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Monday, 04 April 16
THE LOADING, AND SUBSEQUENT DISCHARGE, OF UNSAFE NICKEL ORE - ALL TIME TO 'COUNT' - THE STANDARD CLUB
 KNOWLEDGE TO ELEVATE
In a recent, published, London arbitration award the English tribunal has held that all time lost as a result of loading, and then discharging, a confiscated (unsafe) cargo will be for the charterer’s account.
Background facts
Under a contract of affreightment (CoA), the owner was required to carry eight shipments of nickel ore. The ship promptly arrived at the nominated load, with loading commencing the very next day. Loading stopped two weeks later, however, and the local navy issued a confiscation order, resulting in the ship being compounded in a nearby naval base. The confiscation order was issued due to the cargo being mined outside the parameters of the locally granted permits. Only three months later was the ship released to discharge the cargo already on board the ship, which took two more months to complete.
When the ship was released the charterer emailed the owner requiring it to organise the remaining discharge operation. In addition, the charterer advised that it would not provide any cargo for the next shipment. In response, the owner advised the charterer that it had wrongfully repudiated the CoA and claimed, through London arbitration, demurrage for the entire duration of delay.
The Tribunal’s decision
The arbitration tribunal would only consider the claim for demurrage, not the claim for possible wrongful termination.
The charterer’s primary defense to the demurrage claim was based upon the following CoA clause (our emphasis):
‘In case any acts of God, riots, civil commotions, fire or any other causes comprehend in the Force Majeure terms which may delay or prevent to provide the cargo at the port of loading and load/discharge of the cargo, such time lost is not to count as laytime as neither Charterers nor Shipper nor Suppliers nor Receivers shall be liable for any loss of demurrage, unless vessel already on demurrage. Once on demurrage always on demurrage.’
The tribunal found that the above clause did not aid the charterer in its defence. It was held that the confiscation of the ship by the local navy did not fall within the boundaries of ‘any acts of God, riots, civil commotions, fire or any other causes comprehend in force majeure terms’.
Also, the tribunal found that because the subject cargo had been illegally mined, the charterer had failed to meet its primary contractual obligation under the CoA to provide a safe cargo, which could not be ‘excused’ by other contractual defences.
Finally, as the intervention by the navy was after the ship fell on demurrage, it was found that as per the above wording, ‘once on demurrage always on demurrage’, the charterer remained liable for the entire period of detention and delay.
On the other hand, the tribunal refused to accept that the charterer should not be allowed load time. This was on the basis that cargo had been partially loaded. The charterer was therefore allowed laytime, on a pro rata basis, irrespective of it being considered an unsafe cargo.
Concluding remarks
Following the above decision, members acting in a charterer’s capacity should take all precautions to ensure that the cargo to be loaded on board a ship is safe, legal and that all applicable documentation is in order to best prevent similar situations from arising in the future. It should also be noted that if the subject charter includes the phrase ‘once on demurrage, always on demurrage’ the charterer will remain liable for all time used until the load or discharge operation is completed. Charterer members should, therefore, be proactive and continue to use their best efforts to minimize any time lost.
This article intends to provide general guidance on the issues arising as a matter of English law. It is not intended to provide legal advice in relation to any specific query. Members requiring further information on this topic should direct their enquiries to either their usual contact at the club, or to the authors of this article.
Defence cover is, by its very nature, discretionary in that the club must be satisfied as to the merits and quantum of the claim in question and the likelihood of achieving a successful outcome, if it is to lend support.
Source: The Standard Club
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Friday, 19 August 16
U.S. YEAR-TO-DATE COAL PRODUCTION TOTALLED AN ESTIMATED 421.6 MMST
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 15.8 million short ton ...
Thursday, 18 August 16
CAPESIZE: AN EXTREMELY VOLATILE LAST WEEK, WHERE THE MAIN DRIVER HAS BEEN THE WEST AUSTRALIA MARKET
Supramax
The week has held up. After the most of the world is back at work there is some optimism again in the market. The Far East volume has in ...
Tuesday, 16 August 16
WEEKLY CS42 COAL INDEX SOARS 14.08% YEAR TO DATE AMID HIGH DEMAND
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 2.37% week over week to averaging $42.84 per ton this past week, shows CS (i) C ...
Monday, 15 August 16
DRY BULK: 2017 COULD MARK THE START OF LOWER SHIP DELIVERIES HELPING TONNAGE SUPPLY ISSUES IN THE MARKET, SAYS SHIPOWNER - HELLENIC SHIPPING NEWS
Dry bulk owner Pacific Basin, mainly active in the Handysize and Supramax trades appeared optimistic in its analysis of the prospects of the dry bu ...
Monday, 15 August 16
INDONESIAN COAL PRICES RALLYING; COAL OUTPUT REMAINS FLAT
COALspot.com: Global thermal coal prices, including Indonesian coal prices have risen sharply due to jump in imports from China as it curbs domesti ...
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- Medco Energi Mining Internasional
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vizag Seaport Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- SMC Global Power, Philippines
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Australian Coal Association
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Star Paper Mills Limited - India
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Semirara Mining Corp, Philippines
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- ICICI Bank Limited - India
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- SMG Consultants - Indonesia
- Salva Resources Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- Parry Sugars Refinery, India
- Straits Asia Resources Limited - Singapore
- Petron Corporation, Philippines
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Indo Tambangraya Megah - Indonesia
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Rashtriya Ispat Nigam Limited - India
- Gujarat Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Cigading International Bulk Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Electricity Authority, New Zealand
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Grasim Industreis Ltd - India
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- White Energy Company Limited
- Trasteel International SA, Italy
- Oldendorff Carriers - Singapore
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
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