and no lien or other claim against the vessel can therefore arise.
Date:
……………………………………………………………
Master / Chief Engineer
Explore possibilities to take out insurance to protect against the risk of charterer (or bunker intermediary) insolvency
As mentioned above, the use of a bunker intermediary will entail an enhanced risk in relation to the supply of bunkers. Members may therefore consider agreeing to only deal with physical bunker suppliers directly and, if so, a provision to that effect should be inserted in any time charterparty.
In the event an intermediary is used the following precautionary steps can be taken:
Endeavour to ensure that the intermediary has an appropriate credit insurance.
Endeavour to agree to pay the intermediary the profit element only by way of paying the physical supplier separately, or by way of making one payment to the intermediary which is split into two; the intermediary receives the profit element as principal and the substantive sum as agent for the physical supplier. At least the first alternative needs to be expressed in the contract with the intermediary.
Endeavour to ensure that the ultimate buyer has the longest credit period in the contractual chain by way of a term in the contract with the intermediary that the intermediary has to first pay their supplier in full for the bunkers before the ultimate buyer is obliged to pay them.
Finally, a word of caution. There is no magic answer which will eliminate all legal risks in relation to the supply of bunkers. All situations differ and there are different parties involved in supply chains. However, the above constitute steps that owners and charterers can take to try to mitigate those risks as much as possible, in appropriate circumstances. It is acknowledged that the steps may be difficult to take in practice.
Source: The Swedish Club | Hellenic Shipping News
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Tuesday, 26 January 16
Q3'16 CFR SOUTH CHINA COAL SWAP DROPPED BELOW $41 A TON
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery rose US$ 0.82 (1.94%) per ton month over month.
A commodity swap is ...
Tuesday, 26 January 16
OUTLOOK FOR GLOBAL OIL MARKETS - OPEC SECRETARY GENERAL
Opening address by HE Abdalla S. El-Badri, OPEC Secretary General, at the Chatham House Conference: Middle East and North Africa Energy 2016, Theme ...
Monday, 25 January 16
5700 GAR COAL INDEX CLOSED $ 50.08 PER TON, $0.20 LOWER FROM LAST WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 1.35 percent week over week to averaging $39.39 per ton on this past Friday, ...
Monday, 25 January 16
SHOULD A DEFAULTING PARTY BE ENTITLED TO AN INNOCENT PARTY'S SAVING, FOLLOWING THEIR BREACH OF CONTRACT? - THE NEW FLAMENCO REVISITED
KNOWLEDGE TO ELEVATE
This case was addressed by the club in our of January 2015, when the High Court decision became available. The background ...
Monday, 25 January 16
DRY BULK SHIPPING: A MISERABLE START TO A NEW YEAR, WHERE THE MARKET STRUGGLES TO GROW AT ALL - BIMCO
The global production of steel dropped in 2015 compared to 2014, to a larger extent outside China, as China exported its surplus of steel to destin ...
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Showing 2591 to 2595 news of total 6871 |
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- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- GMR Energy Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- Eastern Coal Council - USA
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Semirara Mining Corp, Philippines
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- New Zealand Coal & Carbon
- Grasim Industreis Ltd - India
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- The University of Queensland
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- Jindal Steel & Power Ltd - India
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Iligan Light & Power Inc, Philippines
- Larsen & Toubro Limited - India
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- TeaM Sual Corporation - Philippines
- Siam City Cement PLC, Thailand
- Anglo American - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Deloitte Consulting - India
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Planning Commission, India
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- LBH Netherlands Bv - Netherlands
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- Kepco SPC Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Baramulti Group, Indonesia
- VISA Power Limited - India
- Star Paper Mills Limited - India
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- Merrill Lynch Commodities Europe
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- Ministry of Finance - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- Parry Sugars Refinery, India
- Goldman Sachs - Singapore
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Lanco Infratech Ltd - India
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
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