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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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Wednesday, 04 February 15
MARKET INSIGHT - LINOS KOGEVINAS
It has been just about over 2 months since, in a move that surprised many and caused widespread apprehension, OPEC decided to maintain its producti ...
Tuesday, 03 February 15
Q1'15 FOB INDONESIA COAL SWAP CLOSED $ 3.29 HIGHER COMPARED TO Q4'15 DELIVERY PRICE
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 rose week over week and month on month.
The Q1 swap up US$ 0.68 (+1.41%) month o ...
Tuesday, 03 February 15
FOB NEWCASTLE COAL SWAP FOR Q4 DELIVERY CLOSED 5.86% LOWER THAN Q1 PRICE
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery rose US$ 0.26 per MT (+0.51%) week over week and declined US$ 0.02 (-0.04%) ...
Monday, 02 February 15
API 4 FOB RICHARDS BAY COAL SWAP ROSE WEEK OVER WEEK
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q1' 2015 declined month over month and day on day.
The Q1 swap has decli ...
Monday, 02 February 15
INDONESIA'S ADARO ENERGY PRODUCED 56.21 MILLION TONNES OF COAL IN 2014; UP 8% Y-O-Y
COALspot.com: PT. Adaro Energy, Indonesia’s largest coal producer, has increased coal production by 8% to 56.21 million tonnes (Mt) from both ...
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- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Latin American Coal - Colombia
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- PowerSource Philippines DevCo
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Central Electricity Authority - India
- London Commodity Brokers - England
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- PTC India Limited - India
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Bhatia International Limited - India
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- IHS Mccloskey Coal Group - USA
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Aditya Birla Group - India
- Posco Energy - South Korea
- Meralco Power Generation, Philippines
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Lanco Infratech Ltd - India
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Mercator Lines Limited - India
- Rashtriya Ispat Nigam Limited - India
- Karaikal Port Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- MS Steel International - UAE
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Barasentosa Lestari - Indonesia
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- Ind-Barath Power Infra Limited - India
- Intertek Mineral Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- European Bulk Services B.V. - Netherlands
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- Oldendorff Carriers - Singapore
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
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