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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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Wednesday, 17 February 16
TAP ON OPPORTUNITIES IN GROWING ELECTRICITY DEMAND AND NEW COAL POWER PROJECT DEVELOPMENTS IN THE PHILIPPINES - IBC
Tap on Opportunities in Growing Electricity Demand and New Coal Power Project Developments in the Philippines
Coal Power Generation 2016
19- ...
Wednesday, 17 February 16
THE OWNERS FACING HISTORICAL LOW DRY BULK RATES; COAL IMPORTS TO CHINA IS STILL POINTING TO A STRONG TREND OF DECLINING CONSUMPTION
The sharp fall in dry bulk rates that has been taking place since the end of last year and has left owners facing historical low rates for a substa ...
Monday, 15 February 16
CALL THE DOCTOR! SHIPPING'S MEDICAL DRAMA UNFOLDS......- CLARKSONS
The recycling market has started 2016 with a bang, with a huge volume of tonnage heading to demolition facilities. Many of the key shipping markets ...
Monday, 15 February 16
CS 42 COAL INDEX ROSE 0.07% WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.15 percent week over week to averaging $38.96 per ton on this past Friday, ...
Monday, 15 February 16
BALTIC INDEX MARGINALLY ROSE BY A POINT D-D; CAPESIZE INDEX DOWN 13 POINTS W-W; PANAMAX INDEX UP 29 POINTS W-W
COALspot.com: The freight markets continued to fall this past week.
The BDI, The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measu ...
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Showing 2561 to 2565 news of total 6871 |
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- Kumho Petrochemical, South Korea
- Metalloyd Limited - United Kingdom
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Energy Link Ltd, New Zealand
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Eastern Coal Council - USA
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Binh Thuan Hamico - Vietnam
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- CNBM International Corporation - China
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Kapuas Tunggal Persada - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Malabar Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- Standard Chartered Bank - UAE
- Sarangani Energy Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Eastern Energy - Thailand
- Economic Council, Georgia
- Mjunction Services Limited - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- Planning Commission, India
- Sical Logistics Limited - India
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Kobexindo Tractors - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Minerals Council of Australia
- India Bulls Power Limited - India
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Wilmar Investment Holdings
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Intertek Mineral Services - Indonesia
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- Latin American Coal - Colombia
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- The State Trading Corporation of India Ltd
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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