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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
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Friday, 11 March 16
ADANI GLOBAL BAGS 0.26 MILLION TONS OF COAL CONTRACT FROM LANKA COAL COMPANY
COALspot.com: Lanka Coal Company (Private) Limited, Sri Lanka has awarded 260,000 +/- 10% tons of Power plant 6300 GAR calorific value coal to Adan ...
Friday, 11 March 16
US WEEKLY COAL PRODUCTION DOWN BY 0.5 MMST
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 12.6 million shor ...
Friday, 11 March 16
FORTESCUE'S MOU WITH VALE COULD STRENGTHEN ITS BUSINESS PROFILE - FITCH
COALspot.com: Fitch Ratings says that Australia-based Fortescue Metals Group Limited's (BB+/Negative) memorandum of understanding (MOU) with Br ...
Thursday, 10 March 16
CHINA'S NEW POLICY PLAN COULD BE POSITIVE FOR SHIPPING, BUT TARGETS SEEM RATHER AMBITIOUS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
China set out its new policy plan during the course of the past weekend, but it seems to have set some very ambitious goals, which could be difficu ...
Thursday, 10 March 16
U.S. COAL EXPORTS DECLINED 23% IN 2015, AS COAL IMPORTS REMAINED STEADY
COALspot.com: The United States remains a net exporter of coal, exporting 74.0 million short tons (MMst) and importing 11 MMst in 2015.
Accord ...
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Showing 2526 to 2530 news of total 6871 |
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- CNBM International Corporation - China
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Anglo American - United Kingdom
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Lanco Infratech Ltd - India
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Australian Coal Association
- Sical Logistics Limited - India
- Bhatia International Limited - India
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Deloitte Consulting - India
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- Kalimantan Lumbung Energi - Indonesia
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- India Bulls Power Limited - India
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- Bahari Cakrawala Sebuku - Indonesia
- PTC India Limited - India
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Sarangani Energy Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- Planning Commission, India
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Vedanta Resources Plc - India
- The Treasury - Australian Government
- Uttam Galva Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Energy Link Ltd, New Zealand
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- GMR Energy Limited - India
- Mintek Dendrill Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- LBH Netherlands Bv - Netherlands
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Marubeni Corporation - India
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- SMG Consultants - Indonesia
- Indonesian Coal Mining Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Baramulti Group, Indonesia
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
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