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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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Monday, 14 December 15
CFR SOUTH CHINA COAL SWAP IS STILL SLIDING
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 0.93(2.18%) per ton month over month.
A commodity swap ...
Sunday, 13 December 15
THE LOW VESSEL DEMANDS PUSHED DOWN BALTIC DRY INDEX FURTHER DOWN
COALspot.com: The low vessel demand across nearly all vessel sizes pushed the Baltic Exchange’s main sea freight index further down in this F ...
Sunday, 13 December 15
DRY BULK RATES KEEP ON FALLING AS LOW VESSEL DEMAND IS STILL THE NORM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market nowadays is in an endless downward spiral, which as it turns out is unable to recover, at least as long as the current balance ...
Friday, 11 December 15
US COAL PRODUCTION UP 7.7% IN WEEK ENDED DECEMBER 5, 2015
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 16.1 million shor ...
Thursday, 10 December 15
LIENING CARGO - WHICH LIEN CLAUSE APPLIES TO THE BILL OF LADING? : WIKBORG REIN | HELLENIC SHIPPING NEWS
KNOWLEDGE TO ELEVATE
In a dry bulk market where a charterer is not paying freight or hire, its counterparty is often left to consider whether ...
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- Indogreen Group - Indonesia
- Bhushan Steel Limited - India
- Singapore Mercantile Exchange
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Bhatia International Limited - India
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- The Treasury - Australian Government
- Wilmar Investment Holdings
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- Aditya Birla Group - India
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Simpson Spence & Young - Indonesia
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Indika Energy - Indonesia
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Latin American Coal - Colombia
- Billiton Holdings Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- SMC Global Power, Philippines
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- SN Aboitiz Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Star Paper Mills Limited - India
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- MS Steel International - UAE
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- Kohat Cement Company Ltd. - Pakistan
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- Price Waterhouse Coopers - Russia
- Planning Commission, India
- Romanian Commodities Exchange
- Malabar Cements Ltd - India
- VISA Power Limited - India
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Jorong Barutama Greston.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Orica Mining Services - Indonesia
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