We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Friday, 07 July 17
SHOULD WE BE AVOIDING GENERAL AVERAGE? - ALEX KEMP
 KNOWLEDGE TO ELEVATE
Calls for general average to be abolished are nearly as old as the regime itself. A representative of Lloyd’s attended the eponymous Antwerp Conference in 1873 and latterly described general average as a “a nest of fraud and abuses, a lurking place for speculation and waste”. Even in 1913 commentators were complaining about the increasing size of vessels and the volume of bills of lading they created. The Chairman of the US Association of Average Adjusters said of general average that year “the time, trouble, expense and delay are out of all proportion to the benefit achieved”. These comments are surprisingly familiar and it is interesting to see that the same weakness in general average are made today.
Unsurprisingly those involved in transporting or insuring cargo have little love for the regime, when they are usually the paying party. There have been calls in the past for the loss to simply lie where it falls for the respective hull and cargo insurers to absorb. A key piece of research by Mr Matthew Marshall of the Institute of London Underwriters for the IUMI Tokyo conference in 1994 (updated to 1999) really energized the modern debate. His work highlighted the fact that 10% of the cost of general average was adjusters’ fees and another 10% commission (something that has now been abolished in the most recent rules). Perhaps most importantly it was suggested that the majority of general average events were the fault of the ship owner. This helped lead to the ill-fated York-Antwerp Rules 2004 which have now been replaced.
Whilst the York-Antwerp Rules 2004 may now have been replaced with a more moderate regime, the circumstances which give rise to criticism of general average are more relevant than ever. Many commentators have written about the increasing size of container ships, the increasing complexity of their contracts of carriage and the severe impact this has on the cost and time required to adjust such a general average event. This observations were again aired in the negotiations to the York-Antwerp Rules 2016.
For the time being, at least, general average does not seem to be in any grave threat of abolition and the status quo (broadly speaking) will continue. However, that doesn’t mean to say that the market is not evolving and adapting to meet the reality of modern general average. General average absorption clauses have long been a feature of H&M policies as a way to avoid low value general average events. Their limits have increased as vessel size and casualty complexity has increased. We have seen examples of such limits being as much as US$1 million.
However, more recently parties involved in container shipping have taken even more aggressive steps. Vessel sharing agreements and slot charters used in the management of container ships often now contain provisions which compel the parties to “consult” to determine whether they can absorb all the general average sacrifices and losses and to try and persuade the Owners not to declare general average. Often these agreements go further and compel the parties to absorb general average between the parties up to a limit of say US$0.5 million (this should be distinguished from a general average adsorption clause in a H&M policy). This shows a commercial decision in container shipping that general average, in principle, should be avoided as it is not in the interests of shippers, who are the customers of container lines.
It is easy to see why. With adjuster’s fees, through no fault of their own, to collect security often running into the hundreds of thousands of dollars and adjustments taking anything up to a decade, it is an unattractive way to deal with losses arising from a casualty in complex container casualties. As a result we have seen container lines go further than the provisions in their contractual agreements in the aftermath of a casualty and enter into bespoke agreements resolving to fund all general average expenses and sacrifice on certain terms. More often than not this prevents any need to collect general average security or obtain cargo documentation for the entire manifest. This simply leaves the carriers to deal with cargo claims (be them sacrifice or otherwise) in the usual way. One might say that this places a greater financial burden on the carriers who are absorbing cargo’s proportion of general average from their bottom line (such a voluntary liability would not ordinarily be insured by the carrier) as ordinarily, cargo’s proportion of general average would be reimbursed by cargo insurers. This may simply be the effect of what is undoubtedly an extremely competitive market place for container shipping, notwithstanding recent mergers.
Ultimately, whether parties should be considering more aggressive steps to avoid general average following an incident, will depend upon the nature of the casualty, the scale of expenses/sacrifice, the legal regimes involved and the number parties. Clearly, the benefits of modifying the “usual” general average process will be greatest in a container casualty scenario but that’s not say that it should not be considered when other types of vessel are involved.
By: Alex Kemp, Senior Associate at Solicitors Holman Fenwick Willan LLP and Associate of the Association of Average Adjusters
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Thursday, 28 September 17
CHINESE GOVERNMENT TO CANCEL DOMESTIC IRON ORE MINING RIGHTS - JEFFREY LANDSBERG
It has been reported that China will cancel roughly one third of its iron ore mining licenses, says Commodore Research & Consultancy in its lat ...
Tuesday, 26 September 17
REDUCING THE RISK OF LIQUEFACTION - IUMI
KNOWLEDGE TO ELEVATE
Liquefaction is a phenomenon that can take place in granular materials, such as soil or fine ore, where the beh ...
Tuesday, 26 September 17
THE CURRENT HIGHS IN THE DRY BULK FREIGHT MARKET WILL SURELY BE SURPASSED AND BY A CONSIDERABLE MARGIN IN THE NEXT YEAR OR SO - GEORGE LAZARIDIS
The Dry Bulk market con!nues to show a strong face amidst the favorable tail winds being seen, which have helped the Bal!c Dry Index inch above the ...
Monday, 25 September 17
CHOICES FOR SHIPPING AS 2020 APPROACHES? - CLARKSONS
Historically, the fuel of choice for the vast majority of large cargo ships has been heavy fuel oil. But in 2020, sulphur oxide emissions will be c ...
Monday, 25 September 17
THE FREIGHT MARKET ROSE IN ALL SEGMENTS EXCEPT PANAMAX WEEK OVER WEEK
COALspot.com: The freight market rose in all segments except Panamax week over week. Mainly Cape has supported to boosted up BDI this past week, BD ...
|
|
|
Showing 1931 to 1935 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- McConnell Dowell - Australia
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Bukit Baiduri Energy - Indonesia
- Power Finance Corporation Ltd., India
- Chamber of Mines of South Africa
- Coastal Gujarat Power Limited - India
- Metalloyd Limited - United Kingdom
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- London Commodity Brokers - England
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- Holcim Trading Pte Ltd - Singapore
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- Madhucon Powers Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Orica Mining Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- Ministry of Mines - Canada
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- Minerals Council of Australia
- Merrill Lynch Commodities Europe
- SN Aboitiz Power Inc, Philippines
- Australian Coal Association
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- Aditya Birla Group - India
- GN Power Mariveles Coal Plant, Philippines
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parliament of New Zealand
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- ASAPP Information Group - India
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- Aboitiz Power Corporation - Philippines
- Uttam Galva Steels Limited - India
- CIMB Investment Bank - Malaysia
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- MS Steel International - UAE
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
|
| |
| |
|
