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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, 27 April 16
INDONESIAN COAL MINER KIDECO REPORTED NET PROFIT OF US$138.1 MILLION IN 2015
COALspot.com: Kideco Jaya Agung, one of the Indonesia's leading coal miners has reported net profit of US$138.1 million on revenue of US$1.65 b ...
Tuesday, 26 April 16
INDONESIA BANNED COAL EXPORTS TO PHILIPPINES BY BARGES DUE TO SECURITY CONCERN
COALspot.com: The Ministry of Energy and Mineral Resources (ESDM) on behalf of the government of Indonesia has Freeze coal exports by barges to Phi ...
Tuesday, 26 April 16
NEWBUILDING DEMAND DOWN EVERYWHERE? - CLARKSONS
Newbuild activity provides one indication of an owner country’s likely future fleet growth, though secondhand sale and purchase and demolitio ...
Monday, 25 April 16
CHINESE STEEL PRICE SURGE NOT SUSTAINABLE - FITCH
The rapid increase in Chinese steel prices so far this year is not sustainable, as it is largely due to a seasonal pick-up in construction and elev ...
Monday, 25 April 16
WEEKLY CS (I) COAL INDICES END ALMOST FLAT
COALspot.com: Average 5000 GAR coal index of Indonesian origin up 0.05 percent week over week to averaging $38.67 per ton on this past Friday, acco ...
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- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- Bhushan Steel Limited - India
- Intertek Mineral Services - Indonesia
- The University of Queensland
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Central Java Power - Indonesia
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- London Commodity Brokers - England
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- Bukit Makmur.PT - Indonesia
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Power Finance Corporation Ltd., India
- Coalindo Energy - Indonesia
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Gujarat Sidhee Cement - India
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- IHS Mccloskey Coal Group - USA
- Semirara Mining Corp, Philippines
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Sical Logistics Limited - India
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Cigading International Bulk Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Altura Mining Limited, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Tamil Nadu electricity Board
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Karaikal Port Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
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