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, 20 February 15
U.S. PRODUCED AROUND 19.2 MILLION SHORT TONS OF COAL WEEK ON WEEK
COALspot.com – United States the world's one of the largest coal producers, produced approximately 19.2 million short tons (mmst) of coal ...
Thursday, 19 February 15
PANAMAX: NOPAC AND AUSSIE ROUNDS ARE DONE IN LOW/MID $ 4000; TRIPS VIA INDONESIA TO INDIA CLOSER TO THE $5000 MARK - FEARNLEYS
Handy
The handy and supra market has not seen any firming rates in front of the Chinese New Year and still suffering on low activity in both hemi ...
Wednesday, 18 February 15
DRY BULK SHIPPING TO RECOVER IN LATE 2015 - DREWRY MARITIME RESEARCH
Strong trade growth, moderating fleet development and deployment of new fuel efficient vessels are expected to lead to a recovery in dry bulk shipp ...
Tuesday, 17 February 15
WHO PAYS THE SUEZ CANAL FEES? - INCE & CO
KNOWLEDGE TO ELEVATE
This was an appeal from an arbitration award on a point of construction in relation to the wording of an addendum to a ch ...
Tuesday, 17 February 15
BUOYANT WAVES IN RECENT YEARS: GLOBAL SHIP INVESTMENT SINCE THE CRASH - HELLENIC SHIPPING NEWS
Anxiety about fleet expansion is a recurring feature of world shipping markets. Within the global maritime community, worries about the vast amount ...
|
|
|
Showing 3186 to 3190 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Kideco Jaya Agung - Indonesia
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- Ambuja Cements Ltd - India
- Mjunction Services Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Maheswari Brothers Coal Limited - India
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining Corp, Philippines
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- Sical Logistics Limited - India
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Kobexindo Tractors - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Bhatia International Limited - India
- Aditya Birla Group - India
- Altura Mining Limited, Indonesia
- PNOC Exploration Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Standard Chartered Bank - UAE
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- White Energy Company Limited
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- Sindya Power Generating Company Private Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Minerals Council of Australia
- Coastal Gujarat Power Limited - India
- Intertek Mineral Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
|
| |
| |
|
