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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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Saturday, 26 December 15
FOB INDONESIA COAL SWAPS KEEP DROPPING
COALspot.com: Indonesian coal swap delivery Q1 2016 declined month on month and week over week.
According to AsiaClear OTC coal swap's rep ...
Friday, 25 December 15
WEEKLY US COAL PRODUCTION ESTIMATES DIP 8.5%
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 14.7 million shor ...
Thursday, 24 December 15
Q3' 16 FOB RICHARDS BAY COAL SWAP SHED US$ 0.60 PER TON OVER WEEK, AND STANDS AT US$ 43.25 PER TON
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap decline month over month and slightly up week over week.
The Q1’ 2016 FOB R ...
Thursday, 24 December 15
GLOBAL MARINE FUEL REGULATIONS COULD SHOCK REFINING AND OIL MARKETS - OPEC | HELLENIC SHIPPING NEWS
IMO regulations call for global standards for sulphur content in marine fuel to be tightened to 0.5% from its present 3.5%. There is uncertainty ov ...
Thursday, 24 December 15
DRY BULKERS' VALUES ARE PLUNGING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Dry bulk carriers’ values are falling across the board, as the fall of freight rates is taking its toll, as is to be expected. In fact, accor ...
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- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- Sarangani Energy Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Altura Mining Limited, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Banpu Public Company Limited - Thailand
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- New Zealand Coal & Carbon
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Australian Coal Association
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Ceylon Electricity Board - Sri Lanka
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Antam Resourcindo - Indonesia
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- Thiess Contractors Indonesia
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- GAC Shipping (India) Pvt Ltd
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- White Energy Company Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Planning Commission, India
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Bhoruka Overseas - Indonesia
- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- SMC Global Power, Philippines
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- Independent Power Producers Association of India
- Cigading International Bulk Terminal - Indonesia
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Petron Corporation, Philippines
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Central Electricity Authority - India
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- Kartika Selabumi Mining - Indonesia
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
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