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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, 03 March 16
BDI FURTHER STRENGTHENING; THE INCREASE IN RATES WAS NOT SUBSTANTIAL
COALspot.com: The BDI closed off on a positive note for a second week in a row, further strengthening the belief that the market might be bottoming ...
Thursday, 03 March 16
RIO TINTO COMPLETES SALE OF INTEREST IN BENGALLA JOINT VENTURE FOR US$616.7 MILLION
COALspot.com: Rio Tinto has completed the sale of its 40 per cent interest in the Bengalla coal Joint Venture in Australia to New Hope Corporation ...
Wednesday, 02 March 16
RE-EVALUATION OF MINING LICENSES CLEAN AND CLEAR STATUS IN INDONESIA
COALspot.com: In connection with the transfer of mining authority from Regents/Mayors to Governors1 and from Regents/Mayors and Governors to t ...
Wednesday, 02 March 16
OIL MY GOD.....!!!!
OIL my GOD….!!!!
The oil price “crash” that started in 2014 was caused by a glut of practically unwanted oil. Producers had be ...
Tuesday, 01 March 16
CS 42 (4200 GAR) COAL INDEX CLOSED AT US$ 27.11 A TON ON 26 FEBRUARY
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.31 percent week over week to averaging $38.77 per ton on this past Friday, ...
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Showing 2541 to 2545 news of total 6871 |
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- White Energy Company Limited
- SMG Consultants - Indonesia
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- Aditya Birla Group - India
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Georgia Ports Authority, United States
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Mercator Lines Limited - India
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Asmin Koalindo Tuhup - Indonesia
- Singapore Mercantile Exchange
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- McConnell Dowell - Australia
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Barasentosa Lestari - Indonesia
- Orica Australia Pty. Ltd.
- OPG Power Generation Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- PetroVietnam Power Coal Import and Supply Company
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- GMR Energy Limited - India
- Thiess Contractors Indonesia
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indonesian Coal Mining Association
- Minerals Council of Australia
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Uttam Galva Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Rashtriya Ispat Nigam Limited - India
- Holcim Trading Pte Ltd - Singapore
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petron Corporation, Philippines
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Banpu Public Company Limited - Thailand
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- Jaiprakash Power Ventures ltd
- Central Electricity Authority - India
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Binh Thuan Hamico - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- LBH Netherlands Bv - Netherlands
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