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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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Saturday, 14 February 15
SHALE GAS AND TIGHT OIL ARE COMMERCIALLY PRODUCED IN JUST FOUR COUNTRIES - EIA
KNOWLEDGE TO ELEVATE
The United States, Canada, China, and Argentina are currently the only four countries in the world that are producing com ...
Friday, 13 February 15
U.S. WEEKLY COAL PRODUCTION SHOWS 10% DECLINE
COALspot.com – United States the world's one of the largest coal producers, produced approximately 18.1 million short tons (mmst) of coal ...
Friday, 13 February 15
SMALL AND MEDIUM-SIZED SHIP OWNERS SQUEEZED OUT OF THE MARKET ON CRASHING DRY BULK MARKET AND EUROZONE CRISIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Financing issues have started to tighten the noose in the throats of small and medium-size ship owners, who were already facing problems over the p ...
Thursday, 12 February 15
CAPESIZE: THE BEST DESCRIPTION FOR THE MARKET IS, FLAT - FEARNRESEARCH
Handy
The handy and supra market is also being affected by the marginal volume of activity in the commodity sales. We see a small upturn in the T ...
Thursday, 12 February 15
DRY BULK OWNERS SCRAP MORE VESSELS, AS MARKET REACHES HISTORICAL LOWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has reached historical lows this week, with the Baltic Dry Index (BDI) now trading at levels below operating expense levels for ...
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- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- Energy Development Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Parliament of New Zealand
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- Wilmar Investment Holdings
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Deloitte Consulting - India
- VISA Power Limited - India
- MS Steel International - UAE
- White Energy Company Limited
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
- Gujarat Sidhee Cement - India
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Banpu Public Company Limited - Thailand
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Directorate Of Revenue Intelligence - India
- The University of Queensland
- Carbofer General Trading SA - India
- Planning Commission, India
- Eastern Coal Council - USA
- Renaissance Capital - South Africa
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Formosa Plastics Group - Taiwan
- Antam Resourcindo - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- GMR Energy Limited - India
- Energy Link Ltd, New Zealand
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Videocon Industries ltd - India
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- Bharathi Cement Corporation - India
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Meralco Power Generation, Philippines
- Simpson Spence & Young - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- Ambuja Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Electricity Authority, New Zealand
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