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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, 10 March 16
IT FEELS SAFE TO SAY THAT THE MARKET IS SLOWLY AND PAINFULLY REGAINING ITS BALANCE
With the BDI marking its third consecutive positive weekly closing, it feels safe to say that the market is regaining its balance; slowly and painf ...
Wednesday, 09 March 16
U.S. COAL EXPORTS DECLINED 24% (74 MMST) IN 2015; COAL PRODUCTION IS EXPECTED TO DECREASE BY 111 MMST IN 2016 - EIA
U.S. Coal Supply
EIA estimates that U.S. coal production for February 2016 was 54 million short tons (MMst), a 4 MMst (7%) decrease from the prev ...
Wednesday, 09 March 16
RI MAY HAVE TO IMPORT COAL FOR FUTURE POWER PLANTS: STUDY - THE JAKARTA POST
With coal prices continuing to decline, Indonesia will struggle to provide the coal needed to fire up its power stations in the near future, a stud ...
Tuesday, 08 March 16
INDONESIA HIKES COAL BENCHMARK PRICE FOR THE FIRST TIME IN 12 MONTHS
COALspot.com: Low coal demand and excess supplies sent Indonesian benchmark coal price further deep in February 2016, but up slightly in Mar ...
Tuesday, 08 March 16
THE DRY CARGO MARKET ENDURED ONE OF ITS MOST DIFFICULT YEARS IN 2015, EXPERIENCING LOWS NOT SEEN SINCE THE MID 1980S - CLARKSONS
Whilst shipping and offshore markets have seen some good opportunities during 2015, overall there have been unprecedented challenges, so we are ver ...
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Showing 2531 to 2535 news of total 6871 |
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- Videocon Industries ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- New Zealand Coal & Carbon
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- Ministry of Mines - Canada
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mercator Lines Limited - India
- White Energy Company Limited
- The Treasury - Australian Government
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- Central Java Power - Indonesia
- Straits Asia Resources Limited - Singapore
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- IHS Mccloskey Coal Group - USA
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Petron Corporation, Philippines
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- Kumho Petrochemical, South Korea
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Planning Commission, India
- Coalindo Energy - Indonesia
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Globalindo Alam Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- Manunggal Multi Energi - Indonesia
- PTC India Limited - India
- Makarim & Taira - Indonesia
- MS Steel International - UAE
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- Essar Steel Hazira Ltd - India
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- PNOC Exploration Corporation - Philippines
- Jaiprakash Power Ventures ltd
- CNBM International Corporation - China
- Neyveli Lignite Corporation Ltd, - India
- Electricity Authority, New Zealand
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Romanian Commodities Exchange
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Lanco Infratech Ltd - India
- Australian Commodity Traders Exchange
- Carbofer General Trading SA - India
- Africa Commodities Group - South Africa
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