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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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Thursday, 05 November 15
INFORMATION EXCHANGE GROUP'S LATAM MINING SECURITY SUMMIT 2016 - INTERNATIONAL CONFERENCE ON TECHNOLOGY SECURITY IN MINING
Press Release: LATAM Mining Security Summit 2016 is a carefully designed event that will bring together the leading stakeholders in the mining sect ...
Wednesday, 04 November 15
MARKET INSIGHT - CHRISTOPHER THOMAS WHITTY
Four companies dominate global iron ore production, namely; BHP Billiton, Vale, Rio Tinto, and Fortescue Metals Group. Together these companies con ...
Wednesday, 04 November 15
FOB RICHARDS BAY COAL SWAPS GAIN W-W AND M-M
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q4' 2015 gained week over week and month over month.
The Q4 swap was up US$ 1.4 ...
Tuesday, 03 November 15
THE DISCHARGE OF CARGO IN THE PRC WITHOUT ORIGINAL BILLS OF LADING - CLYDE&CO
KNOWLEDGE TO ELEVATE
On occasions, a vessel may arrive at a port and be ready to discharge but the original bills of lading in respect of the ...
Tuesday, 03 November 15
API 5 FOB NEWCASTLE COAL SWAPS DECLINE CONTINUES
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2015 delivery slid $1.84 per ton (4.34%) month over month to US$ 40.54 per ton. The swap ...
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- Bulk Trading Sa - Switzerland
- International Coal Ventures Pvt Ltd - India
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Banpu Public Company Limited - Thailand
- Coal and Oil Company - UAE
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Posco Energy - South Korea
- Ceylon Electricity Board - Sri Lanka
- Globalindo Alam Lestari - Indonesia
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- Mercator Lines Limited - India
- MS Steel International - UAE
- Indian Energy Exchange, India
- Ind-Barath Power Infra Limited - India
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Wilmar Investment Holdings
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Economic Council, Georgia
- VISA Power Limited - India
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Salva Resources Pvt Ltd - India
- Eastern Coal Council - USA
- Kideco Jaya Agung - Indonesia
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- Grasim Industreis Ltd - India
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Sidhee Cement - India
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- Simpson Spence & Young - Indonesia
- Ambuja Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Jaiprakash Power Ventures ltd
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Central Electricity Authority - India
- Bharathi Cement Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- Manunggal Multi Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Kaltim Prima Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- Oldendorff Carriers - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Cement Manufacturers Association - India
- Indika Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- Energy Link Ltd, New Zealand
- TeaM Sual Corporation - Philippines
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- SMG Consultants - Indonesia
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- Larsen & Toubro Limited - India
- Lanco Infratech Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- Petron Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Deloitte Consulting - India
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
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