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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, 11 July 16
THE MAIN SEA FREIGHT INDEX, BDI ROSE FURTHER ON 8 JULY DUE TO STRONG DEMAND FOR PANAMAX SHIPS
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose this past week. The BDI was up 3.84 percent from las ...
Monday, 11 July 16
DRY BULK MARKET: UP TO 30 MILLION DWT OF OLDER BULKERS WILL NEED TO BE SCRAPPED BY END OF 2017 FOR MARKET TO FIND BALANCE
Tonnage oversupply in the dry bulk market is more than evident, as newbuildings have been hitting the water faster than owners can scrap their olde ...
Friday, 08 July 16
U.S. WEEKLY COAL OUTPUT UP 3% TO 14.1 MMST - EIA
COALspot.com – U.S, world’s second largest coal producers has produced approximately totalled an estimated 14.1 million short tons (mms ...
Thursday, 07 July 16
PANAMAX : THE TENDENCY FROM LAST WEEK CONTINUES WITH A CONSIDERABLY STRONGER SENTIMENT ALL ACROSS THE BLOCK - FEARNLEYS
Capesize
Rates have been holding at steady levels over the last weeks but towards end of this period they are becoming under more pressure as gen ...
Thursday, 07 July 16
CONSOLIDATION TO RULE OVER SHIPPING, AS EXECUTIVES SEEK INVESTMENT OPPORTUNITIES IN CHINA, INDIA AND EUROPE SAYS NORTON ROSE SURVEY
The transport sector is looking to Asia Pacific as the key market for investment over the next five years, according to the seventh The way ahead T ...
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- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Authority, New Zealand
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Heidelberg Cement - Germany
- India Bulls Power Limited - India
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Videocon Industries ltd - India
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- PetroVietnam Power Coal Import and Supply Company
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- Orica Mining Services - Indonesia
- SMG Consultants - Indonesia
- Parliament of New Zealand
- Ministry of Mines - Canada
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- San Jose City I Power Corp, Philippines
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Aditya Birla Group - India
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Interocean Group of Companies - India
- Australian Coal Association
- Central Java Power - Indonesia
- Power Finance Corporation Ltd., India
- Star Paper Mills Limited - India
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- Antam Resourcindo - Indonesia
- Parry Sugars Refinery, India
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Bahari Cakrawala Sebuku - Indonesia
- McConnell Dowell - Australia
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Edison Trading Spa - Italy
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Ambuja Cements Ltd - India
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Carbofer General Trading SA - India
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