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Tuesday, 03 March 20
IMPORTANCE OF MASTER'S CARGO CHECKS - BALTIC EXCHANGE
 KNOWLEDGE TO ELEVATE
Adecision in recent High Court case has made it clear that there is no implied indemnity from a charterer to their counterpart owners if cargo shippers present bills of lading that record the cargo as being loaded clean on board, even if the shippers could have ascertained that the cargo was in fact damaged at the time of loading.
Ince partner Jamila Khan and managing associate Natalie Nielsen lay out the facts of the case. Noble Chartering Inc (the disponent owner) timechartered a vessel from the head owner and then sub-voyage chartered the vessel to Priminds Shipping (HK) Co Ltd (the voyage charterer). Under the voyage charterparty, the vessel loaded a cargo of soya beans in bulk at Santos, Argentina, for discharge at Guangzhou, China. The cargo was loaded by the cargo shipper from a silo via mechanical hoppers.
At the discharge port, the cargo receiver discovered that portions of the cargo had suffered heat and mould damage. In order to prevent the arrest of the vessel, the shipowner secured the receiver’s cargo claim and agreed that it would be subject to Chinese law and the jurisdiction of the Chinese courts. The receiver’s cargo claim was litigated in the Chinese courts, who found the shipowner liable to the receiver for $1,086,564.70.
The shipowner in turn brought a claim against the disponent owner under the terms of the time charterparty, seeking a contribution of 50% of the sum paid to the receiver. This claim was settled by the disponent owner paying $500,000 to the shipowner.
The disponent owner then commenced London arbitration against the voyage charterer under the voyage charterparty, seeking to recover the $500,000 paid to the shipowner and the costs of defending that claim. The disponent owner claimed that they were owed an indemnity for these costs, although there was no express provision in the voyage charterparty providing for such an indemnity.
Arbitration findings
Following arbitration, the Tribunal’s Award highlighted the facts that the cargo had been damaged by heating caking and by mould; that both types of damage were pre-existing at the time of loading but were not reasonably visible to the Master during loading, so the Master could not have verified the condition of the cargo; and the damage would have been reasonably visible to the shipper at the time of loading.
The disponent owner argued that the words “Clean on Board” and “SHIPPED at the Port of Loading in apparent good order and condition” in the draft bill of lading that the shipper provided to the Master for his signature amounted to a representation or warranty by the shipper as to the apparent condition of the cargo at the time of loading. The disponent owners pointed out that the shipper was acting as the voyage charterer’s agent in loading the cargo and said that, by presenting the draft bill of lading in those terms, it had represented that the cargo was in good order when it was loaded – although it was not – and so the voyage charterer owed them an indemnity for the losses caused by the cargo damage.
The Court rejected this argument, stating that although the Hague Rules provide an indemnity in respect of information provided by the charterer which is included in the bills of lading (for example, the marks on bales of cargo or the cargo weights), this indemnity did not extend to statements concerning the apparent order and condition of the cargo. The wording relating to the condition of the cargo in the draft bill of lading was not a representation or a warranty by the shipper or voyage charterer, but was instead an invitation to the Master to make a representation of fact about the state of the cargo, in accordance with his own assessment of the cargo’s apparent condition. Accordingly, the Court held that the voyage charterer did not owe an implied indemnity to the disponent owner in relation to the cargo claim.
Viewpoint
Commented Ms Khan and Ms Nielsen: “Industry observers are unlikely to be surprised by the Court’s ruling in this case, as it has long been understood that it is incumbent on a master to perform his own assessment of the apparent state of the cargo during loading and, if necessary, to clause the bill of lading (despite any “clean” wording in the draft provided by the shippers).
“In practice, a master is often not in a position to make an accurate assessment of the condition of the cargo while it is being loaded. Under English law this gives the shipowners a defence under the Hague/Hague-Visby Rules against a claim brought by the cargo receivers. However, due to the global nature of shipping, a shipowner could face a situation where they are obliged to accept the jurisdiction of a local court that does not apply these defences in the same way. In such circumstances, the shipowner will only be able to pass this claim down to their charterers if the charterparty terms permit it, for example by incorporating the terms of the Inter-Club Agreement.
“This decision makes it clear that there is no implied indemnity from a charterer to their counterpart owners if their agents (the cargo shippers) present bills of lading that record the cargo as being loaded clean on board, even if the shippers could have ascertained that the cargo was in fact damaged at the time of loading.”
Source: The Baltic Exchange
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Wednesday, 19 February 20
AS OCEAN TEMPERATURES RISE, SHIPOWNERS LOOK FOR WAYS TO COPE - WARTSILA
The world is heating up, and its oceans are no exception. According to the International Panel on Climate Change (IPCC), the oceans absorb the majo ...
Wednesday, 19 February 20
MARKET INSIGHT - INTERMODAL
The coronavirus outbreak is estimated to negatively affect global economy by at least EUR400bn this year, representing around the 0.4% of global GD ...
Tuesday, 18 February 20
WEEKLY MARKET ANALYSIS - ALLIED
Under such poorly performing market circumstances, many usually take the historical approach, in order to better understand and further analyze the ...
Tuesday, 18 February 20
ADARO SHIPPED 27 PERCENT OF ITS TOTAL COAL PRODUCTION IN 2019 TO INDIA AND CHINA
PT Adaro Energy Tbk (AE) produced 58.03 Mt of coal from PT Adaro Indonesia (AI), Balangan Coal Companies and Adaro Me ...
Tuesday, 18 February 20
ADARO REMAINS POSITIVE ON THE LONG-TERM FUNDAMENTALS OF COAL MARKET SUPPORTED BY THE SOUTHEAST ASIA AND SOUTH ASIA REGION
The global seaborne thermal coal market in 2019 was faced with macro and industry challenges which pushed international coa ...
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- Indogreen Group - Indonesia
- Aboitiz Power Corporation - Philippines
- The University of Queensland
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Bhoruka Overseas - Indonesia
- Semirara Mining Corp, Philippines
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Parliament of New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Orica Mining Services - Indonesia
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Aditya Birla Group - India
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- LBH Netherlands Bv - Netherlands
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Australian Coal Association
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Iligan Light & Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Sojitz Corporation - Japan
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Merrill Lynch Commodities Europe
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Port Waratah Coal Services - Australia
- Edison Trading Spa - Italy
- Indika Energy - Indonesia
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercuria Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- Kohat Cement Company Ltd. - Pakistan
- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- Parry Sugars Refinery, India
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- Thiess Contractors Indonesia
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Price Waterhouse Coopers - Russia
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- Central Electricity Authority - India
- Maharashtra Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Krishnapatnam Port Company Ltd. - India
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Ministry of Finance - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Bhatia International Limited - India
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- Deloitte Consulting - India
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Baramulti Group, Indonesia
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
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