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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, 25 December 15
WEEKLY US COAL PRODUCTION ESTIMATES DIP 8.5%
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 14.7 million shor ...
Thursday, 24 December 15
Q3' 16 FOB RICHARDS BAY COAL SWAP SHED US$ 0.60 PER TON OVER WEEK, AND STANDS AT US$ 43.25 PER TON
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap decline month over month and slightly up week over week.
The Q1’ 2016 FOB R ...
Thursday, 24 December 15
GLOBAL MARINE FUEL REGULATIONS COULD SHOCK REFINING AND OIL MARKETS - OPEC | HELLENIC SHIPPING NEWS
IMO regulations call for global standards for sulphur content in marine fuel to be tightened to 0.5% from its present 3.5%. There is uncertainty ov ...
Thursday, 24 December 15
DRY BULKERS' VALUES ARE PLUNGING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Dry bulk carriers’ values are falling across the board, as the fall of freight rates is taking its toll, as is to be expected. In fact, accor ...
Wednesday, 23 December 15
SHIPPING MARKET INSIGHT - PANOS MAKRINOS
As we are heading towards the end of the year we could argue that most of those involved in the shipping industry share mixed feelings for 2015. Th ...
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Showing 2636 to 2640 news of total 6871 |
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- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Attock Cement Pakistan Limited
- Kartika Selabumi Mining - Indonesia
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Directorate General of MIneral and Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- GN Power Mariveles Coal Plant, Philippines
- SMC Global Power, Philippines
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- SMG Consultants - Indonesia
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- CNBM International Corporation - China
- Bukit Asam (Persero) Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kumho Petrochemical, South Korea
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Minerals Council of Australia
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- ASAPP Information Group - India
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- Eastern Energy - Thailand
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Parliament of New Zealand
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- Binh Thuan Hamico - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Romanian Commodities Exchange
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- Ministry of Mines - Canada
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Independent Power Producers Association of India
- India Bulls Power Limited - India
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