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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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Sunday, 30 March 14
FREIGHTS FROM INDONESIA TO INDIA IS EXPECTED TO BE SOFT NEXT WEEK - REDDY
COALspot.com: The freight market dropped drastically and all sectors were affected severely.
The BDI was down by 14.13 pct and closed at 1, ...
Friday, 28 March 14
US PRODUCED APPROXIMATELY 18.9 MMST IN A WEEK - EIA
COALspot.com – United States the world's second largest coal producer, produced approximately 18.9 million short tons (mmst) of coal i ...
Friday, 28 March 14
CHINA'S ENVIRONMENTAL MEASURES WILL NOT CURB GROWTH IN DOMESTIC STEEL PRODUCTION AND SEABORNE IRON ORE - WOOD MACKENZIE SAYS
Steel plants in China have been targeted as a major source of the toxic smog enveloping Beijing and Shanghai. Emergency measures have been impos ...
Thursday, 27 March 14
PANAMAX : SEEMS TO HEAD FURTHER DOWN; CAPESIZE : ANOTHER CHOPPY AND UNPREDICTABLE WEEK - FEARNLEYS AS
Handy
A weaker sentiment for the smaller size as well, with reduced activity in the Atlantic where Owners have to face significantly lower ret ...
Wednesday, 26 March 14
NEWBUILDING ORDERING ACTIVITY PICKS UP PACE ON IMPROVING DRY BULK MARKET CONDITIONS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The gradual improvement of the dry bulk market, as expected for some time now, is urging shipowners to increase their newbuilding ordering activ ...
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- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Edison Trading Spa - Italy
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- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Heidelberg Cement - Germany
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- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Attock Cement Pakistan Limited
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- Economic Council, Georgia
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- Commonwealth Bank - Australia
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- Bulk Trading Sa - Switzerland
- Sakthi Sugars Limited - India
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- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
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- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
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- MS Steel International - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
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- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Minerals Council of Australia
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- Orica Mining Services - Indonesia
- Dalmia Cement Bharat India
- Manunggal Multi Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
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- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Indian Oil Corporation Limited
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
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- Planning Commission, India
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- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
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- Therma Luzon, Inc, Philippines
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- Petron Corporation, Philippines
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- TeaM Sual Corporation - Philippines
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- Australian Commodity Traders Exchange
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- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
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- Intertek Mineral Services - Indonesia
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- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Australian Coal Association
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- Sree Jayajothi Cements Limited - India
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
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- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- Straits Asia Resources Limited - Singapore
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- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
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- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
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- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Singapore Mercantile Exchange
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- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- The University of Queensland
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- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
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- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Ambuja Cements Ltd - India
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- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
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- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
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