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.
|
|
Tuesday, 12 September 17
KOMIPO TO IMPORT 2.5 MILLION TONS OF 5700 NAR COAL FOR 5 YEARS
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued an another new tender for total 500,000 Metric Tons of Bituminous ...
Monday, 11 September 17
A PUNCHY WEEK FOR THE BIG SHIPS AS THE RATE FOR WEST AUSTRALIA TO CHINA HIT $8.00 THE FIRST TIME IN NEARLY THREE YEARS - BALTIC EXCHANGE
Capesize
A punchy week for the big ships as the rate for West Australia/China hit $8.00 the first time in nearly three years. A Jiangsu Steamship ...
Monday, 11 September 17
INDONESIAN ICPR SURGES HIGHER, POSTS BIGGEST MONTHLY RISE SINCE DECEMBER 2016, ESDM DATA SHOWS
COALspot.com: Indonesian coal benchmark price surges 9.60% in September, government data showed.
The benchmark price of Indonesian th ...
Monday, 11 September 17
KOMIPO INVITED BIDS FOR TOTAL 6.235 MMT OF 5700 AND 5100 NAR COAL FOR 2017 TO 2022 LOADING
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued an another new tender for total 1,590,000 Metric Tons of Bitumino ...
Monday, 11 September 17
THE FREIGHT MARKET ROSE WEEK OVER WEEK; BCI UP 22.22% & BPI UP 14.77%
COALspot.com: The freight market rose in all segments week over week. Mainly Cape and Panamax have supported to pushed up BDI this past week, BDI, ...
|
|
|
Showing 1946 to 1950 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Deloitte Consulting - India
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Coal Council - USA
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- MS Steel International - UAE
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Bhushan Steel Limited - India
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- Simpson Spence & Young - Indonesia
- PNOC Exploration Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Directorate Of Revenue Intelligence - India
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Coal and Oil Company - UAE
- Goldman Sachs - Singapore
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- The Treasury - Australian Government
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ind-Barath Power Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- Aditya Birla Group - India
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Minerals Council of Australia
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Meralco Power Generation, Philippines
- Global Coal Blending Company Limited - Australia
- The University of Queensland
- Indian Energy Exchange, India
- Rio Tinto Coal - Australia
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Miang Besar Coal Terminal - Indonesia
- Africa Commodities Group - South Africa
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- South Luzon Thermal Energy Corporation
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- Anglo American - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Toyota Tsusho Corporation, Japan
- Neyveli Lignite Corporation Ltd, - India
|
| |
| |
|
