We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Monday, 29 February 16
LOSS OF EARNINGS IN THE WAKE OF A COLLISION - GARD
 KNOWLEDGE TO ELEVATE
A shipowner’s loss of earnings can form a significant part of a collision claim. Awareness of the ways of calculating loss of earnings claims can be useful in both presenting and challenging this type of claim. This Gard Insight looks at some general principles and methods applied by the courts.
A recent Gard example
A product tanker was hit by a bulker while at berth. Although the extent of the physical repairs – and therefore the repair costs – were relatively limited, the damaged tanks required stainless steel plates which had to be specially ordered. Long lead times led to a significant loss of earnings. As owners were able to document this loss with care and precision, leaving little room for doubt, the case against the owners of the bulker was settled quickly and amicably.
Basic principles
A claimant not only has the burden of proving that it has lost earnings as a result of the collision but also that it has suffered an actual loss. The fact that a ship has been unable to trade due to repairs being carried out is generally not enough, though it raises an obvious presumption that the shipowner has indeed suffered some sort of loss.
In the majority of jurisdictions, the principle of restitutio in integrum governs the measure of damages. This means that a shipowner who suffers a loss of earnings due to the negligence of another party will be put back into the position it would have been but for the negligence. Therefore, the shipowner must prove what the ship would have earned had the collision not occurred. This means that if the repairs are performed during a pre-arranged dry-docking period for example – there will be no loss.
The methods used to prove the loss depend on the facts of each case and one approach is not necessarily better than another. The optimal way is largely dependent on the trade patterns of the ship at the relevant time.
Ships on time charter
If a ship is damaged in a collision it will usually go off-hire until it has been repaired and able to function again under the terms of the charterparty. The shipowner can rely on specific off-hire statements and invoices from charterers. The loss will consist of:
- a fixed amount per day for the total time the ship is off-hire
- the bunkers consumed during the off-hire period, and
- any additional charges the time charterer may have incurred.
If the time charter has been justifiably cancelled as a result of the unavailability of the ship, the loss of earnings from that point onwards will be the difference between what the ship would have earned under the cancelled charter and what was actually earned during the same period.
Ships trading on the spot market
For a ship trading on the spot market, the approach is more flexible to calculate its loss of earnings. The starting point will be the total number of days the ship is unable to trade due to repairs, including removal time to the shipyard. However, losses may extend beyond the actual repair period, especially when the market has fallen in the meantime. If a shipowner can prove that it lost an actual fixture on the spot market due to a collision and necessary repairs, the potential net income from that fixture will be compared with the ship’s actual net income until the date the lost fixture would have ended. This is known in some jurisdictions as the time equalisation method, most recently approved in the English case of THE ASTIPALAIA [2014] EWHC 120.
For situations where a ship trading on the spot market is not fixed for her next voyage, the way to calculate the loss will depend on whether the ship was operating in an established or specialist trade.
For established trades such as the VLCC trade, fixture data is readily available throughout the year. It is a relatively simple exercise for a broker to work out what a VLCC would have earned at the relevant World Scale rates for a given period. Provided the ship would have obtained employment with a reasonable degree of certainty, the estimated charter earnings will be compared with the ship’s actual earnings for the period using the time equalisation method.
For specialised trades and trading patterns with little continuity, market data will be less readily available and reliable, so the loss of earnings calculation in each case will be more fact specific. In these cases, the best approach may be to present the average time charter equivalent earnings of the ship for a limited period around the time of collision, e.g. the casualty voyage and the voyages preceding and following the casualty. For some trades, it may be relevant to present income statements for even longer periods, however, the more remote the evidence, the more difficult it will be to prove that the figures are a true representation of the loss.
In the Norwegian collision case of Rana Frakt v ROBAS (LG-2013-173128) one party based its loss of earnings on two annual audited income statements, however the Court of Appeal made a discretionary reduction of about 33 per cent due to the lack of evidence relating to tangible fixtures the ship would have been engaged in during the period of repairs. That said, the mere fact that the loss of earnings cannot be quantified exactly will not be fatal to a claim.
FFO claims
Loss of earnings claims can arise in other contexts, e.g. where a ship damages a quay or shore based crane and renders part of a terminal unusable. The underlying assumptions and calculations involved can be complex and the appointment of a forensic accountant with knowledge of the local accountancy rules and tax law may very well be necessary in order to properly defend a shipowner’s position.
Checklist
Whether claiming or challenging loss of earnings claims, the following should be submitted:
Evidence of the total period claimed for, such as:
– Master’s statement of facts
– copies of the deck log
– the off-hire statements from charterers.
A summary of the daily net loss of earnings for the total period and the underlying documentation relied upon, such as:
– the charterparty and recap
– the off-hire invoice
– a statement from a broker of potential earnings or income statements where a time charter equivalent rate per day is arrived at.
Evidence of any mitigation, e.g. that the claimant:
– has chosen the quickest and most reasonable repair option, or
– has used other ships in its fleet to perform the contractual obligations of the damaged ship.
Evidence of the average utilisation of the ship. For ships actively trading only 80 per cent of the time, it is clearly unreasonable to claim a loss equating to 100 per cent utilisation during the period of repairs.
Final note
It is well worth spending time and effort in presenting loss of earnings claims in a clear and unambiguous manner, so that both parties understand the figures presented and the assumptions behind them. This can help achieve a quick settlement in a collision dispute.
Source: GARD
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Friday, 15 January 16
FOB INDONESIA COAL SWAPS FIRM SLIGHTLY LAST WEEK
COALspot.com: Indonesian coal swap delivery Q1 2016 declined month over month and week over week.
According to AsiaClear OTC coal swap's r ...
Friday, 15 January 16
SHIPPING: 2016 STARTED WITH MISERY ACROSS THE BOARD FOR SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As one would have expected, the dry bulk market starter the new year where it left off in 2015, plunging to never seen before depths, as the market ...
Friday, 15 January 16
U.S. WEEKLY COAL PRODUCTION ROSE ACROSS ALL BASINS: EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 13.4 million shor ...
Thursday, 14 January 16
FOB RICHARDS BAY COAL SWAP FOR Q3 DELIVERY CLOSED $5.90 LOWER THAN Q1 PRICE
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap up month over month and week over week.
The Q1’ 2016 FOB Richards Bay Coal ...
Wednesday, 13 January 16
U.S. COAL PRODUCTION DECLINED BY 109 MMST IN 2015; COAL EXPORTS DECREASED 21% Y-O-Y
COALspot.com: U.S. coal production declined by 109 million short tons (MMst) (11%) in 2015, the largest decline ever recorded, says EIA.
The 2 ...
|
|
|
Showing 2606 to 2610 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Parliament of New Zealand
- Central Java Power - Indonesia
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- PetroVietnam Power Coal Import and Supply Company
- India Bulls Power Limited - India
- Posco Energy - South Korea
- Vizag Seaport Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Australian Coal Association
- Planning Commission, India
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Star Paper Mills Limited - India
- Alfred C Toepfer International GmbH - Germany
- Commonwealth Bank - Australia
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Semirara Mining and Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Deloitte Consulting - India
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- Wilmar Investment Holdings
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- Gujarat Sidhee Cement - India
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Aditya Birla Group - India
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- Indika Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Leighton Contractors Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Baramulti Group, Indonesia
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
|
| |
| |
|
