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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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Tuesday, 05 January 16
THE SHIPPING MARKET IN 2015 AND LOOKING FORWARD - BIMCO
Global economy: menacing clouds in the sky cast a shadow on global economic developments 2015 never really took off, even though the global economi ...
Tuesday, 05 January 16
4200 GAR COAL INDEX FALL TOWARD $27;SLIPPED 28.05% YEAR-TO-DATE
COALspot.com: Average 5000 GAR coal index has not moved in the past week, averaging $40.12 per ton on last Thursday, according to CS (i) Coal Index ...
Monday, 04 January 16
CFR SOUTH CHINA COAL SWAP REMAIN FLAT OVER CHRISTMAS & NEW YEAR HOLIDAYS
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery rose US$ 0.68 (1.64%) per ton month over month.
A commodity swap is ...
Friday, 01 January 16
FOB INDONESIA COAL SWAP FOR Q1'16 DELIVERY CLOSED AT $36.75 PER TON
COALspot.com: Indonesian coal swap delivery Q1 2016 declined month on month but flat week over week.
According to AsiaClear OTC coal swap' ...
Thursday, 31 December 15
COAL PRICES FELL ON WEAK DEMAND
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap decline month over month and slightly up week over week.
The Q1’ 2016 ...
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Showing 2626 to 2630 news of total 6871 |
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- Antam Resourcindo - Indonesia
- Indonesian Coal Mining Association
- Altura Mining Limited, Indonesia
- Carbofer General Trading SA - India
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- The University of Queensland
- Baramulti Group, Indonesia
- Indian Energy Exchange, India
- Xindia Steels Limited - India
- Ministry of Transport, Egypt
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Latin American Coal - Colombia
- Meralco Power Generation, Philippines
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- Gujarat Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Posco Energy - South Korea
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Videocon Industries ltd - India
- Karbindo Abesyapradhi - Indoneisa
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- Iligan Light & Power Inc, Philippines
- SMG Consultants - Indonesia
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Australian Coal Association
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Mercator Lines Limited - India
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Ministry of Finance - Indonesia
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Edison Trading Spa - Italy
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
- Planning Commission, India
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Electricity Authority, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Georgia Ports Authority, United States
- London Commodity Brokers - England
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Interocean Group of Companies - India
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- Cigading International Bulk Terminal - Indonesia
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