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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, 11 April 16
BDI ROSE TO ITS HIGHEST LEVEL IN FOUR MONTHS
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to rose this week.
The freight market was ...
Friday, 08 April 16
COASTAL ENERGEN CROSSES GENERATION OF 1068 MW AND EXPORT OF 1004 MW FROM ITS 1200 MW IPP
COALspot.com: Coal & Oil (C&O) Group, an India centric Energy & Infrastructure company announced that their Coastal Energen' ...
Friday, 08 April 16
WEEKLY US COAL PRODUCTION ESTIMATES DIP 5.4% TO 11 MMST
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 11 million short ...
Friday, 08 April 16
MINISTER OF ENERGY AND MINERAL RESOURCES OF INDONESIA TO ISSUE REGULATION TO GUARANTEE THE COAL SUPPLY TO ITS 35K POWER PLANT PROJECTS
COALspot.com: In order to guarantee the supply of coal for 35,000 megawatt (mw) coal based power plants ( still in planning stage), the Minister of ...
Thursday, 07 April 16
CHINA STEEL CAPACITY CUTS FACE SOCIAL, FINANCIAL HURDLES - FITCH RATINGS
Fitch Ratings says today that the Chinese government's supply-side reform of the steel sector faces immense social and financial challenges. Th ...
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- Antam Resourcindo - Indonesia
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- Bukit Makmur.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Siam City Cement PLC, Thailand
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Jaiprakash Power Ventures ltd
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- ICICI Bank Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- SMC Global Power, Philippines
- Coalindo Energy - Indonesia
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- Sakthi Sugars Limited - India
- Xindia Steels Limited - India
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- TeaM Sual Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- The State Trading Corporation of India Ltd
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- ASAPP Information Group - India
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- Anglo American - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- Kobexindo Tractors - Indoneisa
- Essar Steel Hazira Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Indian Energy Exchange, India
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Finance - Indonesia
- Minerals Council of Australia
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Indo Tambangraya Megah - Indonesia
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Australian Coal Association
- Indonesian Coal Mining Association
- Altura Mining Limited, Indonesia
- Binh Thuan Hamico - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- PetroVietnam Power Coal Import and Supply Company
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Commonwealth Bank - Australia
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- San Jose City I Power Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Oldendorff Carriers - Singapore
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Medco Energi Mining Internasional
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Ind-Barath Power Infra Limited - India
- Deloitte Consulting - India
- Eastern Energy - Thailand
- PTC India Limited - India
- Electricity Authority, New Zealand
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Miang Besar Coal Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- Carbofer General Trading SA - India
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- Kohat Cement Company Ltd. - Pakistan
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