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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, 12 February 15
INDONESIAN COAL PRICE REFERENCE INCHED DOWN 1.44% IN FEBRUARY
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down Indonesian coal bench mark price this month to US$ 62.92 pe ...
Thursday, 12 February 15
NEWBUILDING ORDERING ACTIVITY DRAGS ON, AS OWNERS ARE LOOKING FOR LOWER PRICES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship owners appear to be waiting for lower prices in their dealings with Asian shipyards, as the dry bulk market is at historical lows. According t ...
Wednesday, 11 February 15
DRY BULK MARKET REMAINED UNDER PRESSURE : STABILIZING CAPE MARKET HARDLY HELPED SENTIMENT
COALspot.com: The Dry Bulk market remained under pressure last week, while the stabilizing Cape market hardly helped sentiment.
Greece based s ...
Wednesday, 11 February 15
BDI HITTING THE ALL-TIME LOW; FFA MARKETS NOT SHOWING ANY POSITIVE SIGNS
With the BDI hitting the all-time low and with FFA markets not showing any positive signs for a possible recovery in the near future, pessimism is ...
Tuesday, 10 February 15
IRON ORE MARKET TO REMAIN OVERSUPPLIED IN 2015: PRICE FORECAST $70/T - WOOD MACKENZIE
COALspot.com: With January witnessing the price of iron ore falling to its lowest levels since May 2009, Roger Emslie, Principal Metals & ...
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- Mercuria Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Trasteel International SA, Italy
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Petron Corporation, Philippines
- The Treasury - Australian Government
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Vizag Seaport Private Limited - India
- Wilmar Investment Holdings
- Marubeni Corporation - India
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- Australian Coal Association
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Timah Investasi Mineral - Indoneisa
- Coal and Oil Company - UAE
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- The University of Queensland
- Vedanta Resources Plc - India
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- Deloitte Consulting - India
- Thai Mozambique Logistica
- Sakthi Sugars Limited - India
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- Romanian Commodities Exchange
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- Thiess Contractors Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- Binh Thuan Hamico - Vietnam
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Grasim Industreis Ltd - India
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- Australian Commodity Traders Exchange
- The State Trading Corporation of India Ltd
- Minerals Council of Australia
- Latin American Coal - Colombia
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Indo Tambangraya Megah - Indonesia
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Karaikal Port Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Parliament of New Zealand
- India Bulls Power Limited - India
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Energy Development Corp, Philippines
- Manunggal Multi Energi - Indonesia
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