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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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Wednesday, 13 January 16
U.S. COAL PRODUCTION DECLINED BY 109 MMST IN 2015; COAL EXPORTS DECREASED 21% Y-O-Y
COALspot.com: U.S. coal production declined by 109 million short tons (MMst) (11%) in 2015, the largest decline ever recorded, says EIA.
The 2 ...
Wednesday, 13 January 16
SHIPPING MARKET INSIGHT - GEORGE ILIOPOULOS
Going through the second week of 2016 we could easily argue that at this point there are no visible signs of an imminent recovery in the Dry Bulk m ...
Wednesday, 13 January 16
IRON ORE IMPASSE - A FAILED CLAIM FOR CONVERSION - CLYDE & CO
KNOWLEDGE TO ELEVATE
In the recent case of the “Bao Yue”, the English High Court found that the bill of lading holder was liable t ...
Tuesday, 12 January 16
5700 GAR COAL FOR DELIVERY WITHIN Q1 FELL 0.91% WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin moved South direction week over week to averaging $39.96 per ton on last Friday, acc ...
Monday, 11 January 16
PORT OF NEWCASTLE SHIPPED 20% MORE COAL IN DECEMBER 2015; AVERAGE SELLING PRICE DECLINE 3.43%
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $1.129 billio ...
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Showing 2611 to 2615 news of total 6871 |
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- Australian Commodity Traders Exchange
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- Africa Commodities Group - South Africa
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Parliament of New Zealand
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Billiton Holdings Pty Ltd - Australia
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Heidelberg Cement - Germany
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Malabar Cements Ltd - India
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- Romanian Commodities Exchange
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indika Energy - Indonesia
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Chettinad Cement Corporation Ltd - India
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Uttam Galva Steels Limited - India
- Sojitz Corporation - Japan
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Savvy Resources Ltd - HongKong
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Maharashtra Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Price Waterhouse Coopers - Russia
- Ministry of Finance - Indonesia
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Antam Resourcindo - Indonesia
- Kepco SPC Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- White Energy Company Limited
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Petrochimia International Co. Ltd.- Taiwan
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Chamber of Mines of South Africa
- Sindya Power Generating Company Private Ltd
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Kumho Petrochemical, South Korea
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- The University of Queensland
- Meenaskhi Energy Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bangladesh Power Developement Board
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- Holcim Trading Pte Ltd - Singapore
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Jorong Barutama Greston.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- Metalloyd Limited - United Kingdom
- Toyota Tsusho Corporation, Japan
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Ind-Barath Power Infra Limited - India
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