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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, 03 May 16
HOW TO AVOID THE LATEST CARGO FRAUDS - BIMCO
BIMCO receives regular reports from members around the world about cargo fraud. This week alone we have had two reports of cargoes being fixed (or ...
Monday, 02 May 16
INDIA'S GANGAVARAM PORT SETS ALL INDIA RECORD FOR NON-COKING COAL DISCHARGE
COALspot.com: Gangavaram Port, the deepest and the most modern port in India, has created yet another historical milestone record by discharging 15 ...
Monday, 02 May 16
CS (I) 5000 GAR COAL INDEX CLOSES 0.11% HIGHER, 5700 GAR COAL RISES 0.07% W/W
COALspot.com: Average 5000 GAR coal index of Indonesian origin up 0.28 percent week over week to averaging $38.78 per ton on this past Friday, acco ...
Monday, 02 May 16
FREIGHT RATES ARE EXPECTED TO BE FLAT TO SOFT THIS WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to rose this week.
The freight market was ...
Saturday, 30 April 16
40 YEARS OF HANDLING COAL AT THE BTW IN WILHELMSHAVEN UNDER THE RHENUS FLAG
Press Release: The first bulk carrier with coal on board docked at the Bulk Terminal Wilhelmshaven (BTW), which is operated by Rhenus Midgar ...
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- Thiess Contractors Indonesia
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- White Energy Company Limited
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercuria Energy - Indonesia
- Agrawal Coal Company - India
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- McConnell Dowell - Australia
- GAC Shipping (India) Pvt Ltd
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Economic Council, Georgia
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sindya Power Generating Company Private Ltd
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Australian Coal Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- Asmin Koalindo Tuhup - Indonesia
- ICICI Bank Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- PTC India Limited - India
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Standard Chartered Bank - UAE
- Krishnapatnam Port Company Ltd. - India
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Central Java Power - Indonesia
- Indian Oil Corporation Limited
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- Kepco SPC Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- VISA Power Limited - India
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Planning Commission, India
- Wilmar Investment Holdings
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Mercator Lines Limited - India
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
- Parliament of New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
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