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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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Friday, 14 February 20
IS THE US COAL INDUSTRY COMPLETELY BURNED OUT? -FORBES
This is the fourth of a multi-part series on the state of the main sources of energy in the US and how they compare globally. The series will cover ...
Friday, 14 February 20
FITCH RTGS: GLOBAL PORTS VULNERABLE TO CORONAVIRUS - RELATED VOLUME DECLINES
Global ports will see reduced trade volumes as a result of the coronavirus, COVID-19, which would become more severe should Chinese production take ...
Thursday, 13 February 20
INDIA: MAJOR PORTS SHOW MUTED GROWTH IN CARGO AS THERMAL COAL VOLUME SLIDES 15% - BUSINESS STANDARD
A sharp slide of 15 per cent in thermal coal volumes weighed on the performance of major ports during the period of April-January of FY20. The majo ...
Wednesday, 12 February 20
REFINING SET FOR A CHALLENGING 2020 - WOOD MACKENZIE
Downstream isn’t the glamorous end of the oil business. And in Big Oil, it’s typically dwarfed by upstream. Yet having been forced to r ...
Wednesday, 12 February 20
COAL INDIA WILL EXCEED LAST YEAR'S PRODUCTION FIGURES: OFFICIAL - PTI
Despite coal production being hampered at Dipka mines due to prolonged rains, Coal India Ltd will exceed last year’s production figures, a to ...
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- Indo Tambangraya Megah - Indonesia
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Mercuria Energy - Indonesia
- Ministry of Transport, Egypt
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Larsen & Toubro Limited - India
- Riau Bara Harum - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Agrawal Coal Company - India
- Heidelberg Cement - Germany
- Planning Commission, India
- Semirara Mining and Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Global Coal Blending Company Limited - Australia
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Bhatia International Limited - India
- The University of Queensland
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Parry Sugars Refinery, India
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Vizag Seaport Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Ambuja Cements Ltd - India
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Power Finance Corporation Ltd., India
- Bukit Baiduri Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- VISA Power Limited - India
- Standard Chartered Bank - UAE
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- Edison Trading Spa - Italy
- Romanian Commodities Exchange
- Thai Mozambique Logistica
- Gujarat Sidhee Cement - India
- Simpson Spence & Young - Indonesia
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
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