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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, 02 March 15
FOB NEWCASTLE COAL SWAP ROSE 6.89% MONTH OVER MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 3.35 per MT (+6.89%) month over month and US$ 0.40 (0.78%) week on ...
Sunday, 01 March 15
BDI INDEX SLIGHTLY UP CAUSED AN INCREASE IN THE PANAMAX, SUPARAMAX AND HANDY SIZE INDICES
COALspot.com: The freight market saw some gains this week and BDI was up 5.26 pct closed at 540 points. However the Cape index failed to follow BDI ...
Friday, 27 February 15
WEEKLY US COAL PRODUCTION DOWN AN ESTIMATED 14.0% FROM LAST WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 16.5 million short tons (mmst) of coal ...
Thursday, 26 February 15
DRY BULK MARKET COULD REBOUND FROM HISTORICAL LOWS IN THE COMING WEEKS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market could exit from its historical lows in the coming weeks, as Chinese buyers reenter the market after the holiday celebrations. T ...
Thursday, 26 February 15
COAL POLICY RISK: HIGHER ROYALTIES FOR IUP HOLDERS - BAHANA SECURITIES | JAKARTA POST
The Energy and Mineral Resources Ministry plans to raise coal royalties charged to mining operation permit (IUP) holders by the end of the first qu ...
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- Pipit Mutiara Jaya. PT, Indonesia
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- Aboitiz Power Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- Standard Chartered Bank - UAE
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Interocean Group of Companies - India
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
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- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
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- Siam City Cement - Thailand
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
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- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
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- The University of Queensland
- Carbofer General Trading SA - India
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- Africa Commodities Group - South Africa
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Ceylon Electricity Board - Sri Lanka
- Parliament of New Zealand
- Trasteel International SA, Italy
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Jindal Steel & Power Ltd - India
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Power Finance Corporation Ltd., India
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- Georgia Ports Authority, United States
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- GMR Energy Limited - India
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Leighton Contractors Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Riau Bara Harum - Indonesia
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Thiess Contractors Indonesia
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Vedanta Resources Plc - India
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- London Commodity Brokers - England
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Kobexindo Tractors - Indoneisa
- Indian Energy Exchange, India
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
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- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
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