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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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Tuesday, 17 May 16
INDONESIAN COAL PRICE REFERENCE DECLINE AGAIN
COALspot.com: The Indonesia Coal Benchmark Price declined in May 2016.
The Director General of Mineral and Coal of Indonesia, the regulator of ...
Tuesday, 17 May 16
CHINA THERMAL-POWER OVERSUPPLY TO WORSEN - FITCH
COALspot.com: The overcapacity in thermal-power generation in China is likely to worsen in 2016 to 2017, Fitch Ratings says in a new report.
F ...
Tuesday, 17 May 16
ON YOUR MARKS: TRACKING CHINESE TRADE - CLARKSONS
One of the major drivers behind the challenges currently facing many of the shipping markets has been slower demand growth. World seaborne trade gr ...
Monday, 16 May 16
INDONESIAN WEEKLY COAL INDICES AT POSITIVE LEVELS - CS (I) COAL INDEX
COALspot.com: Average 5000 GAR coal index of Indonesian origin up 0.31 percent week over week to averaging $38.94 per ton this past week, shows CS ...
Monday, 16 May 16
OPEC SEES RIVAL OIL PRODUCTION DECLINING
Crude Oil Price Movements
The OPEC Reference Basket averaged $37.86/b in April, a gain of $3.21 or 9.3%. This was 40% higher than the lows reache ...
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- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- SMG Consultants - Indonesia
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- Chettinad Cement Corporation Ltd - India
- Binh Thuan Hamico - Vietnam
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Singapore Mercantile Exchange
- IHS Mccloskey Coal Group - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Independent Power Producers Association of India
- Central Java Power - Indonesia
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Aditya Birla Group - India
- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- The State Trading Corporation of India Ltd
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Carbofer General Trading SA - India
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- Larsen & Toubro Limited - India
- Mjunction Services Limited - India
- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Wilmar Investment Holdings
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- IEA Clean Coal Centre - UK
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- Cement Manufacturers Association - India
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Madhucon Powers Ltd - India
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Vizag Seaport Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Therma Luzon, Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- White Energy Company Limited
- Siam City Cement PLC, Thailand
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Dalmia Cement Bharat India
- Directorate General of MIneral and Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Planning Commission, India
- PowerSource Philippines DevCo
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- The University of Queensland
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
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