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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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Monday, 08 August 16
THE TURKISH GOVERNMENT HAS IMPOSED A $15 A TON DUTY ON POWER PLANT COAL IMPORTS - MEDIA
COALspot.com: The Turkish government has imposed a US$15 per ton duty on thermal coal imports for use in its power sector.
According to media ...
Monday, 08 August 16
THE BALTIC EXCHANGE, TRACKING RATES FOR SHIPS CARRYING DRY BULK COMMODITIES SLIDE SLIGHTLY
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities slide slightly as Panamax and Supramax segments ending in ...
Monday, 08 August 16
ARE EXPENSES INCURRED DURING NEGOTIATION OF A PIRATE RANSOM RECOVERABLE IN GENERAL AVERAGE? - CLYDE&CO
KNOWLEDGE TO ELEVATE
Facts
The laden chemical tanker LONGCHAMP was transiting the Gulf of Aden on passage to Vietnam. The ship was subject t ...
Saturday, 06 August 16
DRY BULK SHIPPING CHARTER RATES TO RISE ON UNEXPECTED DEMAND GROWTH - DREWRY
Increasing trade and contracting supply will support a recovery in charter rates on major dry bulk shipping routes, with the prospect of China impo ...
Friday, 05 August 16
WEEKLY U.S. COAL OUTPUT TOTALED AN ESTIMATED 16.1 MMST IN THE WEEK ENDED JULY 30 - EIA
COALspot.com – U.S., the world’s second largest coal producers has produced approximately totalled an estimated 16.1 million short tons ...
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- Deloitte Consulting - India
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- Planning Commission, India
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- The University of Queensland
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement - Thailand
- MS Steel International - UAE
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- PTC India Limited - India
- LBH Netherlands Bv - Netherlands
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Goldman Sachs - Singapore
- Directorate Of Revenue Intelligence - India
- Power Finance Corporation Ltd., India
- Vizag Seaport Private Limited - India
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Globalindo Alam Lestari - Indonesia
- Australian Commodity Traders Exchange
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- CNBM International Corporation - China
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Simpson Spence & Young - Indonesia
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Medco Energi Mining Internasional
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- Sakthi Sugars Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- Essar Steel Hazira Ltd - India
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Rashtriya Ispat Nigam Limited - India
- Formosa Plastics Group - Taiwan
- Australian Coal Association
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMG Consultants - Indonesia
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Thai Mozambique Logistica
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- Semirara Mining and Power Corporation, Philippines
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Jindal Steel & Power Ltd - India
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Toyota Tsusho Corporation, Japan
- Africa Commodities Group - South Africa
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Altura Mining Limited, Indonesia
- Wilmar Investment Holdings
- Thiess Contractors Indonesia
- Indo Tambangraya Megah - Indonesia
- Intertek Mineral Services - Indonesia
- Coalindo Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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