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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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Tuesday, 15 March 16
PORT OF NEWCASTLE SHIPPED 12.78 MMT OF COAL IN FEBRUARY 2016
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped AU$1,110.5 mi ...
Tuesday, 15 March 16
ADARO ENERGY LOWERED ITS COAL CASH COST BY 16% TO US$ 27.98 PER TONE IN 2015
Difficult Coal Market Condition Persists in 2015, Adaro Lowers Costs, Reduces Capital Spending and Maintains Solid Liquidity.
PT Adaro E ...
Monday, 14 March 16
THE CS 50 INDEX ROSE $0.16 OR, 0.41% TO $38.82 A TON
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 0.41 percent week over week to averaging $38.82 per ton on this past Friday, ac ...
Monday, 14 March 16
THE BALTIC EXCHANGE CONTINUED TO ROSE THIS PAST WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to rise this week helped by higher rates for pa ...
Saturday, 12 March 16
PLN, COAL COMPANIES IN TALKS ABOUT PRICES - THE JAKARTA POST
Following a study that predicted that Indonesia would struggle to provide coal for its power stations in the near future, the government will facil ...
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Showing 2521 to 2525 news of total 6871 |
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- Madhucon Powers Ltd - India
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Goldman Sachs - Singapore
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- CIMB Investment Bank - Malaysia
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- MS Steel International - UAE
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Sical Logistics Limited - India
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Independent Power Producers Association of India
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- The University of Queensland
- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- Commonwealth Bank - Australia
- Directorate Of Revenue Intelligence - India
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- Australian Coal Association
- Ministry of Finance - Indonesia
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- Power Finance Corporation Ltd., India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- Aditya Birla Group - India
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- Baramulti Group, Indonesia
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Dalmia Cement Bharat India
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Planning Commission, India
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
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