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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, 03 December 15
PANAMAX BUSINESS REMAINED UNDER PRESSURE LAST WEEK
COALspot.com: Following the new record lows the Dry Bulk market witnessed the week prior, the BDI took a much needed breath during the past days.
...
Wednesday, 02 December 15
Q3' 16 FOB RICHARDS BAY COAL SWAP SLIGHTLY UP FOR THE THIRD STRAIGHT WEEK
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q1’ 2016 up month over month and fell week over week.
The Q1’ 2016 &nbs ...
Wednesday, 02 December 15
MARKET INSIGHT - VASSILIS LOGOTHETIS
Boom and bust cycles in commodity prices are not something rare, yet they have important implications both for the world economy in general and for ...
Tuesday, 01 December 15
FOB NEWCASTLE COAL SWAP UP THIS PAST WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery slid $3.75 per ton (9.26%) month over month to US$ 36.75 per ton. The swap ...
Tuesday, 01 December 15
TANKERS VERSUS BULKERS - JUST PLAYING CATCH UP? - CLARKSONS
It’s now more than a year since the tanker market took off. In mid-2014 tanker earnings picked up and since then have been in the $30-$40,000 ...
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- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Price Waterhouse Coopers - Russia
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- SN Aboitiz Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Goldman Sachs - Singapore
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Singapore Mercantile Exchange
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
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- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
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- Renaissance Capital - South Africa
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- AsiaOL BioFuels Corp., Philippines
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- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
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- Straits Asia Resources Limited - Singapore
- CIMB Investment Bank - Malaysia
- LBH Netherlands Bv - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
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- Alfred C Toepfer International GmbH - Germany
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- Maharashtra Electricity Regulatory Commission - India
- MS Steel International - UAE
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- Eastern Energy - Thailand
- Neyveli Lignite Corporation Ltd, - India
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- Australian Commodity Traders Exchange
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
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- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- Medco Energi Mining Internasional
- Mintek Dendrill Indonesia
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- Mjunction Services Limited - India
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- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- Edison Trading Spa - Italy
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- Trasteel International SA, Italy
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- Australian Coal Association
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- Bukit Asam (Persero) Tbk - Indonesia
- The University of Queensland
- Larsen & Toubro Limited - India
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- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
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- Eastern Coal Council - USA
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- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Minerals Council of Australia
- Romanian Commodities Exchange
- Jindal Steel & Power Ltd - India
- Simpson Spence & Young - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- White Energy Company Limited
- OPG Power Generation Pvt Ltd - India
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- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- Ministry of Finance - Indonesia
- Maheswari Brothers Coal Limited - India
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
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- ICICI Bank Limited - India
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- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
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- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
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- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Vizag Seaport Private Limited - India
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
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- Bhatia International Limited - India
- Grasim Industreis Ltd - India
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- Posco Energy - South Korea
- Gujarat Electricity Regulatory Commission - India
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