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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
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Thursday, 14 September 17
THE FIRM COAL TRADE IS SUPPORTING SUPRAS; FIXING AROUND LOW $13000 WITH DELIVERY THAILAND - FEARNLEYS
Supramax
This week has brought Supras firm rates and numerous orders. Scrap orders from Cont to Med still pay $11000 and Fertilizer from Baltic t ...
Thursday, 14 September 17
KOMIPO INVITED BIDS FOR 5700 NAR BITUMINOUS COAL FOR BORYEONG POWER PLANT; 390K MT FOR NOV LOADING
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued an another new tender for 390,000 Metric Tons of Bituminous coal ...
Wednesday, 13 September 17
U.S. COAL EXPORTS FOR THE FIRST SIX MONTHS OF 2017 WERE 55% HIGHER COMPARED TO THE SAME PERIOD IN 2016 - EIA
COALspot.com: EIA expects the share of U.S. total utility-scale electricity generation from natural gas to fall from an average of 34% in 2016 to a ...
Wednesday, 13 September 17
SOME THOUGHTS ON NORTH KOREA, US & CHINA - THEODORE NTALAKOS
The trade volume between North Korea and China is more than $5 billion per year. 83% of North Korea's exports end up in China; similarly, about ...
Tuesday, 12 September 17
NEWCASTLE FOB PRICES ROSE STRONGLY AND ARE NOW THREATENING TO BREAK THROUGH US$100/T - DANIEL HYNES
COALspot.com: The rise in crude oil market supported further gains in thermal coal, says Daniel Hynes Senior Commodity Strategist at ANZ.
Acco ...
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Showing 1941 to 1945 news of total 6871 |
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- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- Trasteel International SA, Italy
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Economic Council, Georgia
- Semirara Mining and Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Indian Oil Corporation Limited
- Coal and Oil Company - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- India Bulls Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- OPG Power Generation Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- Electricity Generating Authority of Thailand
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Planning Commission, India
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- Karbindo Abesyapradhi - Indoneisa
- MS Steel International - UAE
- Minerals Council of Australia
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Coastal Gujarat Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Indika Energy - Indonesia
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- Parliament of New Zealand
- ICICI Bank Limited - India
- CIMB Investment Bank - Malaysia
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- PowerSource Philippines DevCo
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Ambuja Cements Ltd - India
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- Karaikal Port Pvt Ltd - India
- Malabar Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Siam City Cement - Thailand
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- Kobexindo Tractors - Indoneisa
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
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