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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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Tuesday, 08 December 15
Q1' 16 API 5 FOB NEWCASTLE COAL SWAP CLOSED AT $ 36.73 A TON; 1.73% HIGHER COMPARED TO Q3' 16 PRICE
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery slid $1.47 per ton (3.85%) month over month to US$ 36.73 per ton. The swap ...
Monday, 07 December 15
5000 GAR CS (I) COAL INDEX REMAIN THE SAME OVER LAST WEEK
COALspot.com: The 5000 GAR CS (i) coal index remain the same over last week.
According to the CS (i) coal (system generated) index, the CS 50 ...
Monday, 07 December 15
COAL DEMAND IN 2016 FAILS TO SUPPORT PRICES; CFR SOUTH CHINA COAL SWAPS SEEN AT $US 42 A TON
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 1.70 (3.88%) per ton month over month.
A commodity swap ...
Sunday, 06 December 15
THE BDI DECLINED BY 3.09 PERCENT TO 563 POINTS ON 4 DECEMBER
COALspot.com: The BDI declined by 3.09 percent to 563 points on 4 December 2015.
The Cape index was also declined by 10.01 percent to 890 poin ...
Sunday, 06 December 15
DRY BULK MARKET ON REVERSE MODE, SET TO BREAK NEW ALL-TIME LOWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been the negative “star” of the shipping industry for quite some time. In fact if it wasn’t for the boomi ...
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- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Marubeni Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- Globalindo Alam Lestari - Indonesia
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- PNOC Exploration Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Indika Energy - Indonesia
- VISA Power Limited - India
- Electricity Generating Authority of Thailand
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Oldendorff Carriers - Singapore
- The University of Queensland
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Dalmia Cement Bharat India
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Agrawal Coal Company - India
- The Treasury - Australian Government
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Makarim & Taira - Indonesia
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Kohat Cement Company Ltd. - Pakistan
- Interocean Group of Companies - India
- ICICI Bank Limited - India
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- Central Java Power - Indonesia
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- Eastern Energy - Thailand
- Goldman Sachs - Singapore
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Mjunction Services Limited - India
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Planning Commission, India
- Cement Manufacturers Association - India
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Leighton Contractors Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Vedanta Resources Plc - India
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Holcim Trading Pte Ltd - Singapore
- Bhushan Steel Limited - India
- Chamber of Mines of South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
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