We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
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
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Wednesday, 25 November 15
BIG CHINESE COPPER PROCESSORS DEFEND MARGINS THROUGH R&D, SAYS FITCH
Large Chinese copper processors are focusing on higher value-added products and investing in R&D to enhance their technical know-how to maintai ...
Wednesday, 25 November 15
BIMCO LAUNCHES ANTI-CORRUPTION CLAUSE FOR SHIPPING CONTRACTS WORLDWIDE
COALspot.com: BIMCO, is the world’s largest international shipping association, with 2,200 members in around 130 countries, has now launched ...
Wednesday, 25 November 15
TANKER MARKET INSIGHT - GEORGE VASTARDIS
We have already noticed obvious signs of activity mainly West of Suez, which are currently driving the clean MR market to higher levels. Over the p ...
Tuesday, 24 November 15
COAL SUPPLY PRESSURE PUTS INDONESIAN HBA IN FREE FALL
The coal industry is slowly recognizing that, the current coal price level is not a decrease in price, but a change in pricing to corresp ...
Tuesday, 24 November 15
COAL PRICES SET TO REMAIN UNDER PRESSURE UNTIL 2016 DUE TO OVER SUPPLY GLUT; H1 '16 COAL SWAPS DOWN 13% M-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery slid $5 per ton (12.05%) month over month to US$ 36.50 per ton. The s ...
|
|
|
Showing 2691 to 2695 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Power Finance Corporation Ltd., India
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Commodity Traders Exchange
- Metalloyd Limited - United Kingdom
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Gujarat Sidhee Cement - India
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Anglo American - United Kingdom
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Miang Besar Coal Terminal - Indonesia
- Indian Oil Corporation Limited
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Banpu Public Company Limited - Thailand
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Mjunction Services Limited - India
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Semirara Mining Corp, Philippines
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Rashtriya Ispat Nigam Limited - India
- MS Steel International - UAE
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- White Energy Company Limited
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
- Latin American Coal - Colombia
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- Independent Power Producers Association of India
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- San Jose City I Power Corp, Philippines
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- VISA Power Limited - India
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- Indonesian Coal Mining Association
- Medco Energi Mining Internasional
- Krishnapatnam Port Company Ltd. - India
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Deloitte Consulting - India
- Larsen & Toubro Limited - India
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Trasteel International SA, Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Economic Council, Georgia
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Indika Energy - Indonesia
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Ambuja Cements Ltd - India
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Carbofer General Trading SA - India
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
|
| |
| |
|
