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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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Tuesday, 05 January 16
4200 GAR COAL INDEX FALL TOWARD $27;SLIPPED 28.05% YEAR-TO-DATE
COALspot.com: Average 5000 GAR coal index has not moved in the past week, averaging $40.12 per ton on last Thursday, according to CS (i) Coal Index ...
Monday, 04 January 16
CFR SOUTH CHINA COAL SWAP REMAIN FLAT OVER CHRISTMAS & NEW YEAR HOLIDAYS
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery rose US$ 0.68 (1.64%) per ton month over month.
A commodity swap is ...
Friday, 01 January 16
FOB INDONESIA COAL SWAP FOR Q1'16 DELIVERY CLOSED AT $36.75 PER TON
COALspot.com: Indonesian coal swap delivery Q1 2016 declined month on month but flat week over week.
According to AsiaClear OTC coal swap' ...
Thursday, 31 December 15
COAL PRICES FELL ON WEAK DEMAND
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap decline month over month and slightly up week over week.
The Q1’ 2016 ...
Thursday, 31 December 15
2016 FOB NEWCASTLE COAL SWAP RALLY TO CLOSE AT $37.98/TON
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery rose another $1.48 per ton (4.05%) this past week compared to the sam ...
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Showing 2626 to 2630 news of total 6871 |
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- Dalmia Cement Bharat India
- Australian Commodity Traders Exchange
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- McConnell Dowell - Australia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Thai Mozambique Logistica
- Coalindo Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- Wood Mackenzie - Singapore
- Sarangani Energy Corporation, Philippines
- Indika Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Rio Tinto Coal - Australia
- Eastern Coal Council - USA
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Bahari Cakrawala Sebuku - Indonesia
- Iligan Light & Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Indo Tambangraya Megah - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- International Coal Ventures Pvt Ltd - India
- Bhatia International Limited - India
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- GAC Shipping (India) Pvt Ltd
- Orica Mining Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- Global Business Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Thiess Contractors Indonesia
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Kumho Petrochemical, South Korea
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- London Commodity Brokers - England
- Gujarat Sidhee Cement - India
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- The University of Queensland
- Agrawal Coal Company - India
- Sical Logistics Limited - India
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- OPG Power Generation Pvt Ltd - India
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- VISA Power Limited - India
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Simpson Spence & Young - Indonesia
- Formosa Plastics Group - Taiwan
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Intertek Mineral Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Kepco SPC Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- PTC India Limited - India
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- Interocean Group of Companies - India
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