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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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Thursday, 20 February 14
SUPRAMAX: IN ASIA IS IMPROVING SIGNIFICANTLY AND TURNED FROM APS TO DOP MARKET
Handy
The activity is back in the market after Chinese holidays. Supramax in Asia is improving significantly and turned from APS to DOP market. We ...
Wednesday, 19 February 14
NEWCASTLE PORT SHIPPED 30% MORE COAL WEEK ON WEEK
COALspot.com: In the week ended 17 February 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled ...
Tuesday, 18 February 14
PERUVIAN HIGH COMMISSIONER FOR MINING AFFAIRS WILL BE KEY NOTE SPEAKER AT THE COLOMBIAN COAL CONFERENCE 2014
Press Release: The High Commissioner for Mining Affairs in the Presidency of the Peruvian Council of Ministers, General (R) Daniel Urresti Elera, ha ...
Monday, 17 February 14
US COAL PRODUCTION IN 2013 FELL TO ITS LOWEST LEVEL IN 20 YEARS
COALspot.com: U.S coal production for 2013 totaled an estimated 996 million short tons (MMst), 21 MMst (2%) lower than in 2012. It is the first time ...
Monday, 17 February 14
Q1 2015 COAL SWAPS CLOSED $ 2.21 HIGHER THAN Q2 2014 SWAPS
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 delivery lost 3.16 percent month on month and closed at US$ 76.12 per mt as o ...
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- Australian Coal Association
- Uttam Galva Steels Limited - India
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- Madhucon Powers Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
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- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
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- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
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- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
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- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Neyveli Lignite Corporation Ltd, - India
- White Energy Company Limited
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- Economic Council, Georgia
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- Global Business Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Mercator Lines Limited - India
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Lanco Infratech Ltd - India
- Karaikal Port Pvt Ltd - India
- Petron Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- Ministry of Transport, Egypt
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- Romanian Commodities Exchange
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- Kumho Petrochemical, South Korea
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Sindya Power Generating Company Private Ltd
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- Ministry of Finance - Indonesia
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- The Treasury - Australian Government
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- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
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- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Altura Mining Limited, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- Indonesian Coal Mining Association
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
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- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Energy Development Corp, Philippines
- Planning Commission, India
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- PTC India Limited - India
- Wood Mackenzie - Singapore
- Semirara Mining Corp, Philippines
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- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- The University of Queensland
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- Interocean Group of Companies - India
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- MS Steel International - UAE
- Bhushan Steel Limited - India
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Edison Trading Spa - Italy
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
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- Africa Commodities Group - South Africa
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
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- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
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