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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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Monday, 07 April 14
WEEKLY SUB-BIT FOB INDONESIA COAL SWAP CLAIMS EDGE FALL; TREND NEGATIVE
COALspot.com: Indonesian coal swaps for average Q4’ 2014 lost on month, day and on week according to AsiaClear OTC coal swap's reports ...
Monday, 07 April 14
API 8 CFR SOUTH CHINA COAL SWAPS GAINED 2.09% M-O-M
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries gained 2.09 percent month on month and closed at US$ 75.68 per ...
Sunday, 06 April 14
THE FREIGHT MARKET KEEPS SLIDING
COALspot.com: The freight market continued to drop this week. The BDI (Baltic Dry Index) is a widely followed metric that reflects the overall r ...
Friday, 04 April 14
UNITED STATES COAL OUTPUT UP 5.4% IN PAST WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 19.9 million short tons (mmst) of coal i ...
Thursday, 03 April 14
PANAMAX SECTOR IS WATCHING A SEVERE DROP IN RATES - FEARNLEYS
Handy
A further weaker sentiment for the Supras as well in both hemispheres this week with oversupply of tonnage being the major headline. Tra ...
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- Merrill Lynch Commodities Europe
- McConnell Dowell - Australia
- GN Power Mariveles Coal Plant, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- White Energy Company Limited
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Dalmia Cement Bharat India
- Medco Energi Mining Internasional
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- SMG Consultants - Indonesia
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Oldendorff Carriers - Singapore
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- Neyveli Lignite Corporation Ltd, - India
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Singapore Mercantile Exchange
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Ambuja Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Gujarat Mineral Development Corp Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- Sical Logistics Limited - India
- Bhatia International Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bhushan Steel Limited - India
- Therma Luzon, Inc, Philippines
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Marubeni Corporation - India
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- Samtan Co., Ltd - South Korea
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- Orica Australia Pty. Ltd.
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Economic Council, Georgia
- Karbindo Abesyapradhi - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Bukit Makmur.PT - Indonesia
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- GAC Shipping (India) Pvt Ltd
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- TNB Fuel Sdn Bhd - Malaysia
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Java Power - Indonesia
- Kobexindo Tractors - Indoneisa
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
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