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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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Wednesday, 11 March 15
RICHARDS BAY COAL SWAPS DROP $ 3.65 - 4.0/T W-O-W
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month and week on week.
The Q2 swap has fell US$ ...
Wednesday, 11 March 15
DRY BULK MARKET CLOSED OFF ON THE GREEN FOR A SECOND WEEK IN A ROW - INTERMODAL
COALspot.com: The Dry Bulk market closed off on the green for a second week in a row, while the performance of Capesizes hindered a more substantia ...
Wednesday, 11 March 15
MARKET INSIGHT : NEWBUILDINGS - PANOS TSILINGIRIS
From a cost-based, buy-low perspective, there is currently a buying opportunity in the second-hand dry bulk market. I am an anti-cyclical (buy-low) ...
Wednesday, 11 March 15
DRY BULK MARKET: ALL IS NOT LOST FOR A RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The low cost of commodities across the board could trigger an increase of trade among many countries, which in turn could lead to a recovery of the ...
Wednesday, 11 March 15
U.S. ELECTRIC GENERATING COMPANIES TO ADD MORE THAN 20 GW OF GENERATING CAPACITY IN 2015; 16 GW OF GENERATING CAPACITY IS EXPECTED TO RETIRE IN 2015
COALspot.com: In 2015, electric generating companies in U.S. expect to add more than 20 gigawatts (GW) of utility-scale generating capacity to the ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Price Waterhouse Coopers - Russia
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Antam Resourcindo - Indonesia
- India Bulls Power Limited - India
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- European Bulk Services B.V. - Netherlands
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- AsiaOL BioFuels Corp., Philippines
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Parliament of New Zealand
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- Altura Mining Limited, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- Eastern Coal Council - USA
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- SMG Consultants - Indonesia
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
- PowerSource Philippines DevCo
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- Agrawal Coal Company - India
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Ambuja Cements Ltd - India
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- The State Trading Corporation of India Ltd
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Tata Chemicals Ltd - India
- Mercuria Energy - Indonesia
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Jaiprakash Power Ventures ltd
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