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, 20 June 17
WORLD ECONOMY SHOWS A MORE OPTIMISTIC TREND
During the past weeks, we have seen many organizations and think tanks show a more optimistic face with regards to the world economy. The World Ban ...
Monday, 19 June 17
PANAMAX RATES HELP BALTIC INDEX TO A POSITIVE MOVE
COALspot.com: The Freight market rose very marginally this past week compared to the previous week, as BDI and Panamax indexes show a positive tren ...
Friday, 16 June 17
WEEKLY U.S. COAL PRODUCTION RISES; UP 24.1% Y/Y
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 15.5 million short tonn ...
Thursday, 15 June 17
SUPRAMAX NICKEL ORE FROM PHILIPPINES TO S. CHINA PAYING AROUND MID $10000 - FEARNLEYS
Supramax
Market looked more promising from both sides of the basins. Within Atlantic USG returned with tick better rates seen as tonnage kept tig ...
Wednesday, 14 June 17
WORLD COAL PRODUCTION FELL BY 6.2%, THE LARGEST ANNUAL DECLINE ON RECORD - BP
COALspot.com: The 2017 edition of the BP Statistical Review of World Energy, shows global energy markets continuing to undergo long-term changes as ...
|
|
|
Showing 2021 to 2025 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Marubeni Corporation - India
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- Petrochimia International Co. Ltd.- Taiwan
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Thiess Contractors Indonesia
- Bhatia International Limited - India
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Samtan Co., Ltd - South Korea
- Aboitiz Power Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Australian Commodity Traders Exchange
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- SN Aboitiz Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Bukit Baiduri Energy - Indonesia
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- India Bulls Power Limited - India
- Parliament of New Zealand
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Singapore Mercantile Exchange
- South Luzon Thermal Energy Corporation
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- Siam City Cement - Thailand
- New Zealand Coal & Carbon
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Renaissance Capital - South Africa
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- White Energy Company Limited
- The University of Queensland
- Sojitz Corporation - Japan
- Sical Logistics Limited - India
- Cement Manufacturers Association - India
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- PetroVietnam Power Coal Import and Supply Company
- Kalimantan Lumbung Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Billiton Holdings Pty Ltd - Australia
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- ASAPP Information Group - India
- Energy Link Ltd, New Zealand
- European Bulk Services B.V. - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- Deloitte Consulting - India
- ICICI Bank Limited - India
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
|
| |
| |
|
