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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, 08 December 15
Q1' 16 API 5 FOB NEWCASTLE COAL SWAP CLOSED AT $ 36.73 A TON; 1.73% HIGHER COMPARED TO Q3' 16 PRICE
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery slid $1.47 per ton (3.85%) month over month to US$ 36.73 per ton. The swap ...
Monday, 07 December 15
5000 GAR CS (I) COAL INDEX REMAIN THE SAME OVER LAST WEEK
COALspot.com: The 5000 GAR CS (i) coal index remain the same over last week.
According to the CS (i) coal (system generated) index, the CS 50 ...
Monday, 07 December 15
COAL DEMAND IN 2016 FAILS TO SUPPORT PRICES; CFR SOUTH CHINA COAL SWAPS SEEN AT $US 42 A TON
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 1.70 (3.88%) per ton month over month.
A commodity swap ...
Sunday, 06 December 15
THE BDI DECLINED BY 3.09 PERCENT TO 563 POINTS ON 4 DECEMBER
COALspot.com: The BDI declined by 3.09 percent to 563 points on 4 December 2015.
The Cape index was also declined by 10.01 percent to 890 poin ...
Sunday, 06 December 15
DRY BULK MARKET ON REVERSE MODE, SET TO BREAK NEW ALL-TIME LOWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been the negative “star” of the shipping industry for quite some time. In fact if it wasn’t for the boomi ...
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- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- Bhatia International Limited - India
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Billiton Holdings Pty Ltd - Australia
- Tamil Nadu electricity Board
- GVK Power & Infra Limited - India
- White Energy Company Limited
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Goldman Sachs - Singapore
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- SN Aboitiz Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Coalindo Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Mintek Dendrill Indonesia
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Lanco Infratech Ltd - India
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- Jorong Barutama Greston.PT - Indonesia
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Coal Association
- Karbindo Abesyapradhi - Indoneisa
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Kartika Selabumi Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- The University of Queensland
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Minerals Council of Australia
- Romanian Commodities Exchange
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