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Friday, 17 July 15
DO CANCELLATION RIGHTS UNDER VOYAGE CHARTERPARTY SURVIVE RE-NOMINATION OF LOAD PORT? - INCE&CO
 KNOWLEDGE TO ELEVATE
Do cancellation rights under voyage charterparty survive re-nomination of load port?
St Shipping & Transport Inc v. Kriti Filoxenia Shipping Co SA [2015] EWHC 997 (Comm) (MT Kriti Filoxenia)
The Commercial Court has considered whether cancellation provisions in the BEEPEEVOY3 charterparty form were applicable in the event of re-nomination of a load port by charterers under the charter. In this case, the Charterers re-nominated the load port which the Owners were not able to reach by the cancellation date. The Charterers cancelled the charterparty. In arbitration proceedings, the Tribunal found that the cancellation provisions were not applicable where the Charterers had exercised the contractual option to re-nominate a load port. The Charterers appealed the decision to the Commercial Court, which upheld the findings of the Tribunal and dismissed the appeal.
The background facts
This case concerned a voyage charterparty under the BEEPEEVOY 3 standard form. The key clauses in the charterparty provided as follows:
“17.… If it appears to Charterers that the Vessel will be delayed beyond the Cancelling Date Charterers may require Owners to notify Charterers of the date on which they expect the Vessel to be ready to load whereupon Charterers shall have the option to cancel this Charter…
24.… If after any loading or discharge port or place has been nominated Charterers desire to vary such port or place, Owners shall issue such revised instructions as are necessary at any time to give effect to Charterers’ revised orders and any period by which the steaming time taken to reach the alternative port or place exceeds the time which should have been taken had the Vessel proceeded thither directly shall count as laytime or, if the Vessel is on demurrage, as demurrage.”
The vessel proceeded to a nominated load port within the range provided for under the charterparty. The Charterers then nominated an alternative load port under clause 24. The Owners could not reach that load port by the cancellation date and the Charterers cancelled the charterparty in reliance upon clause 17. The Owners denied that the Charterers had a right to cancel and accepted the cancellation as a repudiation of the charterparty. The dispute went to arbitration.
The arbitration award
The Tribunal found in favour of the Owners and held that the cancellation provisions in clause 17 did not apply where the Charterers exercised the liberty given under clause 24 to re-nominate the load port. The Tribunal further held that, even if the cancellation provisions did apply, the Charterers may not cancel where the re-nomination was made at a time when the estimated time of arrival for the re-nominated port was after the cancellation date under the charterparty. The Charterers appealed to the Commercial Court.
The Commercial Court decision
When it came to construing the words in clauses 17 and 24 of the charterparty, the Court took as its starting point the ordinary and natural meaning of the words used in those clauses as they would be understood by reasonable charterers and owners in the context in which the agreement was made. The Court highlighted the importance of the fact that the parties to a charterparty were involved in a venture which required a degree of co-operation in order to work successfully. Regarding clause 17, the cancellation clause, the Charterers’ ability to cancel necessarily entailed that the Charterers would do what is necessary on their part to enable the vessel to achieve that cancellation date and not impair the
Owners’ ability to comply with that date
The Court also looked at the reasons why it is in the interests of both sides to agree a cancellation date. At common law, subject to the express terms of a charterparty, both parties are bound by the contract until the delay is such that it frustrates the commercial purpose of the venture. Agreeing a cancellation date provides certainty to both parties in that it avoids disputes as to when that delay has frustrated a contract, which is a matter of fact in each case.
The Court referred to the “broad commercial interpretation” it has previously taken in the construction of these types of clauses, in order to achieve the parties’ commercial objectives. In this regard, the Court examined the commercial considerations which underlie the re-nomination clause. For the Charterers, the main advantage of this clause is to have greater flexibility to revise their orders so as to tailor their shipping arrangements according to their cargo arrangements. On the other hand, absence of the load port re-nomination provision would be advantageous to the Owners since it would give them the certainty of an irrevocable nomination. The Court also noted the commercial value of the cancellation clause from the Charterers’ perspective. On balance, the Court placed more importance on the Owners’ concerns of losing the certainty of an irrevocable nomination, whilst at the same time remaining exposed to the Charterers’ right to cancel.
