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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, 16 November 15
KOMIPO INVITES BIDS FOR 1.295 MILLION TONS OF BITUMINOUS COAL FOR Q1 - Q2'16
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 1,295,000 Metric Tons (MT) of minimum 4,600 kc ...
Monday, 16 November 15
SOUTH CHINA COAL SWAPS DECLINE CONTINUES THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 6.05 (12.59%) per ton month over month.
A commodity swa ...
Monday, 16 November 15
CLARKSEA INDEX COMPETITION: IS IT ALL IN THE TIMING? - CLARKSONS
Readers of the Shipping Intelligence Weekly are invited each year to predict the value of the ClarkSea Index one year ahead in the first week of No ...
Monday, 16 November 15
DRY BULK MARKET: Q1' 2016 SHAPING UP TO BE A ' DISASTROUS' ONE OF PROJECTED LOWER IRON ORE IMPORTS FROM CHINA
Over the course of the past year or so, it’s been the drop of coal imports from China, which has had a detrimental effect on the course of dr ...
Friday, 13 November 15
WEAK CHINA POWER DEMAND DAMPENS COAL CONSUMPTION - FITCH
The weak growth in China's electricity consumption in 2015, together with increasing non-thermal power generation capacity are exerting more pr ...
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Showing 2711 to 2715 news of total 6871 |
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- The University of Queensland
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- Tamil Nadu electricity Board
- PTC India Limited - India
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- Sakthi Sugars Limited - India
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- London Commodity Brokers - England
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Economic Council, Georgia
- Independent Power Producers Association of India
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- PNOC Exploration Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- Attock Cement Pakistan Limited
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Energy Link Ltd, New Zealand
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- Oldendorff Carriers - Singapore
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Kepco SPC Power Corporation, Philippines
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Heidelberg Cement - Germany
- Ministry of Transport, Egypt
- MS Steel International - UAE
- Renaissance Capital - South Africa
- TeaM Sual Corporation - Philippines
- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- Singapore Mercantile Exchange
- Kobexindo Tractors - Indoneisa
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Barasentosa Lestari - Indonesia
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