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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, 31 March 16
CAPE: ANOTHER UNEVENTFUL WEEK WITH FIXTURES CONCLUDED AT LAST DONE LEVELS - FEARNLEYS
Cape
Another uneventful week with fixtures concluded at last done levels, CS levels remain around the USD 3 mark, whilst C3 is still just short o ...
Wednesday, 30 March 16
MINISTRY OF ENERGY AND MINERAL RESOURCES OF INDONESIA TO REVISE METHODOLOGY TO DETERMINE THE SELLING PRICE OF COAL TO MINE-MOUTH POWER PLANTS
COALspot.com: Ministry of Energy and Mineral Resources (ESDM) of Indonesia to review to revise methodology to determine the selling price of co ...
Wednesday, 30 March 16
VALEMAXES: THE BIGGEST NIGHTMARE OF TODAY'S DRY BULK MARKET - INTERMODAL
At a time that Europe is still dealing with the aftermath of the terrorist attacks in Brussels our society is daily bombarded with news of terroris ...
Tuesday, 29 March 16
BULK CARRIER VENTILATION - CAPTAIN PAUL R. WALTON
KNOWLEDGE TO ELEVATE
Moisture damage is a source of many cargo claims. Claimants allege that it is brought about by the ship’s failure t ...
Monday, 28 March 16
INDONESIAN WEEKLY CS50 COAL INDEX CLOSED SLIGHTLY FIRM; CS 57 INDEX CLOSED WEAK
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 0.03 percent week over week to averaging $38.91 per ton on this past Thursday, ...
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Showing 2501 to 2505 news of total 6871 |
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- TeaM Sual Corporation - Philippines
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- Mjunction Services Limited - India
- Lanco Infratech Ltd - India
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Essar Steel Hazira Ltd - India
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Ministry of Mines - Canada
- ASAPP Information Group - India
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- Dalmia Cement Bharat India
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- SMC Global Power, Philippines
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Planning Commission, India
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- McConnell Dowell - Australia
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- White Energy Company Limited
- Aditya Birla Group - India
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Trasteel International SA, Italy
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Kartika Selabumi Mining - Indonesia
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Independent Power Producers Association of India
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Bhoruka Overseas - Indonesia
- Indonesian Coal Mining Association
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- Parry Sugars Refinery, India
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sinarmas Energy and Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- Kideco Jaya Agung - Indonesia
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
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