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Tuesday, 08 December 15
HOW TO MITIGATE LEGAL RISKS WHEN PURCHASING BUNKERS - LESSONS LEARNED FROM THE OW BUNKER COLLAPSE - THE SWEDISH CLUB
 KNOWLEDGE TO ELEVATE
About a year has passed since OW Bunker & Trading A/S filed for bankruptcy. The collapse shows that there are significant risks for shipowners and charterers in using intermediaries for the supply of bunkers. On the one hand the intermediary issues an invoice in capacity as the contractual supplier and should be paid for the bunkers. On the other hand do physical suppliers in some jurisdictions have an independent right to claim the vessel for unpaid bunkers. As a result, there is an inherent risk for competing claims against vessels to the extent the intermediary fails to pass on the payment to the physical supplier.
The collapse of OW Bunker has not only generated disputes involving competing claims against vessel owners by contractual suppliers and physical suppliers, but also charterparty disputes between owners and charterers. The Club’s FD&D lawyers presently handle about 40 cases involving disputes following the collapse of OW Bunkers. The total sum of these disputes is in excess of USD 20 million. The legal issues are complex and case specific. For instance, it has been argued that OW Bunker or their assignees cannot claim payment at all under English law since they never owned the bunkers for which they issued an invoice. This argument was recently dismissed by the English Court of Appeal, see the Club’s Member Alert of 23 October 2015. In addition, a court decision in one country may not apply in another country. Therefore, as of today, no universal solution to the underlying dilemma with competing claims is in sight.
The OW Bunker collapse has generated important lessons for the future. The following steps may be taken by owners and charterers in order to bring contractual clarity in relation to the supply of bunkers, as well as mitigate the risk for competing claims:
Insert BIMCOs non-lien clause in the charterparty, see Special Circular from BIMCO.
Prior to ordering bunkers, the supplier should be provided with the following notice (this is linked to the above non-lien clause):
To: Bunker Sellers (Name, address and contact details)
Take note that we, (Charterers: Name, address and contact details) are today (date) ordering (specification of) bunkers for supply at (port or place) on or about (date) on our account and our credit to MV/MT………… on charter to us and that the bunkers to be supplied to the Vessel are solely for our account as Charterers and that neither the Vessel, the Owners nor the Master is a party to the bunker supply contract and no lien, encumbrance or any rights shall arise on the Vessel.
Yours faithfully
Charterers of MV/MT………
Avoid any reference on the Bunker Delivery Receipt to the physical supplier’s own Terms and Conditions in order to avoid creating a direct contract between the vessel owner and the supplier.
Stamp and sign the Bunker Delivery Receipt with the following wording:
Vessel…………………
This bunker supply is for account of vessel’s time charterers, Messrs………………
I herewith declare that neither owners / bareboat charterers nor the vessel are responsible for payment of this supply and no lien or other claim against the vessel can therefore arise.
Date:
……………………………………………………………
Master / Chief Engineer
Explore possibilities to take out insurance to protect against the risk of charterer (or bunker intermediary) insolvency
As mentioned above, the use of a bunker intermediary will entail an enhanced risk in relation to the supply of bunkers. Members may therefore consider agreeing to only deal with physical bunker suppliers directly and, if so, a provision to that effect should be inserted in any time charterparty.
In the event an intermediary is used the following precautionary steps can be taken:
Endeavour to ensure that the intermediary has an appropriate credit insurance.
Endeavour to agree to pay the intermediary the profit element only by way of paying the physical supplier separately, or by way of making one payment to the intermediary which is split into two; the intermediary receives the profit element as principal and the substantive sum as agent for the physical supplier. At least the first alternative needs to be expressed in the contract with the intermediary.
Endeavour to ensure that the ultimate buyer has the longest credit period in the contractual chain by way of a term in the contract with the intermediary that the intermediary has to first pay their supplier in full for the bunkers before the ultimate buyer is obliged to pay them.
Finally, a word of caution. There is no magic answer which will eliminate all legal risks in relation to the supply of bunkers. All situations differ and there are different parties involved in supply chains. However, the above constitute steps that owners and charterers can take to try to mitigate those risks as much as possible, in appropriate circumstances. It is acknowledged that the steps may be difficult to take in practice.
Source: The Swedish Club | Hellenic Shipping News
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Monday, 18 April 16
INDONESIAN 5000 GAR COAL INDEX DECLINE 1.43 PERCENT WEEK OVER WEEK - CS (I) COAL INDEX
COALspot.com: Average 5000 GAR coal index of Indonesian origin fell 1.43 percent week over week to averaging $38.65 per ton on this past Friday, ac ...
Monday, 18 April 16
SOUTH KOREA STATE-OWNED UTILITY KOMIPO INVITES COAL BIDS FOR BORYEONG POWER PLANT
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 70,000 Metric Tons of 4,600 kcal/kg NAR coal for ...
Monday, 18 April 16
SOUTH AFRICA RB1 COAL HAS LOST GROUND IN INDIA; RB2 MAY LOSE GRIP IF THE PRICE CROSSES US$ 50 A TON - TRADERS
COALspot.com: Indian coal consumers preferred to buy South Africa RB2 coal instead of RB1 coal recent months due to RB2's low CFR price level. ...
Monday, 18 April 16
CAPESIZE INDEX ROSE 44.66 PER CENT WEEK OVER WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to rose this week.
The freight market was ...
Friday, 15 April 16
PANAMAX MARKET CONTINUES TO FIRM - FEARNLEYS
Cape
It has been a positive freight market for the past few weeks, however, this week the market is taking a small breather, says Fearnleys in it ...
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Showing 2471 to 2475 news of total 6871 |
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- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- Eastern Energy - Thailand
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Meralco Power Generation, Philippines
- Maheswari Brothers Coal Limited - India
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Directorate Of Revenue Intelligence - India
- Bhatia International Limited - India
- Straits Asia Resources Limited - Singapore
- Singapore Mercantile Exchange
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Commodity Traders Exchange
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Sical Logistics Limited - India
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Merrill Lynch Commodities Europe
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Energy Link Ltd, New Zealand
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- Malabar Cements Ltd - India
- Australian Coal Association
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- Mercator Lines Limited - India
- Uttam Galva Steels Limited - India
- Sojitz Corporation - Japan
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- LBH Netherlands Bv - Netherlands
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- Electricity Generating Authority of Thailand
- Anglo American - United Kingdom
- Goldman Sachs - Singapore
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Oldendorff Carriers - Singapore
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- ICICI Bank Limited - India
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- Attock Cement Pakistan Limited
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Iligan Light & Power Inc, Philippines
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- Semirara Mining Corp, Philippines
- Manunggal Multi Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Planning Commission, India
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Kobexindo Tractors - Indoneisa
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- Bukit Makmur.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Formosa Plastics Group - Taiwan
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
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