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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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Monday, 23 November 15
NEGATIVE 2016 OUTLOOK FOR WESTERN EUROPEAN STEEL - SAYS FITCH RATINGS
COALspot.com: European steel in 2016 are both negative for the sector and for issuer ratings.
This reflects our expectation that import levels ...
Monday, 23 November 15
DRY BULK MARKET: NET FLEET GROWTH IS SLOWING DOWN, AS SHIP OWNERS ARE LOOKING FOR WAYS TO ALLEVIATING MARKET MELTDOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been in “meltdown” mode for a few weeks now, unable to find support and avoid the fall in historical lows. As s ...
Monday, 23 November 15
CS50 COAL INDEX CLOSED AT $40.27 PER TON; FELL 0.15% FROM LAST WEEK
COALspot.com: The 5700 GAR CS (i) coal index fell by US cents 3 per ton week over week on 20 November 2015. CS 57 (5700 GAR coal) index closed at U ...
Monday, 23 November 15
CFR SOUTH CHINA COAL SWAPS FALL FURTHER ON LOW DEMAND
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 6.75 (13.99%) per ton month over month.
A commodity swa ...
Sunday, 22 November 15
INDONESIA TO INDIA FREIGHT RATES TO REMAIN DULL NEXT WEEK
COALspot.com: The BDI was down to historical lows closing at 498 points which is down by almost 95.77 per cent compared to 11,800 points in 2008.
...
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Showing 2696 to 2700 news of total 6871 |
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- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Wilmar Investment Holdings
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Economic Council, Georgia
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kobexindo Tractors - Indoneisa
- Essar Steel Hazira Ltd - India
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- AsiaOL BioFuels Corp., Philippines
- Indonesian Coal Mining Association
- Banpu Public Company Limited - Thailand
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- South Luzon Thermal Energy Corporation
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- Bangladesh Power Developement Board
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- International Coal Ventures Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Ministry of Mines - Canada
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- Minerals Council of Australia
- Medco Energi Mining Internasional
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- PowerSource Philippines DevCo
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- Kaltim Prima Coal - Indonesia
- Xindia Steels Limited - India
- Australian Coal Association
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- CNBM International Corporation - China
- Manunggal Multi Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- CIMB Investment Bank - Malaysia
- Iligan Light & Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Dalmia Cement Bharat India
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Semirara Mining Corp, Philippines
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Leighton Contractors Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
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