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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, 23 March 14
THE COAL FREIGHT RATES SEEN SLIGHTLY FIRMING UP THIS WEEK - REDDY
COALspot.com: The freight market firmed up this week. BDI was up 8.26 pct week on week and index was closed at 1599 points. The Cape index was u ...
Saturday, 22 March 14
SHIP OWNERS INVEST $15 BILLION FOR NEWBUILDINGS AND SECONDHAND VESSELS DURING FEBRUARY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners have kept on their aggressive stance in the investment scene both for newbuildings, as well as for secondhand vessels globally durin ...
Friday, 21 March 14
DRY BULK MARKET STAYS ON RECOVERY MODE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has reached new year heighs, as a result of renewed Capesize demand. The Baltic Dry Index (BDI) ended yesterday's sessio ...
Friday, 21 March 14
US COAL PRODUCTION UP 1.5%; WEST MISSISSIPPI COAL PRODUCTION DOWN 1.85% WEEK ON WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 19.0 million short tons (mmst) of coal i ...
Friday, 21 March 14
MERCURIA ANNOUNCES ACQUISITION OF J.P. MORGAN PHYSICAL COMMODITIES BUSINESS
COALspot.com: Mercuria Energy Group announced that it has reached a definitive agreement with J.P. Morgan Chase & Co. to acquire its physica ...
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- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Star Paper Mills Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
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- Mintek Dendrill Indonesia
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- Directorate General of MIneral and Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Meenaskhi Energy Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Altura Mining Limited, Indonesia
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- TeaM Sual Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
- Marubeni Corporation - India
- Coalindo Energy - Indonesia
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- CNBM International Corporation - China
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Power Finance Corporation Ltd., India
- Kaltim Prima Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Australian Coal Association
- Latin American Coal - Colombia
- IEA Clean Coal Centre - UK
- Asmin Koalindo Tuhup - Indonesia
- Planning Commission, India
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- VISA Power Limited - India
- ASAPP Information Group - India
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Economic Council, Georgia
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- SMG Consultants - Indonesia
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- Barasentosa Lestari - Indonesia
- Indika Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Merrill Lynch Commodities Europe
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Larsen & Toubro Limited - India
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Grasim Industreis Ltd - India
- Anglo American - United Kingdom
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- PTC India Limited - India
- PNOC Exploration Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
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