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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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Wednesday, 24 February 16
HOW IS THE FUEL MIX FOR U.S. ELECTRICITY GENERATION CHANGING? - EIA
In recent years, there have been changes in the mix of fuels used to generate electricity in the United States. Natural gas and renewable energy so ...
Wednesday, 24 February 16
PRIVATE EQUITY FUNDS LOOKING TO EXIT SHIPPING, MOST NOTABLY DRY BULK, AS OVERORDERING HAS RESULTED IN EXCESS TONNAGE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The injection of more than $13 billion in shipping from various private equity funds over the past few years has resulted in what many feared would ...
Wednesday, 24 February 16
THIRTEEN - NOT ALWAYS AN UNLUCKY NUMBER? - CLARKSONS
Back in early 1999 the price of a 5 year old Panamax bulkcarrier dipped to $13.5m, and ever since analysts have hailed purchase decisions made at t ...
Monday, 22 February 16
4200 GAR COAL INDEX SETTLES AT $27.02, DOWN 0.07% FROM LAST WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.17 percent week over week to averaging $38.89 per ton on this past Friday, ...
Monday, 22 February 16
FREIGHT MARKETS PICKED UP SLIGHTLY THIS PAST WEEK
COALspot.com: The freight markets picked up slightly this past week.
The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measure of gl ...
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Showing 2551 to 2555 news of total 6871 |
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- Mercator Lines Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- VISA Power Limited - India
- Vedanta Resources Plc - India
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- Samtan Co., Ltd - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Mercuria Energy - Indonesia
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- SMG Consultants - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Australian Coal Association
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Kideco Jaya Agung - Indonesia
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Bukit Baiduri Energy - Indonesia
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- Chamber of Mines of South Africa
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Altura Mining Limited, Indonesia
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- Interocean Group of Companies - India
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Riau Bara Harum - Indonesia
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Meenaskhi Energy Private Limited - India
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CNBM International Corporation - China
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
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