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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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Monday, 25 April 16
BALTIC DRY INDEX ENDS WEEK ON A POSITIVE NOTE
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to rose this week.
The freight market was ...
Friday, 22 April 16
U.S WEEKLY DOMESTIC COAL OUTPUT UP 8.2 PER CENT - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 11.1 million short tons (mm ...
Thursday, 21 April 16
PANAMAX: A VERY HEALTHY NORTH ATLANTIC FOR BOTH ROUNDS AND FRONTHAUL
Capesize
Correcting after last week's quadrupling.
This year's highest daily average of USD 8000 came on the back of substantial pro ...
Wednesday, 20 April 16
2017 IS EXPECTED TO BE A MUCH BETTER YEAR FOR THE SHIPPING INDUSTRY - INTERMODAL
Some months ago we noted that all projections anticipated 2016 to be a better year from a macroeconomic point of view when compared to 2015. As we ...
Tuesday, 19 April 16
STARS STILL SHINING? KEY IMPORTERS THROUGH THE TELESCOPE - CLARKSONS
As the pace of growth in Chinese seaborne imports has slowed, and prospects for a return to stronger rates of expansion appear to have diminished, ...
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- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
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- Heidelberg Cement - Germany
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Trasteel International SA, Italy
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Makarim & Taira - Indonesia
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Oldendorff Carriers - Singapore
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
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- Tamil Nadu electricity Board
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- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Mjunction Services Limited - India
- Wilmar Investment Holdings
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- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Bukit Baiduri Energy - Indonesia
- The University of Queensland
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- The Treasury - Australian Government
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- The State Trading Corporation of India Ltd
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- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- Sojitz Corporation - Japan
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- Energy Development Corp, Philippines
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- Romanian Commodities Exchange
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- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Carbofer General Trading SA - India
- Minerals Council of Australia
- GMR Energy Limited - India
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Billiton Holdings Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
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- Jaiprakash Power Ventures ltd
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- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Riau Bara Harum - Indonesia
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Dalmia Cement Bharat India
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- Central Electricity Authority - India
- Marubeni Corporation - India
- Coal and Oil Company - UAE
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- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Manunggal Multi Energi - Indonesia
- Grasim Industreis Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Australian Coal Association
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sical Logistics Limited - India
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- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- Global Business Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Ministry of Finance - Indonesia
- Salva Resources Pvt Ltd - India
- PTC India Limited - India
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- GAC Shipping (India) Pvt Ltd
- European Bulk Services B.V. - Netherlands
- Siam City Cement PLC, Thailand
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
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- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- Thiess Contractors Indonesia
- New Zealand Coal & Carbon
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