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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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Thursday, 28 January 16
WHAT ARE THE PROSPECTS FOR COAL IN LIGHT OF THE PARIS CLIMATE AGREEMENT? - GERMAN COAL IMPORTERS ASSOCIATION
This depends – says the VDKi – to a very great extent on who you want to believe more, the United Nations or the International Energy A ...
Thursday, 28 January 16
RICHARDS BAY COAL SWAPS FOR Q1,Q2 AND Q3 DELIVERIES FIRM THIS PAST WEEK
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap rose month over month and week over week.
The Q1’ 2016 FOB Richards Bay Coa ...
Wednesday, 27 January 16
API 5 FOB NEWCASTLE COAL SWAPS CLOSE MIXED
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery rose another $1.17 per ton (3.13%) this past week compared to the sam ...
Wednesday, 27 January 16
CHINA'S STALLING ECONOMY HAS HAD A GREAT EFFECT ON VARIOUS COMMODITIES; DECREASED DEMAND DRIVING COMMODITY PRICES LOWER AND LOWER - LINOS ALEXANDROS KOGEVINAS
Having gone through the first few weeks of 2016, it’s starting to look like another challenging year is ahead of us. Hopes for a recovery in ...
Wednesday, 27 January 16
WORLD HARD COAL PRODUCTION AND CONSUMPTION DECLINE IN 2015 FOR THE FIRST TIME IN OVER A DECADE - VDKI
COALspot.com: Seaborne hard coal trade and the changes in this area were decisively affected by China and India - VDKi.
China bears the g ...
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Showing 2586 to 2590 news of total 6871 |
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- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- LBH Netherlands Bv - Netherlands
- Independent Power Producers Association of India
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- SMC Global Power, Philippines
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Samtan Co., Ltd - South Korea
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- India Bulls Power Limited - India
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Parliament of New Zealand
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- Planning Commission, India
- McConnell Dowell - Australia
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- Central Electricity Authority - India
- Bukit Asam (Persero) Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Electricity Generating Authority of Thailand
- Krishnapatnam Port Company Ltd. - India
- TeaM Sual Corporation - Philippines
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Siam City Cement PLC, Thailand
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- VISA Power Limited - India
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Vedanta Resources Plc - India
- Jorong Barutama Greston.PT - Indonesia
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- Tata Chemicals Ltd - India
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- The University of Queensland
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