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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, 05 March 15
INDIA WILL BE THE LARGEST DRIVER OF GLOBAL SEABORNE COKING COAL DEMAND GROWTH IN 2015 - WOOD MACKENZIE
Global demand growth will remain weak because of China’s negative demand growth.
COALspot.com: At Coaltrans India, Wood Mackenzie says I ...
Thursday, 05 March 15
BUKIT ASAM BOOKED US$ 1 BILLION REVENUE IN 2014
COALspot.com: Indonesian publicly listed and state owned coal miner PT. Bukit Asam, has announced that, the revenue of the company for the period J ...
Wednesday, 04 March 15
AN AGENDA FOR CHANGE - FITCH INDONESIA CONFERENCE
Fitch Indonesia Conference - 5 March 2015
Fitch Ratings will host its annual Indonesia conference on 5 March 2015.
The theme of this year ...
Wednesday, 04 March 15
KEEP CALM AND INVEST IN DRY - THEODORE NTALAKOS
Keep Calm and Carry On was originally a motivational poster, intended to raise the morale of the British public, produced by the British government ...
Tuesday, 03 March 15
INDONESIAN COAL EXPORT VOLUME TO DECLINE 50% BY 2019
COALspot.com: The Indonesian government is planning to reduce coal export volume by 50% within the next five years while keeping its coal productio ...
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- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Neyveli Lignite Corporation Ltd, - India
- MS Steel International - UAE
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- Baramulti Group, Indonesia
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Coalindo Energy - Indonesia
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- Agrawal Coal Company - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Bhatia International Limited - India
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- Kartika Selabumi Mining - Indonesia
- Kumho Petrochemical, South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- Aboitiz Power Corporation - Philippines
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Iligan Light & Power Inc, Philippines
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- White Energy Company Limited
- Semirara Mining Corp, Philippines
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Directorate General of MIneral and Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Eastern Energy - Thailand
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- Central Electricity Authority - India
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Siam City Cement - Thailand
- The University of Queensland
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Indika Energy - Indonesia
- Standard Chartered Bank - UAE
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- Parliament of New Zealand
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- The Treasury - Australian Government
- Kepco SPC Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Altura Mining Limited, Indonesia
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