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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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Thursday, 07 April 16
PANAMAX RATES ARE FIRMING IN BOTH HEMISHEPHERES - FEARNLEYS
Capesize
With a great volume our of west Australia, rates were finally moving to upper 3's. and stabilizing towards the middle of the week in ...
Thursday, 07 April 16
BIMCO AND GIIGNL PUBLISH A GROUNDBREAKING VOYAGE CHARTER PARTY FOR LNG TRADE
BIMCO and the International Group of Liquefied Natural Gas Importers (GIIGNL) have today jointly issued the first definitive voyage charter party & ...
Wednesday, 06 April 16
HOW LONG SHIPPING CRISIS WILL BE; WHEN SHOULD OWNERS EXPECT THE BULK CARRIERS TO BECOME PROFITABLE? - INTERMODAL
It is the consensus that dry bulk shipping has been in a crisis for quite some time now. Bulk carrier values are at historical low levels, therefor ...
Tuesday, 05 April 16
DRY BULK REVISITS 1980S LOWS AND FACES UNCERTAIN LONGER TERM OUTLOOK - MSI | HELLENIC SHIPPING NEWS
With the market near bottom, attention is turning to the length of the downturn, the effect on asset values and the impact of broader demand side c ...
Monday, 04 April 16
THE LOADING, AND SUBSEQUENT DISCHARGE, OF UNSAFE NICKEL ORE - ALL TIME TO 'COUNT' - THE STANDARD CLUB
KNOWLEDGE TO ELEVATE
In a recent, published, London arbitration award the English tribunal has held that all time lost as a result of loading, ...
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Showing 2491 to 2495 news of total 6871 |
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- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Economic Council, Georgia
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bharathi Cement Corporation - India
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- Pendopo Energi Batubara - Indonesia
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Sakthi Sugars Limited - India
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- The University of Queensland
- Attock Cement Pakistan Limited
- Mercator Lines Limited - India
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- Madhucon Powers Ltd - India
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- Independent Power Producers Association of India
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kobexindo Tractors - Indoneisa
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- White Energy Company Limited
- India Bulls Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Deloitte Consulting - India
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Anglo American - United Kingdom
- Rio Tinto Coal - Australia
- IHS Mccloskey Coal Group - USA
- SMC Global Power, Philippines
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Oldendorff Carriers - Singapore
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Planning Commission, India
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sojitz Corporation - Japan
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Australian Coal Association
- Cement Manufacturers Association - India
- ICICI Bank Limited - India
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Kartika Selabumi Mining - Indonesia
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