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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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Monday, 16 November 15
KOMIPO INVITES BIDS FOR 1.295 MILLION TONS OF BITUMINOUS COAL FOR Q1 - Q2'16
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 1,295,000 Metric Tons (MT) of minimum 4,600 kc ...
Monday, 16 November 15
SOUTH CHINA COAL SWAPS DECLINE CONTINUES THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 6.05 (12.59%) per ton month over month.
A commodity swa ...
Monday, 16 November 15
CLARKSEA INDEX COMPETITION: IS IT ALL IN THE TIMING? - CLARKSONS
Readers of the Shipping Intelligence Weekly are invited each year to predict the value of the ClarkSea Index one year ahead in the first week of No ...
Monday, 16 November 15
DRY BULK MARKET: Q1' 2016 SHAPING UP TO BE A ' DISASTROUS' ONE OF PROJECTED LOWER IRON ORE IMPORTS FROM CHINA
Over the course of the past year or so, it’s been the drop of coal imports from China, which has had a detrimental effect on the course of dr ...
Friday, 13 November 15
WEAK CHINA POWER DEMAND DAMPENS COAL CONSUMPTION - FITCH
The weak growth in China's electricity consumption in 2015, together with increasing non-thermal power generation capacity are exerting more pr ...
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Showing 2711 to 2715 news of total 6871 |
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- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Salva Resources Pvt Ltd - India
- Sical Logistics Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- Interocean Group of Companies - India
- Posco Energy - South Korea
- Banpu Public Company Limited - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining Corp, Philippines
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- Global Green Power PLC Corporation, Philippines
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Cement Manufacturers Association - India
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Bhushan Steel Limited - India
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- Malabar Cements Ltd - India
- Planning Commission, India
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Timah Investasi Mineral - Indoneisa
- Siam City Cement PLC, Thailand
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- VISA Power Limited - India
- Economic Council, Georgia
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Globalindo Alam Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- IHS Mccloskey Coal Group - USA
- Gujarat Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indogreen Group - Indonesia
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- Kobexindo Tractors - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Australian Coal Association
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Baramulti Group, Indonesia
- Sakthi Sugars Limited - India
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Kohat Cement Company Ltd. - Pakistan
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- Bukit Baiduri Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- PowerSource Philippines DevCo
- AsiaOL BioFuels Corp., Philippines
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Tata Chemicals Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Independent Power Producers Association of India
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
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