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Monday, 04 April 16
THE LOADING, AND SUBSEQUENT DISCHARGE, OF UNSAFE NICKEL ORE - ALL TIME TO 'COUNT' - THE STANDARD CLUB
 KNOWLEDGE TO ELEVATE
In a recent, published, London arbitration award the English tribunal has held that all time lost as a result of loading, and then discharging, a confiscated (unsafe) cargo will be for the charterer’s account.
Background facts
Under a contract of affreightment (CoA), the owner was required to carry eight shipments of nickel ore. The ship promptly arrived at the nominated load, with loading commencing the very next day. Loading stopped two weeks later, however, and the local navy issued a confiscation order, resulting in the ship being compounded in a nearby naval base. The confiscation order was issued due to the cargo being mined outside the parameters of the locally granted permits. Only three months later was the ship released to discharge the cargo already on board the ship, which took two more months to complete.
When the ship was released the charterer emailed the owner requiring it to organise the remaining discharge operation. In addition, the charterer advised that it would not provide any cargo for the next shipment. In response, the owner advised the charterer that it had wrongfully repudiated the CoA and claimed, through London arbitration, demurrage for the entire duration of delay.
The Tribunal’s decision
The arbitration tribunal would only consider the claim for demurrage, not the claim for possible wrongful termination.
The charterer’s primary defense to the demurrage claim was based upon the following CoA clause (our emphasis):
‘In case any acts of God, riots, civil commotions, fire or any other causes comprehend in the Force Majeure terms which may delay or prevent to provide the cargo at the port of loading and load/discharge of the cargo, such time lost is not to count as laytime as neither Charterers nor Shipper nor Suppliers nor Receivers shall be liable for any loss of demurrage, unless vessel already on demurrage. Once on demurrage always on demurrage.’
The tribunal found that the above clause did not aid the charterer in its defence. It was held that the confiscation of the ship by the local navy did not fall within the boundaries of ‘any acts of God, riots, civil commotions, fire or any other causes comprehend in force majeure terms’.
Also, the tribunal found that because the subject cargo had been illegally mined, the charterer had failed to meet its primary contractual obligation under the CoA to provide a safe cargo, which could not be ‘excused’ by other contractual defences.
Finally, as the intervention by the navy was after the ship fell on demurrage, it was found that as per the above wording, ‘once on demurrage always on demurrage’, the charterer remained liable for the entire period of detention and delay.
On the other hand, the tribunal refused to accept that the charterer should not be allowed load time. This was on the basis that cargo had been partially loaded. The charterer was therefore allowed laytime, on a pro rata basis, irrespective of it being considered an unsafe cargo.
Concluding remarks
Following the above decision, members acting in a charterer’s capacity should take all precautions to ensure that the cargo to be loaded on board a ship is safe, legal and that all applicable documentation is in order to best prevent similar situations from arising in the future. It should also be noted that if the subject charter includes the phrase ‘once on demurrage, always on demurrage’ the charterer will remain liable for all time used until the load or discharge operation is completed. Charterer members should, therefore, be proactive and continue to use their best efforts to minimize any time lost.
This article intends to provide general guidance on the issues arising as a matter of English law. It is not intended to provide legal advice in relation to any specific query. Members requiring further information on this topic should direct their enquiries to either their usual contact at the club, or to the authors of this article.
Defence cover is, by its very nature, discretionary in that the club must be satisfied as to the merits and quantum of the claim in question and the likelihood of achieving a successful outcome, if it is to lend support.
Source: The Standard Club
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Thursday, 07 April 16
PANAMAX RATES ARE FIRMING IN BOTH HEMISHEPHERES - FEARNLEYS
Capesize
With a great volume our of west Australia, rates were finally moving to upper 3's. and stabilizing towards the middle of the week in ...
Thursday, 07 April 16
BIMCO AND GIIGNL PUBLISH A GROUNDBREAKING VOYAGE CHARTER PARTY FOR LNG TRADE
BIMCO and the International Group of Liquefied Natural Gas Importers (GIIGNL) have today jointly issued the first definitive voyage charter party & ...
Wednesday, 06 April 16
HOW LONG SHIPPING CRISIS WILL BE; WHEN SHOULD OWNERS EXPECT THE BULK CARRIERS TO BECOME PROFITABLE? - INTERMODAL
It is the consensus that dry bulk shipping has been in a crisis for quite some time now. Bulk carrier values are at historical low levels, therefor ...
Tuesday, 05 April 16
DRY BULK REVISITS 1980S LOWS AND FACES UNCERTAIN LONGER TERM OUTLOOK - MSI | HELLENIC SHIPPING NEWS
With the market near bottom, attention is turning to the length of the downturn, the effect on asset values and the impact of broader demand side c ...
Monday, 04 April 16
INDONESIA CS57 COAL INDEX SLIDES SLIGHTLY WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin fell 0.07 percent week over week to averaging $38.88 per ton on this past Friday, ac ...
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- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- The University of Queensland
- Wilmar Investment Holdings
- PNOC Exploration Corporation - Philippines
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- Tamil Nadu electricity Board
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- Orica Mining Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- Global Green Power PLC Corporation, Philippines
- PTC India Limited - India
- Thai Mozambique Logistica
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- Sical Logistics Limited - India
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- Australian Coal Association
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Global Business Power Corporation, Philippines
- Bharathi Cement Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Singapore Mercantile Exchange
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Mjunction Services Limited - India
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Manunggal Multi Energi - Indonesia
- PowerSource Philippines DevCo
- Coal and Oil Company - UAE
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- ASAPP Information Group - India
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Deloitte Consulting - India
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- GVK Power & Infra Limited - India
- Riau Bara Harum - Indonesia
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- MS Steel International - UAE
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Simpson Spence & Young - Indonesia
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- India Bulls Power Limited - India
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Aboitiz Power Corporation - Philippines
- Minerals Council of Australia
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Central Java Power - Indonesia
- Aditya Birla Group - India
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