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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, 12 April 16
NO FURTHER SIGNIFICANT COAL PRICE DECLINES IN THE FUTURE - FITCH
COALspot.com: Fitch does not expect further significant coal price declines because producers sector-wide are suffering losses while China and Indo ...
Monday, 11 April 16
ON THE TIGHTROPE, IT CAN BE HARD TO KEEP YOUR BALANCE.... - CLARKSONS
Today’s headlines often point towards the impact of the demand side on the state of health of the shipping markets. But despite the fact that ...
Monday, 11 April 16
WEEKLY CS (I) COAL INDEX FOR 5700 GAR COAL UP 0.03 CENTS, OR ABOUT 0.06 PERCENT, TO $48.21 A TON
COALspot.com: Average 5000 GAR coal index of Indonesian origin fell 0.15 percent week over week to averaging $38.82 per ton on this past Friday, ac ...
Monday, 11 April 16
COAL IS NOT THE ENEMY TO FIGHT - ANDREA CLAVARINO, ASSOCARBONI
COALspot.com: “Coal is not the enemy to fight and electricity production from coal has an environmental impact in its lifecycle similar to na ...
Monday, 11 April 16
FORTY INDIAN COAL IMPORTERS UNDER THE DRI SCANNER FOR OVER-INVOICING : HINDU BUSINESS LINE
The Finance Ministry and the Directorate of Revenue Intelligence (DRI) of India are said to have stepped up investigations into the alleged over-in ...
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- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- GMR Energy Limited - India
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- International Coal Ventures Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- Central Electricity Authority - India
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- Vedanta Resources Plc - India
- Krishnapatnam Port Company Ltd. - India
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- Sindya Power Generating Company Private Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- Aditya Birla Group - India
- Asmin Koalindo Tuhup - Indonesia
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- Sojitz Corporation - Japan
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Grasim Industreis Ltd - India
- The University of Queensland
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Thai Mozambique Logistica
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Baramulti Group, Indonesia
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Metalloyd Limited - United Kingdom
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
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