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Thursday, 30 October 14
DOES A LOU ARBITRATION AGREEMENT FOR THE UNDERLYING CARGO CLAIM COMPLETELY REPLACE THE BILL OF LADING ARBITRATION CLAUSE? - INCE &CO
 KNOWLEDGE TO ELEVATE
In the context of cargo claims brought under four bills of lading, the Commercial Court has recently considered whether an arbitration provision in a Club Letter of Undertaking (LOU) had entirely replaced the arbitration agreement in the bills of lading. If it had not, the Cargo Interests may have been faced with a time bar argument in respect of some of their claims. Luckily for them, the Court found in their favour.
The background facts
The dispute arose out of a shipment of a cargo of bagged rice from Thailand to Nigeria pursuant to four Congenbill 1994 bills of lading.
There was a head time charterparty, a sub-trip time charterparty and a sub-sub voyage charterparty. The first two charterparties provided for LMAA arbitration in London, with the LMAA Small Claims Procedure (SCP) to apply to claims of less than US$100,000. The sub-sub voyage charterparty provided for Singapore arbitration. All three charterparties were governed by English law. Each bill of lading incorporated the “Law and Arbitration Clause” of the “Charterparty, dated as overleaf”, but no charterparty was actually identified (by date).
Cargo damage was alleged upon discharge, and the Cargo Interests sought security from the Owners for their claims under the bills of lading. The Owners’ P&I Club issued a LOU which, among other things, confirmed the Owners’ agreement that the Cargo Interests’ claims (to which the LOU would respond if they succeeded) would be referred to LMAA arbitration in London before three arbitrators and that English Law would apply (including the Hague-Visby Rules and the English Carriage of Goods By Sea Act 1992). The Cargo Interests commenced arbitration under the standard LMAA Terms, but no references were made under the SCP.
The Owners argued that the commencement of arbitration was invalid because the Cargo Interests should have commenced four separate arbitrations (not one) of which some should have been under the SCP (before a sole arbitrator) because the claim values under some of the bills of lading were apparently less than US$100,000; and so the arbitrators had no jurisdiction to decide the claims in this arbitration (and the Cargo Interests were time-barred from commencing new arbitration proceedings to correct this). The Owners argued this on the basis that (1) the head time charterparty’s law and jurisdiction provisions had been incorporated into the bills of lading; and (2) its SCP provision for claims for less than US$100,000 survived the LOU – which amended the bills of lading’s arbitration provision in some limited respects but left the SCP provision intact.
The Cargo Interests argued that the LOU’s arbitration provision had replaced the bills of ladings’ arbitration provision entirely.
The Tribunal’s decision
The majority arbitrators held that they had jurisdiction to hear a bill of lading claim for more than US$100,000, but (as the Owners were arguing) no jurisdiction to hear a claim for less than this sum. That said, they could not say which claims they could hear because the Cargo Interests had not set out the claim amount under each bill of lading.
The minority arbitrator held that the Tribunal had jurisdiction to decide all of the bill of lading claims (as the Cargo Interests were arguing).
The Commercial Court decision
The Court agreed with the Cargo Interests that the LOU’s arbitration provision had replaced the bills of lading’s arbitration provision entirely such that the arbitration had been validly commenced. The Court’s reasoning was as follows:
There was no reason in principle why this should not be the case, and the authorities relied upon by the Owners to the contrary did not directly apply here. The LOU’s arbitration provision operated comfortably as a new and free-standing agreement which was comprehensive – dealing with the (London) seat of the arbitration; the (LMAA Terms) arbitration procedure; the number of arbitrators (three, appointed in the usual way); the time for appointing the second arbitrator (14 days); and the law governing the dispute (English law, including the Hague-Visby Rules and the Carriage of Goods by Sea Act 1992).
This was also the natural meaning of the LOU’s arbitration provision.
With this in mind, there was no apparent reason why the parties should not have intended this. On the contrary, there were good reasons why they should:
the arbitration agreement would in this way be found in one document (the LOU) rather than two (the LOU and the bill of lading/head charterparty clause);
the parties knew that some of the modest claims would be less than US$100,000 and would therefore have mentioned the SCP in the LOU if they intended it to apply;
it made no sense for them to have been agreeing to four arbitrations under different LMAA procedures; and
it was in fact arguable that the voyage charterparty’s Singapore arbitration provision actually applied instead of the head charterparty’s London/SCP arbitration provision – as to which any dispute was removed if the LOU’s arbitration provision replaced it entirely.
Comment
The Court would seem to have made a common-sense decision giving effect to the words used in the LOU and, apparently, to what the parties would have intended.
Whilst not relevant to the decision reached, the Court’s comment in passing that the Owners “may well be right”, subject to some scope for disagreement, that the head time charterparty’s arbitration provision would initially have been incorporated into the bills of lading (rather than the voyage charterparty’s arbitration provision) might be questioned in future cases; there is both textbook authority and case law to the effect that if there is a sub-voyage charterparty, the arbitration provision in that sub-charterparty (not that of the head time charterparty) is incorporated into the bill of lading, consistent with the bill of lading’s phrase “freight payable as per cp dated ”.
Source: INCE &Co / Hellenic Shipping News
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Friday, 02 August 24
COAL MARKET DEVELOPMENTS: FALLING PRICES AMID RECORD-HIGH OUTPUT - WORLD BANK
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Tuesday, 02 July 24
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- Grasim Industreis Ltd - India
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- GVK Power & Infra Limited - India
- Attock Cement Pakistan Limited
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- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
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- Eastern Energy - Thailand
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- Tata Chemicals Ltd - India
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- Indo Tambangraya Megah - Indonesia
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- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
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- Goldman Sachs - Singapore
- Ministry of Mines - Canada
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- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Anglo American - United Kingdom
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- Siam City Cement - Thailand
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Romanian Commodities Exchange
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- Bhushan Steel Limited - India
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- Videocon Industries ltd - India
- Latin American Coal - Colombia
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- Altura Mining Limited, Indonesia
- Bhatia International Limited - India
- Holcim Trading Pte Ltd - Singapore
- Sical Logistics Limited - India
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- The University of Queensland
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Kaltim Prima Coal - Indonesia
- Global Business Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Kideco Jaya Agung - Indonesia
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Semirara Mining and Power Corporation, Philippines
- Electricity Authority, New Zealand
- Economic Council, Georgia
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Chamber of Mines of South Africa
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- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- VISA Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
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- Interocean Group of Companies - India
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- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Tamil Nadu electricity Board
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- Orica Mining Services - Indonesia
- White Energy Company Limited
- Pipit Mutiara Jaya. PT, Indonesia
- PTC India Limited - India
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Africa Commodities Group - South Africa
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
- Marubeni Corporation - India
- OPG Power Generation Pvt Ltd - India
- The Treasury - Australian Government
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
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