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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, 25 July 16
STRONG BUYER DEMAND PUSHING UP INDONESIAN THERMAL COAL INDICES
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 0.73 percent week over week to averaging $40.83 per ton this past week, shows C ...
Monday, 25 July 16
THE BDI FELL ON WEAKER RATES FOR CAPESIZE & PANAMAX VESSELS
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities slide slightly as Cape and Panamax segments ending in neg ...
Friday, 22 July 16
U.S COAL OUTPUT ROSE 17.2% WEEK OVER WEEK - EIA
COALspot.com – U.S, world’s second largest coal producers has produced approximately totalled an estimated 15.1 million short tons (mms ...
Thursday, 21 July 16
WHAT TO DO WHEN YOU DON'T GET PAID - SHIPOWNERS CLUB
Present market conditions have led to an increase in claims related to unpaid hire. To recover unpaid hire, Owners need to fully understand who the ...
Thursday, 21 July 16
CONSTRUCTIVE TOTAL LOSS: WHAT GOES IN TO CALCULATING QUANTUM? - HILL DICKINSON
KNOWLEDGE TO ELEVATE
The Commercial Court recently delivered its judgment in an important case (Connect Shipping Inc and Machrimar Management ...
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- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- GVK Power & Infra Limited - India
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Pipit Mutiara Jaya. PT, Indonesia
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Dalmia Cement Bharat India
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Rio Tinto Coal - Australia
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Posco Energy - South Korea
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Salva Resources Pvt Ltd - India
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Electricity Generating Authority of Thailand
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Kumho Petrochemical, South Korea
- Planning Commission, India
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- Vizag Seaport Private Limited - India
- Marubeni Corporation - India
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- Savvy Resources Ltd - HongKong
- Mjunction Services Limited - India
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- Ministry of Finance - Indonesia
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
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