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Monday, 25 January 16
SHOULD A DEFAULTING PARTY BE ENTITLED TO AN INNOCENT PARTY'S SAVING, FOLLOWING THEIR BREACH OF CONTRACT? - THE NEW FLAMENCO REVISITED
 KNOWLEDGE TO ELEVATE
This case was addressed by the club in our of January 2015, when the High Court decision became available. The background facts to the case are set out in detail in our earlier article, but to summarise briefly, the New Flamenco was time chartered to the charterer from February 2004 to November 2009. In breach of the charterparty terms, the charterer redelivered the ship two years early, in October 2007. Since there was no available charter market for a substitute fixture, the owner took the commercial decision to sell the ship in 2007. The owner subsequently commenced arbitration proceedings, claiming for the net loss of profit that they would have earned during the remaining two years of the charter. Later it became apparent, however, that due to the global financial crisis in late 2008 there was a significant difference in the value of the ship between late 2007 and late 2009 and the owner may well have benefitted from the early redelivery. Indeed, the sale price achieved by the owner was some $16.8m more than the value of the ship in November 2009. The owner’s claim for damages amounted to €7.6m, so if this benefit were to be taken into account then the owner’s claim would disappear in its entirety.
The London tribunal found that the sale was directly caused by the charterer’s early redelivery and, seeing no reason why capital savings should not be taken into account in considering the owner’s losses, the tribunal held that the charterer was entitled to the benefit. Whilst perhaps viewed as unfair by some, it should be remembered that it is normal practice when there is a breach of charter (voyage or time) for the court to take into account any income made on a mitigation voyage, and deduct this from the claim under the (wrongfully terminated) charter. So, why treat capital savings differently from savings in income?
Nevertheless, the High Court (on appeal from the tribunal) reversed this decision. The High Court held on the one hand that there was no need to treat savings in income differently from capital savings; however, on the other, the High Court held that there was no direct causal link between, here, the breach of time charter and the benefits obtained in the commercial sale of the ship. Instead, the High Court held that whilst the early redelivery may have ‘triggered’ the owner’s sale, the capital savings obtained by the owner arose from its own commercial decision to sell the ship. The charterer appealed this decision to the English Court of Appeal.
Court of Appeal decision
The Court of Appeal has, in its recent decision, unanimously overturned the High Court decision. In so doing, the owner’s claim for damages has failed in its entirety. In giving judgment, the Court of Appeal referred to the leading authority on mitigation British Westinghouse[2], confirming the important principle that where a measure taken by a claimant, in mitigation of loss and arising out of the consequences of a defendant’s breach in the ordinary course of business, results in a benefit to the claimant, that benefit is normally to be brought into account in assessing the claimant’s loss unless the measure is wholly independent of the relationship of the claimant and defendant.
Importantly, the Court of Appeal found that there was no available market for this ship upon its early redelivery and, in these circumstances, it was not easy to see why the benefit (if any) an owner obtained from selling the ship in question should not be brought into the calculation of permitted damages, especially when the benefit obtained from fixing the same ship on the spot market would have been taken into account. The absence of the available market was important as, if there had been an available market to re-fix the ship, then the owner’s decision in this case to instead sell the ship could arguably be said to have been independent of the contractual relationship between the parties and, therefore, should not be taken into account.
Conclusion
The overriding principle under English law, governing damages for breach of contract, is the compensatory principle i.e. the law attempts to put the injured party back in the position they would have been in had the contract been properly performed. Therefore, the usual measure of damages available to an owner when a charterer walks away from a contract is the amount of freight or hire which would have been earned, less running expenses, (the profit) less what the ship actually earned during that same period (the voyage(s) made in mitigation). The New Flamenco is not deviating from the compensatory principle. Indeed in this case the owner was compensated for his actual losses following the contract breach, which just happened to be none on this occasion.
However, each case will, as ever, turn on its particular facts which always need to be carefully considered. In the New Flamenco the important factor was the absence of an available market to re-charter the ship when it was redelivered to the owner early.
Source: The Standard Club
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Monday, 01 February 16
INDONESIA'S SECOND LARGEST COAL MINER ADARO ENERGY HAS PRODUCED 51.46 MT IN 2015; 8% LOWER COMPARED TO FY14
COALspot.com: Adaro Energy, the Indonesia’s second largest coal producer by volume has produced 51.46 Mt in 2015, 8% lower compared to ...
Sunday, 31 January 16
BDI CONTINUED ITS FALL AND CLOSE AT A FRESH RECORD LOW ON FRIDAY
COALspot.com: The Baltic Dry Index, which gauges the cost of shipping dry bulk including iron ore, cement, grain, coal and fertilizer, continued it ...
Friday, 29 January 16
INDONESIAN BENCHMARK COAL PRICE SETTLES DOWN $ 0.31, OR 0.58%, AT $ 53.20 A TON
COALspot.com: Low coal demand and excess supplies sent Indonesian benchmark coal price further down in January 2016. HBA has slumped by 0.58 ...
Friday, 29 January 16
U.S. COAL PRODUCTION OFF 2 PERCENT FROM LAST WEEK - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 13.1 milli ...
Thursday, 28 January 16
COAL REMAINS THE NO.1 FUEL FOR POWER GENERATION - EXXONMOBIL
COALspot.com: Energy demand trends from 2010 to 2040 are expected to vary significantly around the world, as countries move along very different tr ...
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- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- The University of Queensland
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Wilmar Investment Holdings
- MS Steel International - UAE
- Xindia Steels Limited - India
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- Baramulti Group, Indonesia
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- ASAPP Information Group - India
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sakthi Sugars Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Planning Commission, India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- White Energy Company Limited
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Economic Council, Georgia
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- Ministry of Mines - Canada
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Indian Oil Corporation Limited
- IEA Clean Coal Centre - UK
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- Barasentosa Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Trasteel International SA, Italy
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