The Court also noted that clause 24 made no express reference to the cancellation rights under clause 17. The Court recognised that the BEEPEEVOY 3 charterparty, being a standard form, is a document drafted with considerable care. Had the draftsmen of this form intended for the clause 17 cancellation rights to apply to a re-nomination of the load port under clause 24, express words would have been used to that effect and would have provided for how such rights would apply and in what circumstances. No such words were present in this case.
The appeal was therefore dismissed.
Comment
This case serves as a useful reminder of the English Court’s approach to the interpretation of charterparty provisions and, in particular, to consideration of the interplay between a cancellation clause and a load port re-nomination provision under a voyage charterparty. This decision also highlights the Court’s commercial approach to such issues, in particular its reference to the Charterers’ duty to co-operate with the Owners and to do what is necessary to enable the vessel to achieve the cancellation date if they wish to be able to rely upon the cancellation clause.
Source: INCE&Co
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Wednesday, 12 June 24
CHINA ACCOUNTS FOR 16.3% OF AUSTRALIA'S COAL EXPORTS, FOLLOWED BY INDIA 14.4% - BANCHERO COSTA
Global coal trade has really picked up pace in recent months, and is now fully back to pre-Covid levels says Banchero Costa in its latest report.
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Wednesday, 12 June 24
LNG NEWBUILDING VALUES AT RECORD HIGH: 78 NEWBUILD ORDERS PLACED IN 2024, DOUBLING 2023 - VESON NAUTICAL
The number of LNG newbuilding orders have more than doubled from the same period last year where 34 orders were placed, compared to 78 in the first ...
Monday, 10 June 24
CHINA'S MAY COAL IMPORTS RISE 11% ON LOWER DOMESTIC OUTPUT - REUTERS
China’s imports of coal rose 11% in May from a year earlier, customs data and Reuters records showed on Friday, as lower domestic output this ...
Tuesday, 04 June 24
HOW DO WESTERN SANCTIONS ON RUSSIA IMPACT THE GLOBAL METALS, MINING AND COAL MARKETS - WOOD MACKENZIE
The geopolitical landscape for Russia, as a major supplier of various commodities, has undergone a dramatic transformation since the invasion of Uk ...
Friday, 22 March 24
CASE STUDY: DANGERS OF COAL CARGO - SKULD
Recently, a bulk cargo vessel carrying coal from South Africa to Singapore suffered a fatal accident, resulting in the deaths of three crew members ...
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Showing 21 to 25 news of total 6871 |
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- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
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- Goldman Sachs - Singapore
- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- Renaissance Capital - South Africa
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
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- Straits Asia Resources Limited - Singapore
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- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
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- IHS Mccloskey Coal Group - USA
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- Trasteel International SA, Italy
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- Riau Bara Harum - Indonesia
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- Bank of Tokyo Mitsubishi UFJ Ltd
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- Indonesian Coal Mining Association
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Antam Resourcindo - Indonesia
- Timah Investasi Mineral - Indoneisa
- VISA Power Limited - India
- Planning Commission, India
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- The Treasury - Australian Government
- India Bulls Power Limited - India
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Central Java Power - Indonesia
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- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Petrochimia International Co. Ltd.- Taiwan
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- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Merrill Lynch Commodities Europe
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- Economic Council, Georgia
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- Sinarmas Energy and Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
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- Power Finance Corporation Ltd., India
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- Mintek Dendrill Indonesia
- Anglo American - United Kingdom
- CNBM International Corporation - China
- Commonwealth Bank - Australia
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- Maheswari Brothers Coal Limited - India
- Australian Coal Association
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- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
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- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
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- Iligan Light & Power Inc, Philippines
- Baramulti Group, Indonesia
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- International Coal Ventures Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
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- Aboitiz Power Corporation - Philippines
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- The University of Queensland
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
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- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Parry Sugars Refinery, India
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- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Indogreen Group - Indonesia
- PTC India Limited - India
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- San Jose City I Power Corp, Philippines
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
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- PetroVietnam Power Coal Import and Supply Company
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