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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, 22 March 24
INDONESIA APPROVES 922.14 MLN T COAL PRODUCTION QUOTA FOR 2024, ABOVE TARGET - REUTERS
Indonesia has approved coal production quotas totalling 922.14 million metric tons for 2024, Bambang Suswantono, a senior official at the mining mi ...
Friday, 22 March 24
CHINA COAL INDUSTRY GROUP EXPECTS OUTPUT GROWTH TO SLOW IN 2024 - REUTERS
China’s coal output is expected to increase 36 million metric tons, or 0.8%, to about 4.7 billion tonnes in 2024, a Chinese coal industry gro ...
Monday, 18 March 24
THREE KEY TAKEAWAYS FROM OUR EUROPE GAS MARKETS SHORT-TERM OUTLOOK Q1 2024 - WOOD MACKENZIE
European gas prices are currently back to pre-crisis levels, but with a complex series of factors affecting future supply and demand, are they set ...
Wednesday, 06 March 24
INDONESIA AIMS TO FINISH MINING OUTPUT QUOTAS APPROVAL BY END-MARCH, OFFICIAL SAYS - REUTERS
Indonesia’s has approved the mining production quotarequests from more than 120mineral companies and aims to complete the approval process th ...
Monday, 04 March 24
IS YOUR GUARANTEE A GUARANTEE? NOTE TO SHIPOWNERS - GARD
KNOWLEDGE TO ELEVATE
The law of guarantees is not always obvious or easy to understand without proper guidance. This article clarifies the dif ...
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Showing 26 to 30 news of total 6871 |
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- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
- PTC India Limited - India
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- Anglo American - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Africa Commodities Group - South Africa
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Riau Bara Harum - Indonesia
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Australian Coal Association
- VISA Power Limited - India
- Heidelberg Cement - Germany
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Thiess Contractors Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- Indonesian Coal Mining Association
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- PowerSource Philippines DevCo
- The University of Queensland
- Makarim & Taira - Indonesia
- Kaltim Prima Coal - Indonesia
- Vedanta Resources Plc - India
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- Wood Mackenzie - Singapore
- Interocean Group of Companies - India
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- Planning Commission, India
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- Coastal Gujarat Power Limited - India
- MS Steel International - UAE
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- Indogreen Group - Indonesia
- Indian Oil Corporation Limited
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- Kumho Petrochemical, South Korea
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Kalimantan Lumbung Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Lanco Infratech Ltd - India
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- London Commodity Brokers - England
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- The Treasury - Australian Government
- Bangladesh Power Developement Board
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Marubeni Corporation - India
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- GVK Power & Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
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