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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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Friday, 22 January 16
WEEKLY US COAL PRODUCTION ESTIMATES ALMOST FLAT
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 13.3 million shor ...
Friday, 22 January 16
COAL PRICES TO REMAIN UNDER PRESSURE THIS YEAR
COALspot.com: Indonesian coal swap delivery Q1 2016 declined month on month and week over week. The falling trend of prices for coal was continuing ...
Friday, 22 January 16
Q3' 16 FOB RICHARDS BAY COAL SWAP CLOSED AT $ 40.80; DECLINE $ 2.80 M-O-M
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap up month over month and decline week over week.
The Q1’ 2016 FOB Richards B ...
Wednesday, 20 January 16
Q3'16 FOB NEWCASTLE COAL SWAP CLOSED $ 2.40 LESSER THAN Q1'16 CLOSING PRICE OF $ 38.10
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery rose another $0.77 per ton (2.06%) this past week compared to the sam ...
Wednesday, 20 January 16
SHIPPING MARKET INSIGHT - NASOS SOULAKIS
If you believe in the “January effect”, the theory according to which the beginning of a new year has a positive effect on financial in ...
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Showing 2596 to 2600 news of total 6871 |
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- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Mercuria Energy - Indonesia
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- Binh Thuan Hamico - Vietnam
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- Orica Mining Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- PTC India Limited - India
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Ind-Barath Power Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- The University of Queensland
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Tata Chemicals Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Bhatia International Limited - India
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Bukit Makmur.PT - Indonesia
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Independent Power Producers Association of India
- Vedanta Resources Plc - India
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Heidelberg Cement - Germany
- ASAPP Information Group - India
- Australian Coal Association
- Indika Energy - Indonesia
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- ICICI Bank Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Thiess Contractors Indonesia
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Parliament of New Zealand
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- Georgia Ports Authority, United States
- Riau Bara Harum - Indonesia
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Planning Commission, India
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Economic Council, Georgia
- MS Steel International - UAE
- SMC Global Power, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- Cement Manufacturers Association - India
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Madhucon Powers Ltd - India
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Baiduri Energy - Indonesia
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