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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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Wednesday, 26 March 14
LARGE AMOUNT OF VESSELS CHARTERED TO HAUL IRON ORE CARGOES TO CHINESE BUYERS THIS WEEK - COMMODORE RESEARCH & CONSULTANCY
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Wednesday, 26 March 14
JOIN IN THE CLEAN COAL CASE STUDY WITH SINOPEC!
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INDONESIAN SUB-BITUMINOUS COAL SWAP FOR Q2 DELIVERY CLOSED $ 57.40 PMT W/E 21 MARCH 2014
COALspot.com – Indonesia, the world’s largest exporter of the thermal coal's swaps for delivery April - June 2014 gained this pa ...
Tuesday, 25 March 14
NEWCASTLE COAL EXPORTS JUMP 29.16% TO 2.79 MMT WEEK ON WEEK
COALspot.com: In the week ended 24 March 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, total 2.79 ...
Monday, 24 March 14
SGX'S Q2'14 CFR SOUTH CHINA COAL SWAP CLOSES SLIGHTLY HIGHER W-O-W
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries lost 1.81 percent month on month and closed at US$ 74.82 per mt as o ...
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- Sical Logistics Limited - India
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- Planning Commission, India
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- Eastern Coal Council - USA
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- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
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- Chamber of Mines of South Africa
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- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
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- Borneo Indobara - Indonesia
- LBH Netherlands Bv - Netherlands
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- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Ministry of Transport, Egypt
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- Sakthi Sugars Limited - India
- Global Coal Blending Company Limited - Australia
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
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- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Larsen & Toubro Limited - India
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
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- Meralco Power Generation, Philippines
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
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- White Energy Company Limited
- Thiess Contractors Indonesia
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- Petron Corporation, Philippines
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- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- Ministry of Mines - Canada
- Price Waterhouse Coopers - Russia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Barasentosa Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- IEA Clean Coal Centre - UK
- Bangladesh Power Developement Board
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
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- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Baiduri Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- Central Java Power - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Economic Council, Georgia
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Kobexindo Tractors - Indoneisa
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- Bhatia International Limited - India
- Tamil Nadu electricity Board
- Madhucon Powers Ltd - India
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Africa Commodities Group - South Africa
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- MS Steel International - UAE
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- Australian Coal Association
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- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- The University of Queensland
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