We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Friday, 06 February 15
SHIP DAMAGED BY FIRE CAUSED BY PIRATES FOUND TO BE CONSTRUCTIVE TOTAL LOSS - TAYLOR WESSING
 KNOWLEDGE TO ELEVATE
The High Court was asked to determine a number of preliminary issues, including whether a vessel was a constructive total loss (“CTL”), whether the claimants had lost the right to claim for a CTL by selling the vessel, and whether the claimants were entitled to an indemnity for salvage, tug hire and port expenses under a war risks policy.
Background
The first claimant was the owner of the tanker Brillante Virtuoso (the “vessel”). The vessel was insured against war risks under a policy underwritten by the defendants. The second claimant was the mortgagee of the vessel and the co-assured under the policy. The value of the vessel under the hull and machinery section of the policy was US$55 million, and a further US$22 million under the increased value section of the policy.
In July 2011, whilst en route from the Ukraine to China, the vessel (carrying a cargo of fuel oil) stopped off in Aden in order for an unarmed security team to embark ahead of their journey through the Gulf of Aden and the Indian Ocean where there is a risk of pirate attacks. However, whilst the vessel was waiting, it was in fact boarded by armed pirates who detonated an explosive device causing a fire on board and destroying a substantial proportion of machinery and equipment. The vessel subsequently became a dead ship with no power.
The crew were rescued by the US navy and the owners engaged a salvage company the same day to extinguish the fire. The owners’ consultant surveyor inspected the ship and sought quotations from shipyards in the Middle East and China for the cleaning and repairs of the vessel. He formed the opinion that the cost of repair would exceed the insured value of US$55 million. Accordingly, the owners tendered a notice of abandonment (“NOA”) to the insurers declaring the vessel a CTL. The insurers rejected the NOA.
The owners instructed shipbrokers to sell the vessel to a suitable buyer for scrap, however, the shipbrokers struggled to find a purchaser, and only managed to secure an offer of US$700,000 for the vessel. The insurers did not object to the sale at the time (in spite of being given an opportunity to do so) and the vessel was subsequently sold.
The claimants’ case was that the vessel suffered loss and damage by reason of an insured peril or perils (i.e. the acts of pirates and/or persons acting maliciously, alternatively terrorists and/or persons acting from a political motive and/or the vessel suffered loss and damage by reason of piracy, vandalism, sabotage, violent theft and/or malicious mischief).
The claimants claimed an indemnity for:
(i) a CTL;
(ii) if the vessel was not a CTL for partial loss and loss of hire and
(iii) sue and labour expenses incurred.
The insurers’ defence was that the claimants were not entitled to cover under the policy because, by delaying transit through the Gulf of Aden and/or calling at a port or place within the Gulf, the owners were in breach of the Talbot Gulf of Aden warranty which prevented vessels calling at any port or place or delaying their passage when transiting and/or the owners were in breach of the warranty by failing to apply Best Management Practices to Deter Piracy. The claimants denied this allegation.
Issues examined by the Court
Was the vessel a Constructive Total Loss?
The Court analysed the law on CTL and, in particular, examined section 60(2)(ii) of the Marine Insurance Act 1906 which states that a vessel is a CTL “where she is so damaged by a peril insured against that the cost of repairing the damage would exceed the value of the ship when repaired.” Clause 19 of the Institute Time Clauses-Hulls also qualifies this further by stating:
“The measure of indemnity in respect of claims for unrepaired damage shall be the reasonable depreciation in the market value of the Vessel at the time this insurance terminates arising from such unrepaired damage, but not exceeding the reasonable cost of repairs…”
The Court held that in order to succeed in establishing that the vessel was a CTL, the claimants had to prove that the cost of repairing the vessel would have exceeded the insured value of US$55 million.
The Court held that in assessing the costs of repair to the vessel, the question to be asked is what a prudent uninsured shipowner in the position of the claimants would have done in deciding whether or not to repair the vessel, and where and how the repair should be carried out.
The Court acknowledged that in this case, it was not possible to determine with complete accuracy the actual extent of damage to the vessel. In cases such as this, where matters cannot be determined with precision, the Court has to apply a “large margin” to any repair estimate. The Court recognised that a margin of error has to be applied in relation to the extent of the damage where it was not possible to investigate fully and the assessment of the cost of repair has to take account of the fact that the items which were not opened up and tested might well have required replacement, so that a prudent uninsured owner would have replaced them.
