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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, 08 June 16
THE DRY BULK MARKET KEPT MOVING SIDEWAYS LAST WEEK; SECOND HAND PURCHASES MOVING NORTH - INTERMODAL
Once again its Posidonia time and the biannual exhibition takes place during a very warm June here in Athens, as if the performance of the dry bulk ...
Tuesday, 07 June 16
CS COAL INDEX ROSE FOR SECOND STRAIGHT WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin was up 0.38 percent week over week to averaging $39.16 per ton this past week, shows ...
Monday, 06 June 16
BDI GAINED ON A STRONGER DEMAND FOR CAPESIZE SHIPS
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose this past week on a stronger demand for Capesize ves ...
Friday, 03 June 16
DRY BULK VESSEL DELIVERIES COULD BE LESS THAN 50 MILLION DWT IN 2016, AS OWNERS DELAY OR CANCEL NEWBUILDING ORDERS
The dry bulk market has been caught between a rock and a hard place over the course of the past couple of years, as on one hand demand has plunged, ...
Friday, 03 June 16
U.S WEEKLY COAL PRODUCTION SLIDES 1.3% - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 11.5 million short tons (mm ...
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- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Xindia Steels Limited - India
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- Bangladesh Power Developement Board
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- Binh Thuan Hamico - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Makarim & Taira - Indonesia
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- Meenaskhi Energy Private Limited - India
- Sarangani Energy Corporation, Philippines
- Oldendorff Carriers - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
- Parliament of New Zealand
- CNBM International Corporation - China
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- Mjunction Services Limited - India
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Global Green Power PLC Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Gujarat Mineral Development Corp Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Grasim Industreis Ltd - India
- LBH Netherlands Bv - Netherlands
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- San Jose City I Power Corp, Philippines
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Indonesian Coal Mining Association
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
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