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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, 16 December 15
FOB RICHARDS BAY COAL SWAP SLUMP 5.5% FROM LAST MONTH
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q1’ 2016 decline month over month and week over week.
The Q1’ 2016 &nbs ...
Wednesday, 16 December 15
MARKET INSIGHT - KATERINA RESTIS
On Friday 4th of December the meeting of OPEC was held in Vienna, Austria. Since its last meeting, oil and product stock levels have continued to r ...
Tuesday, 15 December 15
THE GOVERNMENT DECLARED THERMAL COAL BENCHMARK PRICE CRASHING ONCE AGAIN
COALspot.com: Low coal demand and excess supplies sent Indonesian benchmark coal price down to below 2009 level. HBA has slumped by 1.69% mo ...
Tuesday, 15 December 15
API 5 FOB NEWCASTLE COAL SWAP FIRM W-W; WEAK M-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery slid $.13 per ton (0.35%) month over month to US$ 37.07 per ton. The swap w ...
Monday, 14 December 15
5000 GAR CS (I) COAL INDEX DECLINE US$ 0.04 PER TON W-O-W
COALspot.com: The 5000 GAR CS (i) coal index decline US$ 0.04 per ton (-0.10 %) week over week.
According to the CS (i) coal (system generated ...
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- Bukit Asam (Persero) Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- PTC India Limited - India
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Timah Investasi Mineral - Indoneisa
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- GMR Energy Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Posco Energy - South Korea
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- GAC Shipping (India) Pvt Ltd
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- PowerSource Philippines DevCo
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- Sakthi Sugars Limited - India
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Minerals Council of Australia
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
- Australian Commodity Traders Exchange
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- Price Waterhouse Coopers - Russia
- Bangladesh Power Developement Board
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- The University of Queensland
- Meenaskhi Energy Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Economic Council, Georgia
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Interocean Group of Companies - India
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Attock Cement Pakistan Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Maharashtra Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- New Zealand Coal & Carbon
- Planning Commission, India
- White Energy Company Limited
- Marubeni Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Thiess Contractors Indonesia
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- Parry Sugars Refinery, India
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- Mercator Lines Limited - India
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- SMG Consultants - Indonesia
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
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