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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 charterparty.
The Commercial Court held that the costs of transiting the Suez Canal arising as a result of amended voyage orders were for the Charterers’ account, even though the Disponent Owners would have had to incur them anyway in order to redeliver the vessel.
The background facts
The Claimant Disponent Owners (“Owners”), chartered the vessel to the Respondents for a voyage from Constanza to Djibouti. The vessel arrived at Djibouti but was unable to discharge because there were no receivers for the cargo. After the vessel had spent three months off Djibouti, the Owners and the Charterers agreed an addendum (“addendum no. 1″) to the charterparty whereby the discharge port was changed to Ain Sukhna, Egypt, a port to the south of the Suez Canal.
Addendum no. 1 provided:
“Owners and Headowners to be held harmless and indemnified against all losses, expenses, damages, risk whatsoever and howsoever arising including but not limited to those which may arise from any 3rd party including but not limited to Egyptian authority’s rejection refusal or inability to accept delivery of the cargo or from charterer’s failure to discharge cargo.”
Later, by a further addendum (“addendum no. 2″), the discharge port was changed again from Ain Sukhna to Damietta, an Egyptian port on the Mediterranean coast, meaning that the vessel would have to transit the Suez Canal northbound in order to arrive at the discharge port. Materially, addendum no. 2 provided:
“…the cargo is to be discharged at the port of Damietta (Egypt) instead of Ain Sukhna (Egypt) and all other terms, conditions, clauses and paragraphs as per Charter Party dated 23 October 2009 and addendum no. 1 and reservations of rights to remain in force.”
Under the head charterparty, a time trip charter, the Owners had to re-deliver the vessel at Port Said after completion of the voyage. She would, therefore, have had to transit the Suez Canal irrespective of the change of discharge port under addendum no. 2. The head charterparty provided that the Owners (as charterers under that charter) were responsible for all canal tolls and, therefore, as between them and the registered Owners, would have to bear the costs of transiting the Suez Canal.
In the arbitration, the Tribunal held that the costs of transiting the Suez Canal were not an expense that the Charterers had agreed to bear in the addenda on the basis that the Owners would have had to transit the Suez Canal anyway and:
“in the context, “losses” or “expenses” [in addendum no. 1, as cited above] must be construed as limited to additional losses and expenses which would not have been incurred in any event.”
It was this finding that was the subject of the Owners’ appeal.
The Commercial Court decision
The Court found that the commercial aim of the addenda had been to allow the Charterers to bring the voyage (and therefore their liability to pay demurrage) to an end and to allow the Owners to discharge the cargo and redeliver the vessel. The Court considered both the commercial objectives of the parties and their background knowledge when they agreed the addenda. The Court noted that the Owners’ liability under the head charterparty to bear the costs of transiting the Suez Canal was not within the knowledge of the Charterers and should not therefore be taken into account when assessing the scope of the Charterers’ indemnity.
Given the Court’s finding on the facts, the question which it had to answer was simply whether the expense of transiting the Suez Canal arose from the Charterers’ failure to discharge the cargo at Djibouti. The Court found that the Suez Canal transit would not have been required in order to perform the original voyage to Djibouti but was required to perform the amended voyage to Damietta and, as such, the costs of the transit were ones that the Charterers had agreed to bear. The appeal was therefore allowed.
Comment
This judgment shows the Court applying the clear wording used by the parties, since the expense arose from the Charterers’ failure to discharge the cargo at Djibouti, and that is what was expressly covered by the indemnity. The decision also emphasises that the background knowledge against which contracts will be interpreted is limited to that knowledge available to both parties.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Source: Ince & Co | Hellenic Shipping News
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Thursday, 19 March 15
HANDY: INDO COAL CARGOS DESTINED FOR INDIA BEING FIXED IN REGION OF $ 7-8K - FEARNLEYS
Handy
The Handy and Supra market has had a week with mixed signals. Although we see more activity in both hemispheres the rates are only up about ...
Thursday, 19 March 15
INDONESIAN COAL BENCHMARK SOAR 7.69% IN MARCH....!!!
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised up Indonesian coal benchmark prices to US$ 67.76 per MT in March ...
Wednesday, 18 March 15
AVERAGE RATE FOR CAPES MOVED TO BELOW $ 4K/DAY LAST WEEK - INTERMODAL
COALspot.com: The even heavier losses noted in the Capesize segment last week, denied the Dry Bulk market a third weekly positive, while the smalle ...
Wednesday, 18 March 15
PARKING THE CAPES - LINOS KOGEVINAS
It is no secret that recent times have been anything but kind towards shipping, and no sector has suffered more lately than the dry bulk one. While ...
Wednesday, 18 March 15
CHINA-OWNED SHIPS: A RAPID RISE TO BECOME ONE OF THE WORLD'S LARGEST FLEETS - RICHARD SCOTT
Ships operated by owners based in China have become increasingly prominent on the world’s sea routes. China-owned container ships, bulk carri ...
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- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- Bayan Resources Tbk. - Indonesia
- Chamber of Mines of South Africa
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- AsiaOL BioFuels Corp., Philippines
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Heidelberg Cement - Germany
- Star Paper Mills Limited - India
- Latin American Coal - Colombia
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- GMR Energy Limited - India
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Economic Council, Georgia
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Parliament of New Zealand
- London Commodity Brokers - England
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- Larsen & Toubro Limited - India
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- Eastern Energy - Thailand
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Aboitiz Power Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Minerals Council of Australia
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- MS Steel International - UAE
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- Singapore Mercantile Exchange
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Aditya Birla Group - India
- Planning Commission, India
- Thai Mozambique Logistica
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