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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, 24 March 16
NEWBUILDINGS' PRICES HAVE STARTED TO COME DOWN - ALLIED | HELLENIC SHIPPING NEWS
Newbuildings’ prices have started to come down, as demand has remained subdued for quite some time now. In its latest weekly report, shipbrok ...
Wednesday, 23 March 16
THE PANAMA CANAL - WILL THE MELTING OF POLAR ICE CAPS CREATE RIVAL NAVIGATIONAL WATERWAYS THROUGH THE ARCTIC? - INTERMODAL
The Panama Canal, 102 years after its initial opening, is now about to have its expansion completed with a cost of USD5.25 Billion. It is a project ...
Tuesday, 22 March 16
FOUR NEW MARKET MEMBERS HAVE JOINED GLOBALCOAL
globalCOAL® announced yesterday that four new Market Members have joined its international trading community.
Ferrocadia DMCC is an intern ...
Monday, 21 March 16
INDONESIAN 4200 GAR COAL INDEX ROSE $0.12 OR, 0.44% WEEK OVER WEEK; INDEX CLOASED AT $27.19 A TON
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 0.21 percent week over week to averaging $38.90 per ton on this past Friday, ac ...
Monday, 21 March 16
THE BALTIC DRY INDEX ROSE SLIGHTLY WEEK OVER WEEK; BCI UP 11.93%
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued rose this week helped by higher rates for Cape ...
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Showing 2511 to 2515 news of total 6871 |
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- Deloitte Consulting - India
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Anglo American - United Kingdom
- Coal and Oil Company - UAE
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Grasim Industreis Ltd - India
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- PTC India Limited - India
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- Thiess Contractors Indonesia
- Sindya Power Generating Company Private Ltd
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Latin American Coal - Colombia
- Marubeni Corporation - India
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- San Jose City I Power Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Oldendorff Carriers - Singapore
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Attock Cement Pakistan Limited
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- MS Steel International - UAE
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Metalloyd Limited - United Kingdom
- Sical Logistics Limited - India
- Karaikal Port Pvt Ltd - India
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Romanian Commodities Exchange
- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Rashtriya Ispat Nigam Limited - India
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- Mjunction Services Limited - India
- White Energy Company Limited
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Kideco Jaya Agung - Indonesia
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Jorong Barutama Greston.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Agrawal Coal Company - India
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Salva Resources Pvt Ltd - India
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- OPG Power Generation Pvt Ltd - India
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