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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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Thursday, 28 January 16
WHAT ARE THE PROSPECTS FOR COAL IN LIGHT OF THE PARIS CLIMATE AGREEMENT? - GERMAN COAL IMPORTERS ASSOCIATION
This depends – says the VDKi – to a very great extent on who you want to believe more, the United Nations or the International Energy A ...
Thursday, 28 January 16
RICHARDS BAY COAL SWAPS FOR Q1,Q2 AND Q3 DELIVERIES FIRM THIS PAST WEEK
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap rose month over month and week over week.
The Q1’ 2016 FOB Richards Bay Coa ...
Wednesday, 27 January 16
API 5 FOB NEWCASTLE COAL SWAPS CLOSE MIXED
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery rose another $1.17 per ton (3.13%) this past week compared to the sam ...
Wednesday, 27 January 16
CHINA'S STALLING ECONOMY HAS HAD A GREAT EFFECT ON VARIOUS COMMODITIES; DECREASED DEMAND DRIVING COMMODITY PRICES LOWER AND LOWER - LINOS ALEXANDROS KOGEVINAS
Having gone through the first few weeks of 2016, it’s starting to look like another challenging year is ahead of us. Hopes for a recovery in ...
Wednesday, 27 January 16
WORLD HARD COAL PRODUCTION AND CONSUMPTION DECLINE IN 2015 FOR THE FIRST TIME IN OVER A DECADE - VDKI
COALspot.com: Seaborne hard coal trade and the changes in this area were decisively affected by China and India - VDKi.
China bears the g ...
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Showing 2586 to 2590 news of total 6871 |
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- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- Dalmia Cement Bharat India
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- Jindal Steel & Power Ltd - India
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Gujarat Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Independent Power Producers Association of India
- Central Electricity Authority - India
- Indian Oil Corporation Limited
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- McConnell Dowell - Australia
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Coastal Gujarat Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- Globalindo Alam Lestari - Indonesia
- Attock Cement Pakistan Limited
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Lanco Infratech Ltd - India
- Meenaskhi Energy Private Limited - India
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Oldendorff Carriers - Singapore
- IHS Mccloskey Coal Group - USA
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- Economic Council, Georgia
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Posco Energy - South Korea
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- Bahari Cakrawala Sebuku - Indonesia
- Mintek Dendrill Indonesia
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Parliament of New Zealand
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Indika Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Jaiprakash Power Ventures ltd
- Australian Coal Association
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- Star Paper Mills Limited - India
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- Orica Australia Pty. Ltd.
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Ministry of Mines - Canada
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
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