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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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Monday, 16 March 15
MAKING THE WORLD GO ROUND - SEABORNE TRADE! - CLARKSONS
Money, or even love if you prefer, are claimed to make the world go round. For the shipping world, however, it’s trade that sets things spinn ...
Monday, 16 March 15
API 5 FOB NEWCASTLE COAL SWAPS: DECLINED
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 2.48 per MT (-4.77%) month over month and US$ 0.93 (-1.84%) we ...
Monday, 16 March 15
CFR SOUTH CHINA THERMAL COAL SWAP DECLINED 3.74% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 2.17 (-3.74%) per MT month over month and US$ 0.67 (-1 ...
Sunday, 15 March 15
BDI DECLINED LESSER THAN 1% WEEK OVER WEEK; INDO-INDIA FIRM
COALspot.com: The most of indices, including bulk dry index were falling this week. The BDI has been down by just 0.53 points and closing at 562 po ...
Saturday, 14 March 15
CAPESIZE DRY BULKERS TO AVERAGE BETWEEN $3,000 AND $9,000/DAY IN THE COMING WEEKS SAYS BIMCO
BIMCO issued its latest short-term estimates for the dry bulk market. For March/May: BIMCO assesses that the Capesize time charter (T/C) average ra ...
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- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- McConnell Dowell - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- PTC India Limited - India
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- Renaissance Capital - South Africa
- VISA Power Limited - India
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Karaikal Port Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- Parliament of New Zealand
- Georgia Ports Authority, United States
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- South Luzon Thermal Energy Corporation
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Manunggal Multi Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- Trasteel International SA, Italy
- Iligan Light & Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Videocon Industries ltd - India
- Indian Energy Exchange, India
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- The University of Queensland
- Sindya Power Generating Company Private Ltd
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Simpson Spence & Young - Indonesia
- MS Steel International - UAE
- Aboitiz Power Corporation - Philippines
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- Lanco Infratech Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Mjunction Services Limited - India
- Latin American Coal - Colombia
- Parry Sugars Refinery, India
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Altura Mining Limited, Indonesia
- Posco Energy - South Korea
- Dalmia Cement Bharat India
- Kartika Selabumi Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining Corp, Philippines
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- White Energy Company Limited
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Kalimantan Lumbung Energi - Indonesia
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Planning Commission, India
- Chamber of Mines of South Africa
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Australian Coal Association
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
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