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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, 15 June 16
THE DRY BULK PRICES CORRECTED UPWARDS ROUGHLY 15% - KONSTANTINOS KONTOMICHIS
Once more, the international shipping community turned its attention to Greece and more specifically to Attica that hosted Posidonia, the biggest m ...
Tuesday, 14 June 16
CS COAL INDICES ROSE UP FOR A THIRD STRAIGHT WEEK; 4200 GAR COAL UP 0.73%
COALspot.com: Average 5000 GAR coal index of Indonesian origin was up 0.54 percent week over week to averaging $39.37 per ton this past week, shows ...
Monday, 13 June 16
DEMAND FOR DRY BULK COMMODITIES COULD PROVIDE FUTURE BOOST FOR SHIP OWNERS - HELLENIC SHIPPING NEWS
When it comes to the dry bulk market, shipowners these days are looking for news in any shape or form they can find them. However, as the discussio ...
Monday, 13 June 16
ONSHORE SHALE: WORTH KEEPING IN THE SHIPPING SPOTLIGHT CLARKSONS
Generally, shipping industry watchers spend much of their time monitoring events out to sea: how fleets are evolving, trade volumes growing and fre ...
Monday, 13 June 16
PORT OF NEWCASTLE SHIPPED 5.03% MORE COAL IN MAY; AVERAGE SELLING PRICE DECLINED 2.08% FROM APRIL
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $AU 1.162bill ...
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- Therma Luzon, Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- Krishnapatnam Port Company Ltd. - India
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- Global Coal Blending Company Limited - Australia
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- Parliament of New Zealand
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Electricity Authority, New Zealand
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
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- Indian Energy Exchange, India
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
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- Standard Chartered Bank - UAE
- Latin American Coal - Colombia
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- CNBM International Corporation - China
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Aboitiz Power Corporation - Philippines
- GVK Power & Infra Limited - India
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Marubeni Corporation - India
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- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Thai Mozambique Logistica
- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- PowerSource Philippines DevCo
- San Jose City I Power Corp, Philippines
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- SMG Consultants - Indonesia
- Australian Coal Association
- Xindia Steels Limited - India
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Asmin Koalindo Tuhup - Indonesia
- Merrill Lynch Commodities Europe
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- Globalindo Alam Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- IHS Mccloskey Coal Group - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Pendopo Energi Batubara - Indonesia
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Sojitz Corporation - Japan
- White Energy Company Limited
- Interocean Group of Companies - India
- Wilmar Investment Holdings
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