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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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Friday, 08 January 16
DRY BULK MARKET'S CRISIS DEEPENS AS RATES ARE DROPPING TO NEW RECORD LOWS BY THE DAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Just when you would think that the dry bulk market is reaching its bottom, even as it has long surpassed all-time lows, each day that passes by at ...
Thursday, 07 January 16
FOB NEWCASTLE COAL SWAPS DELIVERY Q1'16 REMAIN FLAT W-O-W; UP M-O-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery rose another $1.23 per ton (3.35%) this past week compared to the sam ...
Thursday, 07 January 16
SHIPPING WILL REMAIN VOLATILE AND INDISPENSABLE IN 2016 - MOORE STEPHENS
The ultimate definition of an optimist has been characterised as an accordion player with an answerphone. Such extreme optimism might be difficult ...
Wednesday, 06 January 16
NEW COAL PRICE PASS-THROUGH REGULATION BENEFITS CHINA IPPS - FITCH RATINGS
Fitch Ratings says the new Coal Price Pass-through Mechanism announced by the National Development and Reform Commission (NDRC) on 31 December ...
Tuesday, 05 January 16
BIG COAL MINERS PLAN HIGHER PRODUCTION THIS YEAR - THE JAKARTA POST
The country’s major coal miners plan to further boost production in 2016 although analysts estimate that an oversupply in the world’s c ...
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Showing 2621 to 2625 news of total 6871 |
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- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Mjunction Services Limited - India
- Singapore Mercantile Exchange
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Xindia Steels Limited - India
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- Central Electricity Authority - India
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Orica Mining Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Deloitte Consulting - India
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Kideco Jaya Agung - Indonesia
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- CIMB Investment Bank - Malaysia
- Pendopo Energi Batubara - Indonesia
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- White Energy Company Limited
- Savvy Resources Ltd - HongKong
- Dalmia Cement Bharat India
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- The State Trading Corporation of India Ltd
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- Renaissance Capital - South Africa
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Kepco SPC Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- The University of Queensland
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Trasteel International SA, Italy
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Antam Resourcindo - Indonesia
- India Bulls Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Wilmar Investment Holdings
- Salva Resources Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Minerals Council of Australia
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Attock Cement Pakistan Limited
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
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