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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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Saturday, 15 February 20
AFRAMAX: A MORE POSITIVE ATTITUDE EXISTED IN THIS SECTOR WITH RATES IMPROVING ON ALL ROUTES - BALTIC BRIEFING
VLCC
The market in the Middle East was unmoved this week, with Chinese refiners continuing to slow imports, allied with the impact of the Coron ...
Saturday, 15 February 20
A 56,000DWT VESSEL WAS CONCLUDED BASIS DELIVERY SINGAPORE VIA INDONESIA REDELIVERY CHINA IN THE LOW $6,000S - BALTIC BRIEFING
Capesize
Riding the downward momentum of the previous week, the market was always going to be hard pressed to make any sort of revival. With mu ...
Saturday, 15 February 20
U.S. COAL PRODUCTION WILL TOTAL 595 MMST IN 2020, DOWN 14% FROM 2019 - EIA
EIA forecasts that U.S. coal production will total 595 million short tons (MMst) in 2020, down 95 MMst (14%) from 2019.
Lower ...
Friday, 14 February 20
WHY THE WORLD ECONOMY WILL BE FACING CHINA'S CORONAVIRUS FOR A LONG TIME - CNBC
Everywhere we look we see the headlines and commentators talking about the coronavirus and its impact on tourism, trade and investment between Chin ...
Friday, 14 February 20
KOWEPO INVITED BIDS FOR 1.275 MILLION TONS OF MIN. 5,600 NCV COAL
COALspot.com: Korea Western Power Co. Ltd (KOWEPO). as a representative of five Korean Gencos has issued an international tender for total 1,275,00 ...
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- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Cement Manufacturers Association - India
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- PTC India Limited - India
- Chamber of Mines of South Africa
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- IEA Clean Coal Centre - UK
- Edison Trading Spa - Italy
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- Electricity Authority, New Zealand
- Central Java Power - Indonesia
- Indonesian Coal Mining Association
- Minerals Council of Australia
- Indogreen Group - Indonesia
- CNBM International Corporation - China
- Grasim Industreis Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- Renaissance Capital - South Africa
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- Planning Commission, India
- Heidelberg Cement - Germany
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- SMG Consultants - Indonesia
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- Baramulti Group, Indonesia
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- GVK Power & Infra Limited - India
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Energy Development Corp, Philippines
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Latin American Coal - Colombia
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Central Electricity Authority - India
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dalmia Cement Bharat India
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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