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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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Thursday, 10 December 15
CANADIAN MINER TECK ANNOUNCES LNG HAUL TRUCK PILOT PROJECT
Teck Resources Limited is piloting the use of liquefied natural gas (LNG) as a fuel source in six haul trucks at its Fording River steelmakin ...
Thursday, 10 December 15
FOB RICHARDS BAY COAL Q3' 16 DELIVERY SWAP WAS CLOSED 7.27% PER TON LOWER COMPARED TO AVERAGE Q1' 16 DELIVERY PRICE
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, 09 December 15
U.S. COAL EXPORTS DECLINE IN 2015 DUE TO SLOWER GROWTH IN WORLD COAL DEMAND AND LOWER INTERNATIONAL COAL PRICES - EIA
COALspot.com: The slower growth in world coal demand and lower international coal prices have contributed to a decline in U.S. coal exports in 2015 ...
Wednesday, 09 December 15
DRY BULK EXPERIENCES THE PERFECT STORM - PANOS TSILINGIRIS
Dry bulk experiences the perfect storm as the slowing of demand predominantly because of China sat atop the exaggerated oversupply. The BDI broke t ...
Tuesday, 08 December 15
OPEC'S DECISION BODES WELL FOR THE TANKER MARKET: STRONG MIDDLE EAST CRUDE EXPORTS WILL CONTINUE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
OPEC’s latest decision to keep up oil production is seen by shipbrokers as a further boost for the tanker market. At the end of last year OPE ...
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- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- Indogreen Group - Indonesia
- Pendopo Energi Batubara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Mintek Dendrill Indonesia
- Metalloyd Limited - United Kingdom
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- Lanco Infratech Ltd - India
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- Ministry of Mines - Canada
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
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- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Parliament of New Zealand
- Planning Commission, India
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Central Electricity Authority - India
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- The University of Queensland
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ASAPP Information Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Australian Coal Association
- Banpu Public Company Limited - Thailand
- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- Kobexindo Tractors - Indoneisa
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Economic Council, Georgia
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Romanian Commodities Exchange
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kideco Jaya Agung - Indonesia
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- Antam Resourcindo - Indonesia
- Central Java Power - Indonesia
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Tata Chemicals Ltd - India
- Petron Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Independent Power Producers Association of India
- Leighton Contractors Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Borneo Indobara - Indonesia
- Indian Energy Exchange, India
- Grasim Industreis Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Chettinad Cement Corporation Ltd - India
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