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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, 07 January 16
FOB NEWCASTLE COAL SWAPS DELIVERY Q1'16 REMAIN FLAT W-O-W; UP M-O-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery rose another $1.23 per ton (3.35%) this past week compared to the sam ...
Thursday, 07 January 16
SHIPPING WILL REMAIN VOLATILE AND INDISPENSABLE IN 2016 - MOORE STEPHENS
The ultimate definition of an optimist has been characterised as an accordion player with an answerphone. Such extreme optimism might be difficult ...
Wednesday, 06 January 16
NEW COAL PRICE PASS-THROUGH REGULATION BENEFITS CHINA IPPS - FITCH RATINGS
Fitch Ratings says the new Coal Price Pass-through Mechanism announced by the National Development and Reform Commission (NDRC) on 31 December ...
Tuesday, 05 January 16
BIG COAL MINERS PLAN HIGHER PRODUCTION THIS YEAR - THE JAKARTA POST
The country’s major coal miners plan to further boost production in 2016 although analysts estimate that an oversupply in the world’s c ...
Tuesday, 05 January 16
THE SHIPPING MARKET IN 2015 AND LOOKING FORWARD - BIMCO
Global economy: menacing clouds in the sky cast a shadow on global economic developments 2015 never really took off, even though the global economi ...
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Showing 2621 to 2625 news of total 6871 |
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- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Development Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Parliament of New Zealand
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Economic Council, Georgia
- Indian Energy Exchange, India
- Central Electricity Authority - India
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- VISA Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Simpson Spence & Young - Indonesia
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GMR Energy Limited - India
- Electricity Authority, New Zealand
- PTC India Limited - India
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- OPG Power Generation Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- White Energy Company Limited
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Planning Commission, India
- Mintek Dendrill Indonesia
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Vijayanagar Sugar Pvt Ltd - India
- Marubeni Corporation - India
- Mjunction Services Limited - India
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Miang Besar Coal Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- Orica Australia Pty. Ltd.
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Australian Coal Association
- Posco Energy - South Korea
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- IEA Clean Coal Centre - UK
- Directorate General of MIneral and Coal - Indonesia
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- Krishnapatnam Port Company Ltd. - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Renaissance Capital - South Africa
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Indogreen Group - Indonesia
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Cement Manufacturers Association - India
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- Siam City Cement PLC, Thailand
- London Commodity Brokers - England
- Sical Logistics Limited - India
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Sree Jayajothi Cements Limited - India
- Central Java Power - Indonesia
- Antam Resourcindo - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- ASAPP Information Group - India
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
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