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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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- Anglo American - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- Global Green Power PLC Corporation, Philippines
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- Pendopo Energi Batubara - Indonesia
- Global Coal Blending Company Limited - Australia
- Petron Corporation, Philippines
- Lanco Infratech Ltd - India
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Bahari Cakrawala Sebuku - Indonesia
- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Central Electricity Authority - India
- Ministry of Mines - Canada
- GMR Energy Limited - India
- The Treasury - Australian Government
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- Australian Coal Association
- Planning Commission, India
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Baramulti Group, Indonesia
- Port Waratah Coal Services - Australia
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- PTC India Limited - India
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Indian Energy Exchange, India
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- Simpson Spence & Young - Indonesia
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- Coal and Oil Company - UAE
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Makarim & Taira - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Edison Trading Spa - Italy
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- Ambuja Cements Ltd - India
- Riau Bara Harum - Indonesia
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Aditya Birla Group - India
- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- Oldendorff Carriers - Singapore
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
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