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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, 25 May 16
DRY BULK SNP MARKET DISPLAYS SIGNS OF STRENGTH - GEORGE ILIOPOULOS
Only a couple of weeks away from the world’s most prominent maritime event, the market for tankers displays an evident lack of confidence in ...
Tuesday, 24 May 16
WEEKLY CS COAL INDICES NEGATIVE FOR ALL TYPES OF COAL EXCEPT 3800 GAR COAL
COALspot.com: Average 5000 GAR coal index of Indonesian origin was down 0.10 percent week over week to averaging $38.90 per ton this past week, sho ...
Monday, 23 May 16
A PERFECT STORM FOR INDONESIAN STEAM COAL EXPORTS - CLARKSON RESEARCH
Indonesia is the world’s leading steam coal exporter, accounting for over 40% of global seaborne steam coal exports since 2010. However in 20 ...
Monday, 23 May 16
THE PANAMAX INDEX WAS UP 17 POINTS W/W
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose this week.
The freight market was firm and all ...
Friday, 20 May 16
SHIPBUILDING CONTRACTS: CAN I CANCEL? SHOULD I CANCEL? - THE SHIPOWNER CLUB
KNOWLEDGE TO ELEVATE
There are many circumstances in which a buyer of a new-build vessel might want to terminate or cancel their contract with ...
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- Kapuas Tunggal Persada - Indonesia
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- Coalindo Energy - Indonesia
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- Orica Australia Pty. Ltd.
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- VISA Power Limited - India
- Uttam Galva Steels Limited - India
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- Krishnapatnam Port Company Ltd. - India
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Global Green Power PLC Corporation, Philippines
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Aditya Birla Group - India
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- Videocon Industries ltd - India
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Kepco SPC Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Petron Corporation, Philippines
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Edison Trading Spa - Italy
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Goldman Sachs - Singapore
- Karaikal Port Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- Planning Commission, India
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- Sree Jayajothi Cements Limited - India
- Heidelberg Cement - Germany
- Semirara Mining Corp, Philippines
- Parliament of New Zealand
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Attock Cement Pakistan Limited
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Authority, New Zealand
- Cigading International Bulk Terminal - Indonesia
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