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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, 13 January 16
U.S. COAL PRODUCTION DECLINED BY 109 MMST IN 2015; COAL EXPORTS DECREASED 21% Y-O-Y
COALspot.com: U.S. coal production declined by 109 million short tons (MMst) (11%) in 2015, the largest decline ever recorded, says EIA.
The 2 ...
Wednesday, 13 January 16
SHIPPING MARKET INSIGHT - GEORGE ILIOPOULOS
Going through the second week of 2016 we could easily argue that at this point there are no visible signs of an imminent recovery in the Dry Bulk m ...
Wednesday, 13 January 16
IRON ORE IMPASSE - A FAILED CLAIM FOR CONVERSION - CLYDE & CO
KNOWLEDGE TO ELEVATE
In the recent case of the “Bao Yue”, the English High Court found that the bill of lading holder was liable t ...
Tuesday, 12 January 16
5700 GAR COAL FOR DELIVERY WITHIN Q1 FELL 0.91% WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin moved South direction week over week to averaging $39.96 per ton on last Friday, acc ...
Monday, 11 January 16
PORT OF NEWCASTLE SHIPPED 20% MORE COAL IN DECEMBER 2015; AVERAGE SELLING PRICE DECLINE 3.43%
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $1.129 billio ...
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Showing 2611 to 2615 news of total 6871 |
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- GMR Energy Limited - India
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- Ambuja Cements Ltd - India
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Planning Commission, India
- Goldman Sachs - Singapore
- Dalmia Cement Bharat India
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement - Thailand
- Banpu Public Company Limited - Thailand
- Uttam Galva Steels Limited - India
- The University of Queensland
- Sindya Power Generating Company Private Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Merrill Lynch Commodities Europe
- Australian Coal Association
- Parliament of New Zealand
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- PetroVietnam Power Coal Import and Supply Company
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- Globalindo Alam Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- PTC India Limited - India
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Latin American Coal - Colombia
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- PNOC Exploration Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Trasteel International SA, Italy
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- McConnell Dowell - Australia
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Xindia Steels Limited - India
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- Indogreen Group - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Anglo American - United Kingdom
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Marubeni Corporation - India
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
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