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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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Friday, 08 January 16
DRY BULK MARKET'S CRISIS DEEPENS AS RATES ARE DROPPING TO NEW RECORD LOWS BY THE DAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Just when you would think that the dry bulk market is reaching its bottom, even as it has long surpassed all-time lows, each day that passes by at ...
Thursday, 07 January 16
FOB NEWCASTLE COAL SWAPS DELIVERY Q1'16 REMAIN FLAT W-O-W; UP M-O-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery rose another $1.23 per ton (3.35%) this past week compared to the sam ...
Thursday, 07 January 16
SHIPPING WILL REMAIN VOLATILE AND INDISPENSABLE IN 2016 - MOORE STEPHENS
The ultimate definition of an optimist has been characterised as an accordion player with an answerphone. Such extreme optimism might be difficult ...
Wednesday, 06 January 16
NEW COAL PRICE PASS-THROUGH REGULATION BENEFITS CHINA IPPS - FITCH RATINGS
Fitch Ratings says the new Coal Price Pass-through Mechanism announced by the National Development and Reform Commission (NDRC) on 31 December ...
Tuesday, 05 January 16
BIG COAL MINERS PLAN HIGHER PRODUCTION THIS YEAR - THE JAKARTA POST
The country’s major coal miners plan to further boost production in 2016 although analysts estimate that an oversupply in the world’s c ...
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Showing 2621 to 2625 news of total 6871 |
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- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Tamil Nadu electricity Board
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- TeaM Sual Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- Romanian Commodities Exchange
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- CNBM International Corporation - China
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Cement Manufacturers Association - India
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- Indika Energy - Indonesia
- Baramulti Group, Indonesia
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- Sindya Power Generating Company Private Ltd
- Bhushan Steel Limited - India
- The University of Queensland
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Parliament of New Zealand
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- Independent Power Producers Association of India
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Star Paper Mills Limited - India
- GAC Shipping (India) Pvt Ltd
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- The Treasury - Australian Government
- Bhatia International Limited - India
- Australian Coal Association
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Meenaskhi Energy Private Limited - India
- Altura Mining Limited, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Commonwealth Bank - Australia
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- White Energy Company Limited
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
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