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Monday, 03 March 14
COSTS LIABILITY PASSING DOWN A CHARTERPARTY CHAIN - SKULD
 KNOWLEDGE TO ELEVATE
Provided that charterparties are on back to back terms, and the claim is successful, liability for costs incurred should be able to be passed down a charterparty chain. A technical issue will not be allowed to prevent such liability for costs being passed down a charterparty chain. This is illustrated by the recent case outlined below:
Occidental Chartering INC. V Progress Bulk Carrier Ltd (2012) EWHC3515
Background facts
This case involved a chain of charterparties.
- Precious Garnets Ltd (PG), Head Owners time chartered the MV Chada Naree to the Disponent Owners Occidental Services Corporation (OSC).
- OSC did not enter into a charterparty but instead re-let the vessel to a company within its corporation known as Occidental Chartering Inc (OCI).
- OCI time-chartered this vessel onto Progress Bulk Carriers (PBC).
- PBC in turn, sub-chartered this vessel onto CNAN.
At all times, the charterparties including the re-let agreement between OCI and OSC, were on material and identical terms. CNAN during the proceedings became divested of all its assets.
PG, Head Owners, commenced arbitration proceedings against OSC for a claim in damages against them for a breach of a safe port warranty obligation under the head charter. This claim succeeded in favour of the Head Owners and therefore passed down the charterparty chain including all legal costs initiated for recovery. During the entire arbitration proceedings there was no issue or dispute about the relationship between OSC and OCI as the arbitrators did not appear to draw a distinction between the two.
However, when the awards were handed down there were typographical errors on the written awards. The main issue arose in connection to the award between OCI and PBC. The party named as the claimants on this award was OSC and not OCI. This error lead to a technical dispute having to be resolved. It is noted that a distinction needs to be drawn between the initial claim for damages and the claim for recovering costs in pursuing the matter. The claim for damages to the vessel was not disputed. However, OCI's recoverability of costs from PBC was.
Position of the parties
The distinction between OCI/OSC was not foreseen at the time of the initial arbitration but PBC contended that OCI was not party to the charterparty chain and thus the recoverability for costs claim could not be passed down the chain via the Head Owners. PBC therefore argued that OCI had not incurred any liability for costs which could be claimed against themselves.
The Tribunal's award
The Tribunal was persuaded in favour of PBC's arguments and it published a second award which held that OCI were not entitled to recover the costs incurred in the head arbitration between OSC and PG.
Judgment by the Commercial Court of Appeal
OCI was granted leave to appeal the second award. The fundamental issue before Mr Justice Teare was to decide whether it is possible for a party to recover costs for a claim to which it had not been liable to pay to a third party. This case was fact specific and the judge felt that the Tribunal had not fully considered the background to the award i.e. that during the initial arbitration all parties had the intention of treating OCI and OSC as one.
Comments
The Appeal reaffirms the standard position that where there is a claim successfully being passed down through a chain of charterparties and where there was a break in the chain, this would not necessarily prevent the liability for costs from being passed down the chain. OCI was therefore entitled to recover all costs incurred from PBC including Head Owners legal costs, the legal costs of OSC for defending the matter as well as OCI's legal costs in pursing it in terms of the appeal.
Advice
If engaged in chartering, and using a possible "in-house" re-letting it is important to check that contractual chains are fully maintained, and there is an unbroken link down to the further sub-charterers of the vessel. That way, if a liability needs to be passed on the contractual chain, the risk of a "liability gap" are mitigated.
Furthermore it must be remembered that costs liabilities can only be passed on in successful claims, or face the situation similar to the Vakis T [2004] 2 Lloyd's Rep. 465 where it was not possible to recover costs up the line when the main claim itself was unsuccessful.
Source: Skuld / Hellenic Shipping News
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Friday, 05 January 24
BANGLADESH’S 2023 COAL-FIRED POWER OUTPUT TRIPLED, EASING SHORTAGES - REUTERS
Bangladesh nearly tripled its coal-fired power output in 2023, a Reuters analysis of government data showed, helping it tide over the worst power s ...
Tuesday, 02 January 24
COAL TRADE CONTINUES TO HEAD EAST - BALTIC EXCHANGE
The global coal trade, once concentrated in the Pacific and Atlantic basins, is undergoing a significant transformation, as highlighted in the Inte ...
Tuesday, 02 January 24
COAL CARGOES: AVOIDING EXPLOSION AND SELF-HEATING - GARD
KNOWLEDGE TO ELEVATE
Despite its contribution to greenhouse gas emissions, global coal consumption climbed to an all-time high in 2022 and is ...
Tuesday, 02 January 24
SINOPEC FORECASTS CHINA’S COAL CONSUMPTION TO PEAK AROUND 2025 - REUTERS
China Petrochemical Corp, or Sinopec, expects coal consumption to peak around 2025 at 4.37 billion metric tons, the state energy group said in an o ...
Thursday, 07 December 23
CHINA TO SET UP COAL PRODUCTION RESERVE TO STABILISE PRICES - REUTERS
China will establish a back-up coal production system by 2027 to stabilise prices and secure coal supply, the state planner said on Wednesday, even ...
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Showing 61 to 65 news of total 6871 |
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- LBH Netherlands Bv - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Transport, Egypt
- South Luzon Thermal Energy Corporation
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- Energy Link Ltd, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- Standard Chartered Bank - UAE
- Oldendorff Carriers - Singapore
- Central Electricity Authority - India
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Karbindo Abesyapradhi - Indoneisa
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- Planning Commission, India
- Larsen & Toubro Limited - India
- Africa Commodities Group - South Africa
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Videocon Industries ltd - India
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Ceylon Electricity Board - Sri Lanka
- Cement Manufacturers Association - India
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Banpu Public Company Limited - Thailand
- Australian Coal Association
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Indonesian Coal Mining Association
- Antam Resourcindo - Indonesia
- Parliament of New Zealand
- Eastern Energy - Thailand
- Anglo American - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Kartika Selabumi Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Coal and Oil Company - UAE
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- Ambuja Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Binh Thuan Hamico - Vietnam
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- MS Steel International - UAE
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- Edison Trading Spa - Italy
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- India Bulls Power Limited - India
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Krishnapatnam Port Company Ltd. - India
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- Latin American Coal - Colombia
- Karaikal Port Pvt Ltd - India
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
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