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