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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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Tuesday, 08 August 17
COAL SALES DESTINATION IS DOMINATED BY DEVELOPING COUNTRIES IN ASIA - ADARO
COALspot.com: Adaro Energy has produced 13.27 million tonnes of coal during the second quarter of 2017, from the mines PT Adaro Indonesia, PT Semes ...
Tuesday, 08 August 17
KOMIPO INVITES BIDS FOR 5200 AND 5700 NAR COAL FOR Q4 2017
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued an another new tender for 420,000 Metric Tons of Bituminous coal ...
Monday, 07 August 17
INDIA'S THERMAL COAL IMPORTS HAVE FALLEN BY 16% YEAR-ON-YEAR IN THE FIRST FIVE MONTHS OF THIS YEAR
COALspot.com: The second quarter of 2017 was characterized by volatility in the coal market driven by policy measures and weather disruptions say A ...
Monday, 07 August 17
BUMA SIGNED $385 MILLION WORTH OF NEW CONTRACT WITH PT PADA IDI
COALspot.com: PT Delta Dunia Makmur Tbk., has announced that its subsidiary, PT Bukit Makmur Mandiri Utama ("BUMA"), has entered into min ...
Monday, 07 August 17
THE SHIPPING INDEXES BOUNCE BACK THIS PAST WEEK
COALspot.com: The Freight market rose this past week compared to the previous week, as BDI, Cape and Panamax indexes show a positive trend week ove ...
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Showing 1981 to 1985 news of total 6871 |
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- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Borneo Indobara - Indonesia
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Antam Resourcindo - Indonesia
- Sojitz Corporation - Japan
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- OPG Power Generation Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Sree Jayajothi Cements Limited - India
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Orica Mining Services - Indonesia
- Australian Coal Association
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- McConnell Dowell - Australia
- Kumho Petrochemical, South Korea
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- PTC India Limited - India
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining Corp, Philippines
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- Mercator Lines Limited - India
- Rashtriya Ispat Nigam Limited - India
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Star Paper Mills Limited - India
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- IHS Mccloskey Coal Group - USA
- Karaikal Port Pvt Ltd - India
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- The University of Queensland
- Global Business Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Australian Commodity Traders Exchange
- Coastal Gujarat Power Limited - India
- South Luzon Thermal Energy Corporation
- Indo Tambangraya Megah - Indonesia
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Electricity Authority, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- Ministry of Mines - Canada
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- Aditya Birla Group - India
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Essar Steel Hazira Ltd - India
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Meenaskhi Energy Private Limited - India
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