Where should the repairs have been carried out?
The Court also held that whilst cost is an important factor in determining where the prudent uninsured owner would have carried out the repairs, it is not determinative. Accordingly, the Court considered that the prudent uninsured owner would consider all the other factors which might well make the closer (whilst more expensive) yard the proper and appropriate place for repair. Hence, the Court considered that the prudent uninsured owner would have favoured repair in these circumstances in Dubai rather than China, even though the quotations for repairs in China were much lower than in the Middle East. Accordingly, the Court found that the vessel was a CTL.
Had the owners lost the right to claim for CTL by selling the vessel?
The Court held that the owners had not lost the right to claim for a CTL by selling the vessel, as the insurers were well aware throughout that the owners were proposing to sell the vessel and did not object to it. By selling the vessel, the owners were acting in the interests of both themselves and the insurers.
Sue and labour costs
In considering whether an indemnity was payable to the claimants for expenditure in relation to the costs of salvage, tugs and agency fees, the Court disagreed with the insurers’ case that once the vessel had been redelivered by the salvors, any insured peril which had been operating (e.g. violent theft, piracy, vandalism, sabotage and malicious mischief) ceased to operate. The Court found that until the vessel was in a place of safety, the insured peril continued to operate, even after redelivery by the salvors. The Court also held that the cost of the standby tugs and the associated agency expenses were incurred not only for the benefit of the owners, but for the benefit of the insurers, so that they were recoverable as sue and labour expenses.
However, the Court agreed with the insurers that the entitlement to recover sue and labour expenses ceased once the claim form was issued. The Court applied the decision in Kuwait Airways v Kuwait Insurance2 that the issue of the claim form (or writ) crystallises the rights and obligations of the parties to the contract of insurance, so that the relations between the parties are thereafter governed by the Civil Procedure Rules, rather than the contract of insurance. Hence the duty of utmost good faith ceases once proceedings are issued and sue and labour expenses incurred in that period are not recoverable as they were incurred solely for the owner’s benefit.
Source: Taylor Wessing Hellenic Shipping
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Friday, 13 March 15
U.S. COAL PRODUCTION UP 2.3% WEEK OVER WEEK
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.5 million short tons (mmst) of coal ...
Friday, 13 March 15
ADARO RECORDED A 7% INCREASE IN EBITDA OF $877 MILLION IN 2014
“Coal market continues to be difficult and challenging” – Adaro Energy
The world’s Top 5 thermal coal exporter, ...
Thursday, 12 March 15
CAPESIZE : ACTIVITY IS LOW; PANAMAX: BIT MORE ACTIVITY; HANDY: A FIRMING WEEK
Handy
It has been a firming week in both hemispheres this week and especially in the Pacific, says Fearnleys AS in its week's week report.
...
Thursday, 12 March 15
COAL MINERS REMAIN UNDER PRESSURE AS GLUT CONTINUES - THE JAKARTA POST
Indonesia’s major coal miners reported a significant drop in their earnings last year as the sharp drop in the global demand, mainly from Chi ...
Thursday, 12 March 15
FOB INDONESIA COAL SWAP DROP TO $47.33 A TON IN THE WEEK ENDED MAR.6
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 drop month on month and week over week.
The Q2 swap fell US$ 0.37 (0.78%) month ...
|
|
|
Showing 3141 to 3145 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- ASAPP Information Group - India
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- The University of Queensland
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- SMC Global Power, Philippines
- CNBM International Corporation - China
- VISA Power Limited - India
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- PNOC Exploration Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Holcim Trading Pte Ltd - Singapore
- GAC Shipping (India) Pvt Ltd
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- Electricity Authority, New Zealand
- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- PTC India Limited - India
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Thiess Contractors Indonesia
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Bulk Trading Sa - Switzerland
- Wood Mackenzie - Singapore
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Madhucon Powers Ltd - India
- Uttam Galva Steels Limited - India
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- Orica Australia Pty. Ltd.
- Altura Mining Limited, Indonesia
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- Georgia Ports Authority, United States
- Jaiprakash Power Ventures ltd
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Planning Commission, India
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- Coal and Oil Company - UAE
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Larsen & Toubro Limited - India
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- The State Trading Corporation of India Ltd
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- India Bulls Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- Grasim Industreis Ltd - India
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Latin American Coal - Colombia
- White Energy Company Limited
- Indogreen Group - Indonesia
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Coalindo Energy - Indonesia
|
| |
| |
|
