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Monday, 25 January 16
SHOULD A DEFAULTING PARTY BE ENTITLED TO AN INNOCENT PARTY'S SAVING, FOLLOWING THEIR BREACH OF CONTRACT? - THE NEW FLAMENCO REVISITED
 KNOWLEDGE TO ELEVATE
This case was addressed by the club in our of January 2015, when the High Court decision became available. The background facts to the case are set out in detail in our earlier article, but to summarise briefly, the New Flamenco was time chartered to the charterer from February 2004 to November 2009. In breach of the charterparty terms, the charterer redelivered the ship two years early, in October 2007. Since there was no available charter market for a substitute fixture, the owner took the commercial decision to sell the ship in 2007. The owner subsequently commenced arbitration proceedings, claiming for the net loss of profit that they would have earned during the remaining two years of the charter. Later it became apparent, however, that due to the global financial crisis in late 2008 there was a significant difference in the value of the ship between late 2007 and late 2009 and the owner may well have benefitted from the early redelivery. Indeed, the sale price achieved by the owner was some $16.8m more than the value of the ship in November 2009. The owner’s claim for damages amounted to €7.6m, so if this benefit were to be taken into account then the owner’s claim would disappear in its entirety.
The London tribunal found that the sale was directly caused by the charterer’s early redelivery and, seeing no reason why capital savings should not be taken into account in considering the owner’s losses, the tribunal held that the charterer was entitled to the benefit. Whilst perhaps viewed as unfair by some, it should be remembered that it is normal practice when there is a breach of charter (voyage or time) for the court to take into account any income made on a mitigation voyage, and deduct this from the claim under the (wrongfully terminated) charter. So, why treat capital savings differently from savings in income?
Nevertheless, the High Court (on appeal from the tribunal) reversed this decision. The High Court held on the one hand that there was no need to treat savings in income differently from capital savings; however, on the other, the High Court held that there was no direct causal link between, here, the breach of time charter and the benefits obtained in the commercial sale of the ship. Instead, the High Court held that whilst the early redelivery may have ‘triggered’ the owner’s sale, the capital savings obtained by the owner arose from its own commercial decision to sell the ship. The charterer appealed this decision to the English Court of Appeal.
Court of Appeal decision
The Court of Appeal has, in its recent decision, unanimously overturned the High Court decision. In so doing, the owner’s claim for damages has failed in its entirety. In giving judgment, the Court of Appeal referred to the leading authority on mitigation British Westinghouse[2], confirming the important principle that where a measure taken by a claimant, in mitigation of loss and arising out of the consequences of a defendant’s breach in the ordinary course of business, results in a benefit to the claimant, that benefit is normally to be brought into account in assessing the claimant’s loss unless the measure is wholly independent of the relationship of the claimant and defendant.
Importantly, the Court of Appeal found that there was no available market for this ship upon its early redelivery and, in these circumstances, it was not easy to see why the benefit (if any) an owner obtained from selling the ship in question should not be brought into the calculation of permitted damages, especially when the benefit obtained from fixing the same ship on the spot market would have been taken into account. The absence of the available market was important as, if there had been an available market to re-fix the ship, then the owner’s decision in this case to instead sell the ship could arguably be said to have been independent of the contractual relationship between the parties and, therefore, should not be taken into account.
Conclusion
The overriding principle under English law, governing damages for breach of contract, is the compensatory principle i.e. the law attempts to put the injured party back in the position they would have been in had the contract been properly performed. Therefore, the usual measure of damages available to an owner when a charterer walks away from a contract is the amount of freight or hire which would have been earned, less running expenses, (the profit) less what the ship actually earned during that same period (the voyage(s) made in mitigation). The New Flamenco is not deviating from the compensatory principle. Indeed in this case the owner was compensated for his actual losses following the contract breach, which just happened to be none on this occasion.
However, each case will, as ever, turn on its particular facts which always need to be carefully considered. In the New Flamenco the important factor was the absence of an available market to re-charter the ship when it was redelivered to the owner early.
Source: The Standard Club
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Wednesday, 24 February 16
HOW IS THE FUEL MIX FOR U.S. ELECTRICITY GENERATION CHANGING? - EIA
In recent years, there have been changes in the mix of fuels used to generate electricity in the United States. Natural gas and renewable energy so ...
Wednesday, 24 February 16
PRIVATE EQUITY FUNDS LOOKING TO EXIT SHIPPING, MOST NOTABLY DRY BULK, AS OVERORDERING HAS RESULTED IN EXCESS TONNAGE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The injection of more than $13 billion in shipping from various private equity funds over the past few years has resulted in what many feared would ...
Wednesday, 24 February 16
THIRTEEN - NOT ALWAYS AN UNLUCKY NUMBER? - CLARKSONS
Back in early 1999 the price of a 5 year old Panamax bulkcarrier dipped to $13.5m, and ever since analysts have hailed purchase decisions made at t ...
Monday, 22 February 16
4200 GAR COAL INDEX SETTLES AT $27.02, DOWN 0.07% FROM LAST WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.17 percent week over week to averaging $38.89 per ton on this past Friday, ...
Monday, 22 February 16
FREIGHT MARKETS PICKED UP SLIGHTLY THIS PAST WEEK
COALspot.com: The freight markets picked up slightly this past week.
The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measure of gl ...
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Showing 2551 to 2555 news of total 6871 |
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- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Star Paper Mills Limited - India
- Timah Investasi Mineral - Indoneisa
- Aditya Birla Group - India
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- CIMB Investment Bank - Malaysia
- Port Waratah Coal Services - Australia
- Xindia Steels Limited - India
- Australian Coal Association
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Thai Mozambique Logistica
- Rio Tinto Coal - Australia
- Deloitte Consulting - India
- Bangladesh Power Developement Board
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- Altura Mining Limited, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Borneo Indobara - Indonesia
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Marubeni Corporation - India
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Miang Besar Coal Terminal - Indonesia
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Medco Energi Mining Internasional
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- Minerals Council of Australia
- Indian Energy Exchange, India
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CNBM International Corporation - China
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- Ministry of Mines - Canada
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Neyveli Lignite Corporation Ltd, - India
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Dalmia Cement Bharat India
- MS Steel International - UAE
- PNOC Exploration Corporation - Philippines
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Parliament of New Zealand
- GMR Energy Limited - India
- Tata Chemicals Ltd - India
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- Directorate Of Revenue Intelligence - India
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Wood Mackenzie - Singapore
- Siam City Cement - Thailand
- Planning Commission, India
- Therma Luzon, Inc, Philippines
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Heidelberg Cement - Germany
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Goldman Sachs - Singapore
- Economic Council, Georgia
- Globalindo Alam Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ambuja Cements Ltd - India
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