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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, 11 May 16
MARKET INSIGHT - KATERINA RESTIS
On Saturday 7th May, Riyadh replaced the long-serving oil minister of more than two decades, Ali-Al-Naimi, as part of a major government overhaul, ...
Tuesday, 10 May 16
VOLATILITY? VARIATION NO ENIGMA TO SHIPPING..... - CLARKSONS
Along with cyclicality, the other characteristic of the shipping markets which receives frequent mention is volatility. This is so evident that the ...
Monday, 09 May 16
INDONESIAN CS COAL INDICES UP CONTINUES; POSITIVE DIRECTION
COALspot.com: Average 5000 GAR coal index of Indonesian origin up 0.10 percent week over week to averaging $38.82 per ton on this past Wednesday, a ...
Monday, 09 May 16
DRY BULK SHIPPING TO WITNESS STEADY PROGRESS MOVING FORWARD ON THE BACK OF GROWING TRADE VOLUMES - BIMCO
In its latest short-term analysis of the shipping markets, BIMCO reiterated its optimism on the prospects of the dry bulk market moving forward. Ac ...
Monday, 09 May 16
BALTIC DRY INDEX ENDS WEEK ON A NEGATIVE NOTE
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities decline this week.
The freight market was weak and a ...
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- Mintek Dendrill Indonesia
- Semirara Mining Corp, Philippines
- Altura Mining Limited, Indonesia
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- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Grasim Industreis Ltd - India
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- Bhushan Steel Limited - India
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- The University of Queensland
- Ministry of Mines - Canada
- Neyveli Lignite Corporation Ltd, - India
- Global Business Power Corporation, Philippines
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Kideco Jaya Agung - Indonesia
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Ind-Barath Power Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Goldman Sachs - Singapore
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- Wood Mackenzie - Singapore
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- White Energy Company Limited
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Directorate General of MIneral and Coal - Indonesia
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- Mercator Lines Limited - India
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Rashtriya Ispat Nigam Limited - India
- MS Steel International - UAE
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Georgia Ports Authority, United States
- Malabar Cements Ltd - India
- Dalmia Cement Bharat India
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Economic Council, Georgia
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Central Electricity Authority - India
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- Karbindo Abesyapradhi - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- Cement Manufacturers Association - India
- Metalloyd Limited - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- Romanian Commodities Exchange
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- The Treasury - Australian Government
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Sinarmas Energy and Mining - Indonesia
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