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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, 10 February 15
SUB-BIT FOB INDONESIA COAL SWAP ADVANCES 3.79% WEEK ON WEEK
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose week over week and month on month.
The Q2 swap up US$ 0.85 (+1.81%) month o ...
Tuesday, 10 February 15
FOB NEWCASTLE COAL SWAPS SURGE WEEK OVER WEEK, RAISING HOPES?
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 0.95 per MT (+1.91%) week over week and declined US$ 0.06 (-0.12%) ...
Monday, 09 February 15
AUSTRALIAN COAL PRODUCERS BEST POSITIONED IN OVERSUPPLIED MARKET; US MINES MOST AT RISK - WOOD MACKENZIE
In a 2015 global coal outlook report, Wood Mackenzie says that Australia and Indonesian coal suppliers will see some upside in the difficult months ...
Monday, 09 February 15
FOB RICHARDS BAY COAL SWAP GAINS 3.65% TO ONE-MONTH HIGH
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month and day on day.
The Q2 swap has soared US$ 2.1 ...
Monday, 09 February 15
Q2' CFR SOUTH CHINA COAL SWAP DECLINED 3.28% TO $ 56.92 W-O-W
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 1.93 (-3.28%) per MT month over month and US$ 0.10 (-0 ...
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- Indonesian Coal Mining Association
- Latin American Coal - Colombia
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- Ministry of Finance - Indonesia
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- McConnell Dowell - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Maharashtra Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- Marubeni Corporation - India
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Mjunction Services Limited - India
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- White Energy Company Limited
- Economic Council, Georgia
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- Parliament of New Zealand
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Indian Energy Exchange, India
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Indogreen Group - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Wilmar Investment Holdings
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The Treasury - Australian Government
- Xindia Steels Limited - India
- Salva Resources Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Eastern Energy - Thailand
- VISA Power Limited - India
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Goldman Sachs - Singapore
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Australian Coal Association
- Vizag Seaport Private Limited - India
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Manunggal Multi Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- Jaiprakash Power Ventures ltd
- Price Waterhouse Coopers - Russia
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- Semirara Mining Corp, Philippines
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Minerals Council of Australia
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- London Commodity Brokers - England
- Bhoruka Overseas - Indonesia
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Aboitiz Power Corporation - Philippines
- Mintek Dendrill Indonesia
- Coal and Oil Company - UAE
- Interocean Group of Companies - India
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Binh Thuan Hamico - Vietnam
- Indika Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- Kobexindo Tractors - Indoneisa
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
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