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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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Tuesday, 10 March 15
OIL PRICE FORECASTING - IGNORE THE EXPERTS: COLIN MARSHALL
KNOWLEDGE TO ELEVATE
Experts put themselves on a pedestal, making claims to have special forecasting abilities for oil price trends. They, too ...
Tuesday, 10 March 15
FOB NEWCASTLE COAL SWAPS HEADING SOUTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 0.24 per MT (-0.47%) month over month and US$ 1.52 (-2.93%) we ...
Tuesday, 10 March 15
CFR SOUTH CHINA POWER-STATION COAL SWAPS DECLINE
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery fell US$ 0.42 (-0.74%) per MT month over month and declined US$ 1.00 &nbs ...
Monday, 09 March 15
INDONESIA GREETS INDIA RATE CUT AS GOOD FOR EXPORTS - GLOBEASIA
Indonesian commodity producers and economists have hailed the Indian central bank’s rate cut as good for boosting exports from Southeast Asia ...
Monday, 09 March 15
CHINA'S SUPREME COURT ISSUES NEW JUDICIAL INTERPRETATION ON SHIP ARREST AND JUDICIAL SALE OF SHIPS - GARD
KNOWLEDGE TO ELEVATE
China is not traditionally a popular jurisdiction for ship arrest. However, Members and clients with ships calling at por ...
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- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Riau Bara Harum - Indonesia
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- TeaM Sual Corporation - Philippines
- Borneo Indobara - Indonesia
- CNBM International Corporation - China
- McConnell Dowell - Australia
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- SMG Consultants - Indonesia
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- Mercuria Energy - Indonesia
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Aboitiz Power Corporation - Philippines
- ASAPP Information Group - India
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- Xindia Steels Limited - India
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- MS Steel International - UAE
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- International Coal Ventures Pvt Ltd - India
- PowerSource Philippines DevCo
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- Orica Australia Pty. Ltd.
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Transport, Egypt
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Ind-Barath Power Infra Limited - India
- Australian Coal Association
- Vijayanagar Sugar Pvt Ltd - India
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Jaiprakash Power Ventures ltd
- Goldman Sachs - Singapore
- Energy Development Corp, Philippines
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Kobexindo Tractors - Indoneisa
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Directorate Of Revenue Intelligence - India
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- Minerals Council of Australia
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Krishnapatnam Port Company Ltd. - India
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- White Energy Company Limited
- Sojitz Corporation - Japan
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Posco Energy - South Korea
- The University of Queensland
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Heidelberg Cement - Germany
- Economic Council, Georgia
- Price Waterhouse Coopers - Russia
- Petrochimia International Co. Ltd.- Taiwan
- Formosa Plastics Group - Taiwan
- Merrill Lynch Commodities Europe
- Planning Commission, India
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Mintek Dendrill Indonesia
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Jorong Barutama Greston.PT - Indonesia
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