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, 06 July 17
SUPRAMAX: INDO TO INDIA TRIPS WITH DELIVERY THAILAND RANGE IS GIVING OWNERS AROUND MID $8000 - FEARNLEYS
Supramax
Another slow start to the week with somewhat softening rates and few fixtures.
According to Fearnleys Weekly Dry bulk report, the N ...
Thursday, 06 July 17
UNEXPECTED MOVE FROM CHINA BOOSTS COAL PRICES - OIL PRICE
Coal prices have been cooling the last few months — after a spectacular run last year. But news late last week suggests the market is about t ...
Wednesday, 05 July 17
COAL PRICES ROSE IN CHINA, JAPAN AND EUROPE IN 2016 - BP
COALspot.com: Coal prices rose in China, Japan and Europe in 2016 after four years of price declines.
According to bp, the rise in coal prices ...
Wednesday, 05 July 17
TANKER MARKET INSIGHT - KATERINA RESTIS
A war of words blasted last month as the UAE, S. Arabia, Egypt and Bahrain revealed that they are experiencing severe diplomatic issues with the st ...
Wednesday, 05 July 17
TROUBLE SEEMS TO BE LOOMING ONCE MORE IN THE STEEL INDUSTRY - GEORGE LAZARIDIS
Trouble seems to be looming once more in the steel industry as US President Trump puts forth his plans for specialist protectionist measures for th ...
|
|
|
Showing 2011 to 2015 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- Marubeni Corporation - India
- CNBM International Corporation - China
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Energy Development Corp, Philippines
- Agrawal Coal Company - India
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- The University of Queensland
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Bhushan Steel Limited - India
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Kideco Jaya Agung - Indonesia
- Rio Tinto Coal - Australia
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- Medco Energi Mining Internasional
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Pendopo Energi Batubara - Indonesia
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- White Energy Company Limited
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- Posco Energy - South Korea
- Dalmia Cement Bharat India
- Singapore Mercantile Exchange
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Salva Resources Pvt Ltd - India
- Ministry of Finance - Indonesia
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Borneo Indobara - Indonesia
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- ICICI Bank Limited - India
- Savvy Resources Ltd - HongKong
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Australian Coal Association
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
|
| |
| |
|
