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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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Friday, 13 November 15
DRY BULK, IT IS HARD TO MAINTAIN AN OPTIMISTIC VIEW FOR THE NEXT COUPLE OF MONTHS - INTERMODAL
COALspot.com: The dry bulk owners looking for cover remained under pressure for size segments across the board. With Capes closing off the week as ...
Friday, 13 November 15
WEEKLY US COAL PRODUCTION DECLINES TO 16.5 MMST; SLIDE 14.9% Y-Y: EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 16.5 million shor ...
Thursday, 12 November 15
FOREIGN COAL MINE ACQUISITION - STRATEGY VERSUS OPPORTUNITY FOR INDIAN UTILITIES - DIPESH DIPU
The acquisition market for thermal coal assets abroad is dull. Sellers of all hues are in the market; some are actively scouting for buyers while o ...
Thursday, 12 November 15
PORT OF NEWCASTLE'S COAL EXPORT VOLUME UP IN OCTOBER 2015
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $1.254 billio ...
Wednesday, 11 November 15
Q3' 16 RICHARDS BAY COAL SWAP LOST 15.47% SINCE 6 AUGUST; 18.65% SINCE 6 MAY
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q1’ 2016 declined week over week and month over month.
The Q1’ 2016 &nb ...
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Showing 2716 to 2720 news of total 6871 |
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- Indian Oil Corporation Limited
- Eastern Coal Council - USA
- Asmin Koalindo Tuhup - Indonesia
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Ind-Barath Power Infra Limited - India
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- Merrill Lynch Commodities Europe
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Mercator Lines Limited - India
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Wood Mackenzie - Singapore
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- Meralco Power Generation, Philippines
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Singapore Mercantile Exchange
- Neyveli Lignite Corporation Ltd, - India
- Iligan Light & Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Planning Commission, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CNBM International Corporation - China
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- Star Paper Mills Limited - India
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Indogreen Group - Indonesia
- Orica Mining Services - Indonesia
- The Treasury - Australian Government
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Independent Power Producers Association of India
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- Parliament of New Zealand
- Siam City Cement PLC, Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- Ambuja Cements Ltd - India
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- Minerals Council of Australia
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Interocean Group of Companies - India
- VISA Power Limited - India
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Australian Coal Association
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Wilmar Investment Holdings
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- PNOC Exploration Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Chamber of Mines of South Africa
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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