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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, 13 January 16
SHIPPING MARKET INSIGHT - GEORGE ILIOPOULOS
Going through the second week of 2016 we could easily argue that at this point there are no visible signs of an imminent recovery in the Dry Bulk m ...
Wednesday, 13 January 16
IRON ORE IMPASSE - A FAILED CLAIM FOR CONVERSION - CLYDE & CO
KNOWLEDGE TO ELEVATE
In the recent case of the “Bao Yue”, the English High Court found that the bill of lading holder was liable t ...
Tuesday, 12 January 16
5700 GAR COAL FOR DELIVERY WITHIN Q1 FELL 0.91% WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin moved South direction week over week to averaging $39.96 per ton on last Friday, acc ...
Monday, 11 January 16
PORT OF NEWCASTLE SHIPPED 20% MORE COAL IN DECEMBER 2015; AVERAGE SELLING PRICE DECLINE 3.43%
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $1.129 billio ...
Sunday, 10 January 16
LNG BUNKERING IN ASIA: FUELING A PROMISING FUTURE? - REED SMITH
The requirement of a mandatory reduction of sulphur content in bunker fuel proposed by the International Maritime Organisation (IMO) poses a challe ...
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Showing 2611 to 2615 news of total 6871 |
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- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- Orica Mining Services - Indonesia
- Vedanta Resources Plc - India
- The University of Queensland
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Baiduri Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Orica Australia Pty. Ltd.
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Malabar Cements Ltd - India
- White Energy Company Limited
- Planning Commission, India
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- Xindia Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Pendopo Energi Batubara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- Thai Mozambique Logistica
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Sakthi Sugars Limited - India
- Australian Coal Association
- The State Trading Corporation of India Ltd
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- SMC Global Power, Philippines
- Toyota Tsusho Corporation, Japan
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Minerals Council of Australia
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- Intertek Mineral Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
- San Jose City I Power Corp, Philippines
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- Baramulti Group, Indonesia
- Bangladesh Power Developement Board
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- Therma Luzon, Inc, Philippines
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Trasteel International SA, Italy
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
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