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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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Thursday, 10 March 16
IT FEELS SAFE TO SAY THAT THE MARKET IS SLOWLY AND PAINFULLY REGAINING ITS BALANCE
With the BDI marking its third consecutive positive weekly closing, it feels safe to say that the market is regaining its balance; slowly and painf ...
Wednesday, 09 March 16
U.S. COAL EXPORTS DECLINED 24% (74 MMST) IN 2015; COAL PRODUCTION IS EXPECTED TO DECREASE BY 111 MMST IN 2016 - EIA
U.S. Coal Supply
EIA estimates that U.S. coal production for February 2016 was 54 million short tons (MMst), a 4 MMst (7%) decrease from the prev ...
Wednesday, 09 March 16
RI MAY HAVE TO IMPORT COAL FOR FUTURE POWER PLANTS: STUDY - THE JAKARTA POST
With coal prices continuing to decline, Indonesia will struggle to provide the coal needed to fire up its power stations in the near future, a stud ...
Tuesday, 08 March 16
INDONESIA HIKES COAL BENCHMARK PRICE FOR THE FIRST TIME IN 12 MONTHS
COALspot.com: Low coal demand and excess supplies sent Indonesian benchmark coal price further deep in February 2016, but up slightly in Mar ...
Tuesday, 08 March 16
THE DRY CARGO MARKET ENDURED ONE OF ITS MOST DIFFICULT YEARS IN 2015, EXPERIENCING LOWS NOT SEEN SINCE THE MID 1980S - CLARKSONS
Whilst shipping and offshore markets have seen some good opportunities during 2015, overall there have been unprecedented challenges, so we are ver ...
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Showing 2531 to 2535 news of total 6871 |
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- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Altura Mining Limited, Indonesia
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- MS Steel International - UAE
- Malabar Cements Ltd - India
- Parliament of New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Singapore Mercantile Exchange
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
- Uttam Galva Steels Limited - India
- Marubeni Corporation - India
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- IEA Clean Coal Centre - UK
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Dalmia Cement Bharat India
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Makarim & Taira - Indonesia
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- PNOC Exploration Corporation - Philippines
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- Australian Coal Association
- Sakthi Sugars Limited - India
- Central Java Power - Indonesia
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Sinarmas Energy and Mining - Indonesia
- Simpson Spence & Young - Indonesia
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Coalindo Energy - Indonesia
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- Salva Resources Pvt Ltd - India
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Commonwealth Bank - Australia
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Minerals Council of Australia
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Sical Logistics Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- Bayan Resources Tbk. - Indonesia
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Intertek Mineral Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- GVK Power & Infra Limited - India
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Australian Commodity Traders Exchange
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Vedanta Resources Plc - India
- Edison Trading Spa - Italy
- Global Coal Blending Company Limited - Australia
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
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