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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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Wednesday, 12 June 24
CHINA ACCOUNTS FOR 16.3% OF AUSTRALIA'S COAL EXPORTS, FOLLOWED BY INDIA 14.4% - BANCHERO COSTA
Global coal trade has really picked up pace in recent months, and is now fully back to pre-Covid levels says Banchero Costa in its latest report.
...
Wednesday, 12 June 24
LNG NEWBUILDING VALUES AT RECORD HIGH: 78 NEWBUILD ORDERS PLACED IN 2024, DOUBLING 2023 - VESON NAUTICAL
The number of LNG newbuilding orders have more than doubled from the same period last year where 34 orders were placed, compared to 78 in the first ...
Monday, 10 June 24
CHINA'S MAY COAL IMPORTS RISE 11% ON LOWER DOMESTIC OUTPUT - REUTERS
China’s imports of coal rose 11% in May from a year earlier, customs data and Reuters records showed on Friday, as lower domestic output this ...
Tuesday, 04 June 24
HOW DO WESTERN SANCTIONS ON RUSSIA IMPACT THE GLOBAL METALS, MINING AND COAL MARKETS - WOOD MACKENZIE
The geopolitical landscape for Russia, as a major supplier of various commodities, has undergone a dramatic transformation since the invasion of Uk ...
Friday, 22 March 24
CASE STUDY: DANGERS OF COAL CARGO - SKULD
Recently, a bulk cargo vessel carrying coal from South Africa to Singapore suffered a fatal accident, resulting in the deaths of three crew members ...
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Showing 21 to 25 news of total 6871 |
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- Petron Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Economic Council, Georgia
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Energy Link Ltd, New Zealand
- Africa Commodities Group - South Africa
- Power Finance Corporation Ltd., India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- Jindal Steel & Power Ltd - India
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Rio Tinto Coal - Australia
- Sarangani Energy Corporation, Philippines
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Trasteel International SA, Italy
- Wilmar Investment Holdings
- SN Aboitiz Power Inc, Philippines
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Medco Energi Mining Internasional
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- MS Steel International - UAE
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- Australian Coal Association
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- PTC India Limited - India
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- Grasim Industreis Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Indian Oil Corporation Limited
- Central Electricity Authority - India
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Videocon Industries ltd - India
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Sical Logistics Limited - India
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Ministry of Mines - Canada
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Indian Energy Exchange, India
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- White Energy Company Limited
- London Commodity Brokers - England
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- Simpson Spence & Young - Indonesia
- India Bulls Power Limited - India
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Thiess Contractors Indonesia
- Planning Commission, India
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Kideco Jaya Agung - Indonesia
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
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