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Wednesday, 02 April 14
CHINA: ARBITRATION CLAUSES IN BILLS OF LADING UNDER CHINESE LEGAL PRACTICE - SKULD
 KNOWLEDGE TO ELEVATE
Successful incorporation of a charterparty arbitration clause into the bills of lading is not a straight forward matter under China jurisprudence and recently a Chinese maritime court dismissed the owners' motion to refer the case to arbitration, because it was held that the C/P arbitration clause incorporated into the B/L was not effective. Details of the matter are as follows. Key points following the legal decision are:
- Although the said B/L recorded on the front page that it was: "to be used with charterparty", there was no express statement in the bill terms for incorporating the arbitration clause from the C/P.
- The standard incorporation clause in the back page of the B/L could not constitute a valid incorporation of the arbitration clause under Chinese law and practice.
- If any C/P terms are to be recognised as incorporated then they would be those of the voyage charter to which the cargo receiver was a party - not the head time C/P. This is because the time C/P is in the nature of being primarily a leasing contract .
Facts of this case
The vessel owners concluded a time C/P as with a charterer. One of the rider clauses provided that English law shall be applicable, and a further clause provided that any dispute arising from the C/P shall be submitted to arbitration at the LMAA.
As part of her charter employment, the vessel carried a cargo of iron ore fines from South America to China. According to the B/L, the shipper South American and the receiver was a Chinese Steel Mill.
While on route the vessel was involved in collision with another vessel. The owners appointed salvors to conduct salvage, and concluded a LOF contract. General average was declared. The salvage was successful, and the Chinese Steel Mill (through its insurers) had to provide general average security to the vessel.
The general average apportionment of salvage costs to cargo was significant, and the Chinese Steel Mill commenced proceedings in China for an indemnity against the ship-owner. The owners raised objection to jurisdiction on the basis that the provisions of the time C/P, including the arbitration clause had been incorporated into the B/L, and thus was binding upon the Steel Mill. The expert opinion of English lawyers was put forward to confirm that the terms of the C/P were successfully incorporated in to the bills of lading, including the arbitration clause.
First instance trial before the Chinese Maritime Court
The Maritime Court dismissed the objection to jurisdiction for the following reasons:
- The case was about compensation of ship collision / general average salvage rewards. Hence, the case fell into the scope of the contract of the carriage of goods by sea.
- Although the said B/L recorded on the front page that: "to be used with charterparty", there was no express statement in the bill terms for incorporating the arbitration clause in the C/P. The standard incorporation clause in the back page of the B/L cannot constitute valid incorporation.
- Meanwhile, the C/P which the owner claimed was to be incorporated into the B/L was a time C/P between the owner and the charterer only. The C/P arbitration clause was only there for resolving the disputes arising from the leasing of the vessel. It was not an arbitration clause for purpose of carriage of goods by sea under the voyage C/P.
- The local Maritime Court, as the nearest court at the port of the destination of the said carriage contract, should have jurisdiction over this case.
Appeal judgment High People's Court
The owners then appealed to the High People's Court and the appeal court dismissed the objection to jurisdiction for reason that:
- Although it is stated on the face of the involved B/L that the said B/L should be used with the C/P, the said C/P to be used with B/L shall be the voyage C/P and not the time C/P to which the owner was a party.
- However, the C/P provided by the owners was a time C/P and there was also no record on the face of the B/L regarding the specific C/P concerned and no express acceptance to have the C/P arbitration clause incorporated.
Observation on this case and comment
Chinese courts hold a stringent view concerning the issue of incorporating the C/P arbitration clause into the B/L. In this case, a key issued appeared to be that the C/P terms sought to be incorporated came from the time C/P, instead of a voyage C/P.
It should also be noted that in 2004 the Qingdao Maritime Court also held that a time C/P is primarily a vessel leasing contract, and although it also has some clauses regarding transportation of cargo it is still primary a leasing contract which is very different from voyage C/P.
The Qingdao Maritime Court continued to say that the B/L relationship is different to the time C/P legal relationship, and because of the rooted difference in this respect, the time C/P arbitration clause cannot be incorporated into the B/L.
Although China is not a case law country, the reasoning of Chinese courts in this regard should be paid attention to for handling of other similar cases.
By Philip Peng
Hai Tong & Partners, Beijing
Source: Skuld / Hellenic Shipping
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Friday, 02 May 14
US WEEKLY COAL PRODUCTION RELATIVELY FLAT AT -0.1%, SAYS EIA
COALspot.com – United States the world's second largest coal producer, produced approximately 19.0 million short tons (mmst) of coal i ...
Friday, 02 May 14
DRY BULK MARKET SHOWING SIGNS OF COMEBACK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market which has been hovering below the 1,000-point market (BDI) during the past couple of weeks, could be exhibiting signs of a s ...
Thursday, 01 May 14
INDONESIA EXPORT BAN POINTS TO QUESTIONS OVER CHINA'S LONG-TERM BAUXITE SUPPLY - WOOD MACKENZIE
China’s Bauxite demand forecast to reach 240 million tonnes by 2030
In light of the Indonesian mineral ore ban that came into force o ...
Thursday, 01 May 14
DRY BULK MARKET STILL REELING UNDER PRESSURE FROM VARIOUS FACTORS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market's revival is still overdue, as the industry's benchmark, the BDI is still lagging below the 1,000-point mark. In fac ...
Wednesday, 30 April 14
FREIGHT MARKET FOR DRY BULKERS STILL REMAINS WEAK - INTERMODAL
One week after the Easter holiday and the celebration for the resurrection of Christ, everybody expected to see a similar sign of a revival in t ...
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- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- Petron Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- Kumho Petrochemical, South Korea
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- IEA Clean Coal Centre - UK
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Anglo American - United Kingdom
- GAC Shipping (India) Pvt Ltd
- GN Power Mariveles Coal Plant, Philippines
- Merrill Lynch Commodities Europe
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement - Thailand
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- Antam Resourcindo - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- GVK Power & Infra Limited - India
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- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Vedanta Resources Plc - India
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- The University of Queensland
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- Port Waratah Coal Services - Australia
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
- Eastern Coal Council - USA
- ASAPP Information Group - India
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- New Zealand Coal & Carbon
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Baramulti Group, Indonesia
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
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- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- Bhoruka Overseas - Indonesia
- Binh Thuan Hamico - Vietnam
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- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- The Treasury - Australian Government
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- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- White Energy Company Limited
- Mintek Dendrill Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Latin American Coal - Colombia
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- SMC Global Power, Philippines
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- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Bhushan Steel Limited - India
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- Therma Luzon, Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Mjunction Services Limited - India
- Energy Development Corp, Philippines
- Economic Council, Georgia
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- Singapore Mercantile Exchange
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- Planning Commission, India
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- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Goldman Sachs - Singapore
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Coal Association
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Edison Trading Spa - Italy
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
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