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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, 24 February 15
IHS ENERGY COAL CONFERENCE OF THE AMERICAS
Attend the IHS Energy Coal Conference of the Americas 17-19 March in Cartagena, Colombia and learn about timely concerns in today's coal indust ...
Monday, 23 February 15
Q2' CFR SOUTH CHINA COAL SWAP FOR Q2 ROSE 3.39% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 1.90 (+3.39%) per MT month over month and declined US$ 0.08 ...
Monday, 23 February 15
Q2' API 5 FOB NEWCASTLE COAL SWAP CLOSED $1 HIGHER THAN Q3
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 3.12 per MT (+6.44%) month over month and fall US$ 0.43 (-0.83%) w ...
Sunday, 22 February 15
THE BALTIC DRY INDEX LOST ALMOST 3.2% OR 17 POINTS WEEK ON WEEK
COALspot.com: The Baltic Dry Index, one of the economic indicators that monitors the health of the world's economy by tracking the price of shi ...
Friday, 20 February 15
GOVT SET TO INCREASE COAL OUTPUT TARGET THIS YEAR - JAKARTA POST
The Energy and Mineral Resources Ministry is planning to increase its coal output target this year as the government seeks to offset the ongoing de ...
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- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- Global Business Power Corporation, Philippines
- Thiess Contractors Indonesia
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- Eastern Energy - Thailand
- GMR Energy Limited - India
- Sical Logistics Limited - India
- Commonwealth Bank - Australia
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- Orica Australia Pty. Ltd.
- Semirara Mining Corp, Philippines
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- Vizag Seaport Private Limited - India
- Larsen & Toubro Limited - India
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- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Star Paper Mills Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
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- Intertek Mineral Services - Indonesia
- VISA Power Limited - India
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- White Energy Company Limited
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- Merrill Lynch Commodities Europe
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- Global Coal Blending Company Limited - Australia
- Aboitiz Power Corporation - Philippines
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Tata Chemicals Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Videocon Industries ltd - India
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- Cement Manufacturers Association - India
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- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
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- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
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- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Semirara Mining and Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- New Zealand Coal & Carbon
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- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- SMG Consultants - Indonesia
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- Parry Sugars Refinery, India
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
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- Thai Mozambique Logistica
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- The Treasury - Australian Government
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- Minerals Council of Australia
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- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- Essar Steel Hazira Ltd - India
- Karaikal Port Pvt Ltd - India
- Mercator Lines Limited - India
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- Carbofer General Trading SA - India
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bharathi Cement Corporation - India
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- PTC India Limited - India
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- MS Steel International - UAE
- India Bulls Power Limited - India
- Sojitz Corporation - Japan
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
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- Parliament of New Zealand
- Orica Mining Services - Indonesia
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
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