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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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Friday, 19 February 16
INDONESIAN HBA HITS A NEW LOWS BELOW $51 A TON AS OVERSUPPLY, LOW DEMAND WOES PERSIST
COALspot.com: Low coal demand and excess supplies sent Indonesian benchmark coal price further deep in February 2016. HBA has slumped second time t ...
Friday, 19 February 16
U.S. WEEKLY COAL PRODUCTION ROSE 2.6% FROM LAST WEEK - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 13.2 million shor ...
Thursday, 18 February 16
INDIA NEEDS INTERNATIONAL SUPPORT ON HIGH EFFICIENCY COAL - WORLD COAL ASSOCIATION
Speaking at a conference in New Delhi today, World Coal Association Chief Executive Benjamin Sporton said the critical role of coal in driving econ ...
Thursday, 18 February 16
CHINA COAL SECTOR - 2015 RESULTS BLEAK, 2016 UNLIKELY TO BE ANY BETTER - FITCH
COALspot.com: China Coal Sector’s Financial Woes to Worsen in 2016.
Fitch Ratings says that the 2015 full-year result previews issued by ...
Thursday, 18 February 16
PANAMAX RATES OUT OF ECSA WERE STILL GAINING A PREMIUM OVER THE REST OF THE MARKET - INTERMODAL
The BDI moved further down last week, fact that hardly took anyone by surprise as the lunar year holidays in Asia on top of the already depre ...
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Showing 2556 to 2560 news of total 6871 |
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- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parliament of New Zealand
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Tata Chemicals Ltd - India
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- The University of Queensland
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- Bangladesh Power Developement Board
- Marubeni Corporation - India
- Economic Council, Georgia
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- Electricity Authority, New Zealand
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Sakthi Sugars Limited - India
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Thiess Contractors Indonesia
- Holcim Trading Pte Ltd - Singapore
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- GVK Power & Infra Limited - India
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Antam Resourcindo - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- PowerSource Philippines DevCo
- Manunggal Multi Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Meenaskhi Energy Private Limited - India
- Anglo American - United Kingdom
- Sical Logistics Limited - India
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- CIMB Investment Bank - Malaysia
- SN Aboitiz Power Inc, Philippines
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- SMC Global Power, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Mercator Lines Limited - India
- Wilmar Investment Holdings
- McConnell Dowell - Australia
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
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