We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Tuesday, 13 January 15
MORE PITFALLS FOR OWNERS LOOKING TO TERMINATE FOR UNPAID HIRE - INCE & CO
 KNOWLEDGE TO ELEVATE
It is a debatable point whether or not the obligation to pay hire under a time charter is a condition of the contract or not, notwithstanding the obiter comments of Mr Justice Flaux in the Astra [2013] EWHC 865 (see the Shipping E-Brief July 2013). Making payment under a commercial contract is said to be “not of the essence of the contract” and therefore not a condition. The significance is that a breach of condition allows the innocent party to terminate the contract in addition to claiming damages. Otherwise, he may be limited to his damages claim but unable to terminate the contract unless the failure to make payment, or indeed making repeated late payment under an instalment contract, amounts to a repudiatory breach of the contract.
The traditional view is that, in order to terminate a time charter and claim damages for losses suffered following a failure to pay hire, the charterer’s conduct must be shown to be
(i) repudiatory in the sense that the breach deprives the owner of substantially the whole benefit of the charter; and/or
(ii) renunciatory in the sense that it evinces an intention on the charterer’s part no longer to perform the charter at all or to perform the charter in a manner substantially inconsistent with his contractual obligations.
It will very much depend on the facts and circumstances in any given case whether the non-payment or late payment of hire instalments under a time charter amounts to a repudiatory breach. This often requires the owner to make a difficult decision as to whether the charterer’s failure to pay a number of hire instalments, or paying them late, entitles him, the owner, to terminate the charter. If the owner “calls it wrong”, he can find himself in repudiatory breach for wrongful termination and facing a claim for damages from the charterer.
Januzaj v. Valilas is not a shipping case but deals with general principles concerning the law on repudiation. It arguably introduces a further potential pitfall for owners seeking to rely on multiple failures to pay hire, or repeated late payments of hire, in order to demonstrate repudiatory conduct on the part of a charterer.
The background facts
The Claimant was a dentist operating his practice from the Defendant’s premises. The Claimant had agreed to pay the Defendant half his earnings from his practice in return for use of the premises. The Claimant’s earnings came from the UK’s National Health Service (the “NHS”) under an arrangement whereby the Claimant was paid in advance in equal monthly instalments for his work. If, at the end of the year, the Claimant had not done sufficient work, then any over-payment of his advance earnings had to be refunded to the NHS.
A dispute arose between the Claimant and Defendant, as a result of which the Claimant stopped any further payments to the Defendant. The Claimant was particularly concerned that the Defendant would not return his half of any advance payments if a refund became due to the NHS. The Claimant failed to make three monthly payments to the Defendant between August and October. In November, the Defendant terminated the agreement on the basis of the Claimant’s repudiatory breach of contract.
The Court decisions
At first instance, the Court found that the agreement had been terminated wrongfully and awarded the Claimant damages. The majority of the Court of Appeal upheld this decision on the basis that, on the facts, the Defendant should have been aware that the Claimant was only intending to pay late as opposed to evincing an intention not to pay at all. By contrast, the dissenting judgment concluded that the failure to make three payments in a row was a repudiatory breach.
In the context of time charter hire disputes
The onus will be on an owner to demonstrate that he has been deprived of substantially the whole benefit of his time charter and/or that the charterer does not intend to make any further hire payments in the future. Furthermore, The Brimnes [1972] 2 Lloyd’s Rep. 465 made it clear that even persistent late payment of hire instalments will not necessarily amount to a repudiation of the charter.
One of the majority appeal judges in Januzaj v. Valilas suggested that, in determining whether the number of missed or late payments was repudiatory, regard had to be given to the length of the contract as a whole. There is, however, previous case law to the effect that, in deciding whether repeated late payments are repudiatory, it will not simply be a question of looking at the number of payment instalments required over the whole of the contractual period and comparing that number with the number of occasions on which payment has not been made or has been made late. It is also necessary to look at the type of contract in question.
