We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Friday, 18 December 15
WHEN IS A MASTER ENTITLED TO REFUSE DAMAGED CARGO? A REMINDER - THE STANDARD CLUB
 KNOWLEDGE TO ELEVATE
A master’s authority to clause bills of lading issued by or on his behalf can sometimes become the cause of disagreement between shippers, charterers and carriers.
Under Article III Rule 3 of the Hague/Hague Visby Rules after receiving the cargo, and on the demand of the shipper, the master is obliged to issue a bill of lading evidencing the quantity and apparent order and condition of goods to be carried.
The buyer of cargo, the consignee in an international trade, will want the subject bill of lading to be accurate and contain unambiguous remarks as to the quantity, quality and condition of the said cargo – so he knows exactly what he is purchasing. Conversely, the shipper/seller will primarily want a clean bill of lading to be issued, in order to trigger payment under the subject letter of credit.
On the other hand the master/carrier, to protect himself, may very well want to insert a clause in the subject bill of lading that better describes the condition of the cargo; otherwise he may be concerned that he will be subject to a claim by the lawful holder of the bill for ‘damaged’ goods at destination.
The master’s rights / obligations
Whilst under many time charterers there is usually a contractual provision which states the master is obliged to sign bills ‘as presented’, where the master is presented with a bill of lading, for signing, which the master has reasonable grounds for suspecting contains factual inaccuracies as to the subject cargo, such as an incorrect description as to the cargo’s condition, the master is generally under no obligation to sign it.
However, and practically speaking, he will often be under extreme commercial pressure to issue clean bills in exchange for a letter of indemnity (LOI) from his charterer. The problem the master/carrier has in these circumstances is that such a LOI may well be unenforceable, as a court could consider the indemnity to be perpetrating a fraud against the lawful bill of lading holder – certainly if the bill of lading inaccurately records the apparent order and condition of the cargo.
It should also be mentioned that there will be club cover implications where a master or member issues a bill of lading with knowledge that it contains an incorrect statement as to the quantity, quality or condition of cargo loaded on board the ship.
In these circumstances, provided the master has reasonable grounds for suspecting the quantity, quality or condition of the cargo loaded on board the ship and described in the bill is inaccurate, he may refuse to sign the bill of lading ‘as presented’. However, if the master unreasonably refuses to sign or authorise the issue of such a bill of lading he runs the risk of being in breach of Article III of the Hague/Hague-Visby Rules and possibly also liable to his charterer (under the subject charter) for any delay and consequent costs/losses down the chain.
What constitutes a reasonable refusal will, as with all things, turn on the particular facts of the case. However, the English courts handed down some useful guidance in The Boukadoura.
Here there was a difference between the shore and ship figures of about 1%. The master was prepared to put both the ship and the shore figures on the bill of lading, but the shippers refused and insisted on the shore figures being so inserted. In an attempt to resolve the dispute a second draft survey was carried out by an independent surveyor. This confirmed the ship’s figures, but the shippers nonetheless refused to accept a bill of lading showing the ship’s figures. Ultimately, and after considerable delay, a bill of lading based on the ship’s figures was issued and the cargo was carried to its destination and discharged, without any shortage claim. The charterer however subsequently claimed for the time lost due to the delay at the load port. Although the charterparty provided for bills of lading to be issued by the master ‘as presented’ the court agreed that the master was only obliged to issue a bill lading for the quantity of cargo he reasonably believed to have been so loaded.
Concluding remarks
There are no clear-cut guidelines to determine when, or if, a master can reasonably refuse to issue a bill of lading if he considers the quantity (or quality, condition) of cargo as shown on the bill to be inaccurate. Each case will turn on its own facts and also largely depend on expert evidence. Further, and somewhat irrespective of the law of the subject charterparty, the location and law of the load port will play an important role in any ‘budding’ dispute. Therefore, as soon as a master is aware of a problem in this respect, it is vital that he contacts the club and/or club’s local correspondent for advice and guidance (ideally with personal attendance of an expert surveyor on board) before any dispute escalates.
On a slightly different point, the charterparty may provide for the issuance of a clean bill of lading and/or give the master the right to reject any cargo that is subject to ‘clausing’ . This was the case in The Sea Success.
The ship here was under an amended NYPE timecharter according to which the master had the right to reject ‘any cargo that is subject to clausing of the bills of lading’.
The shippers tendered damaged steel cargo and the master rejected the same on the basis that it was subject to clausing of the bills. The charterers argued that the bills, as presented to the master, contained a complete and accurate description of the (damaged) cargo according to the findings of a preloading steel survey report and this didn’t amount to ‘clausing’. Indeed, in this case there was no dispute between the owners, charterers and shippers as to the apparent order and condition of the subject cargo, or the appropriate description of the cargo to be included in the bill of lading by the shipper.
The English High Court in this case held that the word ‘clausing’ meant a notation on the bill of lading by the master or his agents, which qualified already existing statements on the bill of lading as to the quality, quantity and apparent condition of the goods. Therefore, only if the master had to make an additional notation on the bill, to reconcile the description of the goods with the statements already on the bill as to its apparent good order and condition, then the same cargo was subject to ‘clausing’ and the master would be entitled and obliged to reject the same – as per the terms of this subject charter.
This article intends to provide general guidance on the issues arising. It is not intended to provide legal advice in relation to any specific query. The law is also not static. If in doubt, The Standard Club is always on hand to assist.
Source: The Standard Club
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Monday, 04 April 16
INDONESIA CS57 COAL INDEX SLIDES SLIGHTLY WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin fell 0.07 percent week over week to averaging $38.88 per ton on this past Friday, ac ...
Monday, 04 April 16
CAPE INDEX JUMPED 70% WEEK ON WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to rose this week.
The freight market was ...
Friday, 01 April 16
ASSESSING THE DRY BULK MARKET AT ROCK BOTTOM - CLARKSONS
While the opening months of the year are typically a weak period for the dry bulk market, the downturn so far this year has been severe. Earnings h ...
Friday, 01 April 16
NINE AM - TIME TO GET AN INDONESIAN LANGUAGE VERSION OF YOUR CHARTERPARTIES - CLYDE & CO
KNOWLEDGE TO ELEVATE
For several years, Indonesian law (Article 31, Law Number 24 of 2009) has required that memoranda of understanding (" ...
Friday, 01 April 16
U.S. COAL PRODUCTION UP SLIGHTLY WEEK OVER WEEK - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 11.6 million shor ...
|
|
|
Showing 2496 to 2500 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Mercuria Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- Banpu Public Company Limited - Thailand
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Orica Mining Services - Indonesia
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- PNOC Exploration Corporation - Philippines
- Meralco Power Generation, Philippines
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Coal and Oil Company - UAE
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- Merrill Lynch Commodities Europe
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Minerals Council of Australia
- Planning Commission, India
- Renaissance Capital - South Africa
- London Commodity Brokers - England
- Indian Oil Corporation Limited
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- ASAPP Information Group - India
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- Uttam Galva Steels Limited - India
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- South Luzon Thermal Energy Corporation
- Mintek Dendrill Indonesia
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Indogreen Group - Indonesia
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Meenaskhi Energy Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Electricity Authority, New Zealand
- Africa Commodities Group - South Africa
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- MS Steel International - UAE
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- The University of Queensland
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- India Bulls Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Baramulti Group, Indonesia
- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- Singapore Mercantile Exchange
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
|
| |
| |
|
