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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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Wednesday, 10 August 16
THE INDONESIAN DRAFT NEW MINING LAW - AMENDMENTS TO THE 2009 MINING LAW
KNOWLEDGE TO ELEVATE
COALspot.com: A draft mining law published by Indonesia's Minister of Energy and Mineral Resources provides use ...
Tuesday, 09 August 16
CS50 COAL INDEX HITS NEW FIFTY-WEEKS HIGH
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 1.78% week over week to averaging $41.85 per ton this past week, shows CS (i) C ...
Tuesday, 09 August 16
HARD COAL PRODUCTION AND WORLD TRADE ON THE DECLINE FOR THE FIRST TIME IN YEARS - VDKI
Hard coal production and world trade on the decline for the first time in years – not a harbinger of a global energy turnaround
Worldwid ...
Tuesday, 09 August 16
BREXIT, BRITANNIA AND THE WAVES - TREVOR CROWE, CLARKSON RESEARCH
This week, the Bank of England put into place its action plan following the UK referendum on 23rd June, which indicated the British population&rsqu ...
Monday, 08 August 16
INDONESIA'S DRAFT MINING LAW HINTS AT FUTURE REGULATORY FRAMEWORK
KNOWLEDGE TO ELEVATE
COALspot.com: A draft mining law published by Indonesia's Minister of Energy and Mineral Resources provides use ...
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- Marubeni Corporation - India
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Formosa Plastics Group - Taiwan
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Africa Commodities Group - South Africa
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- Renaissance Capital - South Africa
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Australian Coal Association
- The University of Queensland
- Antam Resourcindo - Indonesia
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Planning Commission, India
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- Minerals Council of Australia
- Iligan Light & Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Edison Trading Spa - Italy
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Kaltim Prima Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Power Finance Corporation Ltd., India
- Central Java Power - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Tamil Nadu electricity Board
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Essar Steel Hazira Ltd - India
- SMC Global Power, Philippines
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Ministry of Transport, Egypt
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Chettinad Cement Corporation Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- TeaM Sual Corporation - Philippines
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Rashtriya Ispat Nigam Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Energy Link Ltd, New Zealand
- Meenaskhi Energy Private Limited - India
- White Energy Company Limited
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Vedanta Resources Plc - India
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Central Electricity Authority - India
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Interocean Group of Companies - India
- Neyveli Lignite Corporation Ltd, - India
- Petron Corporation, Philippines
- Goldman Sachs - Singapore
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
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