Januzaj v. Valilas was very much decided on its own facts. In that case, the dentist who missed three monthly payments had, in previous years, always managed to complete the requisite amount of work he had to perform for the NHS over the course of the year and so no refund to the NHS had ever been necessary. The majority of the Court of Appeal concluded that the Defendant should, therefore, have known that the Claimant would complete all his NHS work in the relevant year also, so that no refund would have been required and the Claimant would eventually have paid the Defendant all that was owing to him, albeit somewhat late. That was not sufficient to amount to repudiatory conduct.
In a time charter context, however, and in a challenging economic climate, it will often not be at all clear to an owner that he will eventually get his money, albeit late. Charterers may be on the brink of insolvency and may be looking to negotiate a reduced hire rate rather than comply with their original contractual obligations. There may also be a history of repeated defaults on the part of the charterer that can render his behaviour repudiatory as a whole. Nonetheless, Januzaj v. Valilas gives an owner faced with a defaulting charterer some cause for concern that he will be jumping the gun if he chooses to terminate where a charterer has missed a few hire payments. Is it relevant to consider the length of the charter when deciding whether several unpaid instalments is repudiatory? Are those payments just late or is the charterer not going to pay at all?
Comment
Given the Court of Appeal decision in Januzaj v. Valilas, an owner will need to be cautious about terminating for late payments of hire and there remains uncertainty over exactly how many non-payments will be sufficient to justify a decision by the owner to terminate the charter. Defaulting charterers often suggest to owners that they intend to pay outstanding hire in the future. Such a defaulting charterer, faced with an owner who chooses to terminate the charter as a result, may now argue that the outstanding payments were merely late or that only a few non-payments of hire in the context of a long-term charter is not repudiatory.
Source: INCE&Co | Hellenic Shipping News
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Tuesday, 30 December 14
U.S WEEKLY COAL PRODUCTION ALMOST FLAT AT -0.2%
COALspot.com – United States the world's one of the largest coal producers, produced approximately 19.8 million short tons (mmst) of coal ...
Monday, 29 December 14
CHINESE COAL IMPORTS: REGULATORY RISKS? - CLARKSONS
In recent years, Chinese seaborne coal imports have surged, registering average growth of 67% p.a. between 2009 and 2013 to total 265mt. However, t ...
Monday, 29 December 14
BULK MARKET ENDS YEAR ON SOUR NOTE, SHIPBROKER SEES 'BUMPY ROAD AHEAD' - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
2014 was supposed to be the year that the dry bulk market would stage a comeback and a sustainable one for that matter. However, while for the most ...
Monday, 29 December 14
Q1'15 CFR SOUTH CHINA COAL SWAP CLOSED AT $59.42
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased by US$ 3.51 (-5.58%) month over month and US$ 0.08 (-0.13%) ...
Monday, 29 December 14
SGX'S FOB NEWCASTLE COAL SWAPS IMPROVED W-O-W, LOST M-O-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery lost US$ 1.44 per MT (-2.73%) month over month and gained US$ 0.36 (+0.71%) ...
|
|
|
Showing 3286 to 3290 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Semirara Mining and Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Commonwealth Bank - Australia
- Siam City Cement - Thailand
- Kartika Selabumi Mining - Indonesia
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Africa Commodities Group - South Africa
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- Grasim Industreis Ltd - India
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- Globalindo Alam Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- Metalloyd Limited - United Kingdom
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Power Finance Corporation Ltd., India
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Bharathi Cement Corporation - India
- Global Green Power PLC Corporation, Philippines
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Ind-Barath Power Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- San Jose City I Power Corp, Philippines
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- Independent Power Producers Association of India
- Maheswari Brothers Coal Limited - India
- Pendopo Energi Batubara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- Krishnapatnam Port Company Ltd. - India
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- PTC India Limited - India
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- Posco Energy - South Korea
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- Sarangani Energy Corporation, Philippines
- Energy Development Corp, Philippines
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Formosa Plastics Group - Taiwan
- Vedanta Resources Plc - India
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- The University of Queensland
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Electricity Authority, New Zealand
- Mercuria Energy - Indonesia
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- Planning Commission, India
- Gujarat Sidhee Cement - India
- Karbindo Abesyapradhi - Indoneisa
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Attock Cement Pakistan Limited
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Salva Resources Pvt Ltd - India
|
| |
| |
|
