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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, 13 June 16
BALTIC INDEX FLAT, INDEX FOR CAPE RISE
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities flat this past week. The freight market was almost same l ...
Friday, 10 June 16
INDONESIAN 6322 GAR COAL PRICE REFERENCE RISES TO $51.81 A TON
COALspot.com: The Indonesia Coal Benchmark Price increased in June 2016.
The Director General of Mineral and Coal of Indonesia, the regulator ...
Friday, 10 June 16
WEEKLY U.S. COAL PRODUCTION TOTALED AN ESTIMATED 12 MMST IN THE WEEK ENDED JUNE 4, UP 4% W/W - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 12 million short tons (mmst ...
Wednesday, 08 June 16
BPI ACHIEVES FINANCIAL CLOSE FOR ITS 2000 MW POWER PROJECT IN CENTRAL JAVA
COALspot.com: PT Bhimasena Power Indonesia (BPI) on June 6th, 2016 Achieves financial close for its 2x1,000 MW power project in Batang Regency, Cen ...
Wednesday, 08 June 16
U.S COAL IMPORTS ARE PROJECTED TO BE 12 MMST IN 2016 AND 11 MMST IN 2017 - EIA
Coal Supply
U.S. coal production in May was 50 million short tons (MMst), a 4 MMst (10%) increase from the previous month but 19 MMst (28%) lower ...
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- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- Australian Commodity Traders Exchange
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- CNBM International Corporation - China
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- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- GMR Energy Limited - India
- London Commodity Brokers - England
- White Energy Company Limited
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- Rio Tinto Coal - Australia
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Mercuria Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- MS Steel International - UAE
- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- Indika Energy - Indonesia
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Asam (Persero) Tbk - Indonesia
- Coalindo Energy - Indonesia
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
- Goldman Sachs - Singapore
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- Parliament of New Zealand
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- Planning Commission, India
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- South Luzon Thermal Energy Corporation
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
- PTC India Limited - India
- OPG Power Generation Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- GN Power Mariveles Coal Plant, Philippines
- International Coal Ventures Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
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