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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, 20 June 16
CS COAL INDICES CONTINUE UPWARD TREND SINCE END APRIL
COALspot.com: Average 5000 GAR coal index of Indonesian origin was up again by 0.05 percent week over week to averaging $39.39 per ton this past we ...
Monday, 20 June 16
THE BDI HAS FELL 23 POINTS WEEK OVER WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities declined this past week. The BDI was fell 3.77 percent fr ...
Friday, 17 June 16
CHINA'S NEW POLICY TO REDUCE WASTE IN RENEWABLE ENERGY - FITCH
Chinese renewable energy producers are likely to benefit from a new policy that guarantees a minimum amount of solar and wind power is purchased in ...
Friday, 17 June 16
KOMIPO INVITES BIDS FOR BITUMINOUS COAL FOR BORYEONG POWER PLANT
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 780,000 Metric Tons of Bituminous Coal for its B ...
Friday, 17 June 16
U.S WEEKLY COAL PRODUCTION UP 7.7% - EIA
COALspot.com – U.S., the world’s one of the largest coal producer has produced approximately totalled an estimated 12.9 million short t ...
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- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Larsen & Toubro Limited - India
- Africa Commodities Group - South Africa
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- Port Waratah Coal Services - Australia
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
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- Minerals Council of Australia
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- Siam City Cement PLC, Thailand
- Meenaskhi Energy Private Limited - India
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Planning Commission, India
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
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- Grasim Industreis Ltd - India
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- SMC Global Power, Philippines
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Timah Investasi Mineral - Indoneisa
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- Sarangani Energy Corporation, Philippines
- Sojitz Corporation - Japan
- Essar Steel Hazira Ltd - India
- White Energy Company Limited
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- Posco Energy - South Korea
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- London Commodity Brokers - England
- Eastern Coal Council - USA
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- Orica Australia Pty. Ltd.
- Global Green Power PLC Corporation, Philippines
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Parry Sugars Refinery, India
- Bahari Cakrawala Sebuku - Indonesia
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Ind-Barath Power Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- Baramulti Group, Indonesia
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ministry of Finance - Indonesia
- Price Waterhouse Coopers - Russia
- India Bulls Power Limited - India
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- The Treasury - Australian Government
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- Deloitte Consulting - India
- Videocon Industries ltd - India
- New Zealand Coal & Carbon
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
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- Indian Oil Corporation Limited
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- Mercator Lines Limited - India
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
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