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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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Thursday, 07 April 16
PANAMAX RATES ARE FIRMING IN BOTH HEMISHEPHERES - FEARNLEYS
Capesize
With a great volume our of west Australia, rates were finally moving to upper 3's. and stabilizing towards the middle of the week in ...
Thursday, 07 April 16
BIMCO AND GIIGNL PUBLISH A GROUNDBREAKING VOYAGE CHARTER PARTY FOR LNG TRADE
BIMCO and the International Group of Liquefied Natural Gas Importers (GIIGNL) have today jointly issued the first definitive voyage charter party & ...
Wednesday, 06 April 16
HOW LONG SHIPPING CRISIS WILL BE; WHEN SHOULD OWNERS EXPECT THE BULK CARRIERS TO BECOME PROFITABLE? - INTERMODAL
It is the consensus that dry bulk shipping has been in a crisis for quite some time now. Bulk carrier values are at historical low levels, therefor ...
Tuesday, 05 April 16
DRY BULK REVISITS 1980S LOWS AND FACES UNCERTAIN LONGER TERM OUTLOOK - MSI | HELLENIC SHIPPING NEWS
With the market near bottom, attention is turning to the length of the downturn, the effect on asset values and the impact of broader demand side c ...
Monday, 04 April 16
INDONESIA CS57 COAL INDEX SLIDES SLIGHTLY WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin fell 0.07 percent week over week to averaging $38.88 per ton on this past Friday, ac ...
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- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- Kaltim Prima Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- Attock Cement Pakistan Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Latin American Coal - Colombia
- Simpson Spence & Young - Indonesia
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Sical Logistics Limited - India
- Marubeni Corporation - India
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Bayan Resources Tbk. - Indonesia
- Posco Energy - South Korea
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- Economic Council, Georgia
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Australian Coal Association
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- Grasim Industreis Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Star Paper Mills Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- The University of Queensland
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Independent Power Producers Association of India
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- New Zealand Coal & Carbon
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- Kumho Petrochemical, South Korea
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Maharashtra Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
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