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Friday, 07 July 17
SHOULD WE BE AVOIDING GENERAL AVERAGE? - ALEX KEMP
 KNOWLEDGE TO ELEVATE
Calls for general average to be abolished are nearly as old as the regime itself. A representative of Lloyd’s attended the eponymous Antwerp Conference in 1873 and latterly described general average as a “a nest of fraud and abuses, a lurking place for speculation and waste”. Even in 1913 commentators were complaining about the increasing size of vessels and the volume of bills of lading they created. The Chairman of the US Association of Average Adjusters said of general average that year “the time, trouble, expense and delay are out of all proportion to the benefit achieved”. These comments are surprisingly familiar and it is interesting to see that the same weakness in general average are made today.
Unsurprisingly those involved in transporting or insuring cargo have little love for the regime, when they are usually the paying party. There have been calls in the past for the loss to simply lie where it falls for the respective hull and cargo insurers to absorb. A key piece of research by Mr Matthew Marshall of the Institute of London Underwriters for the IUMI Tokyo conference in 1994 (updated to 1999) really energized the modern debate. His work highlighted the fact that 10% of the cost of general average was adjusters’ fees and another 10% commission (something that has now been abolished in the most recent rules). Perhaps most importantly it was suggested that the majority of general average events were the fault of the ship owner. This helped lead to the ill-fated York-Antwerp Rules 2004 which have now been replaced.
Whilst the York-Antwerp Rules 2004 may now have been replaced with a more moderate regime, the circumstances which give rise to criticism of general average are more relevant than ever. Many commentators have written about the increasing size of container ships, the increasing complexity of their contracts of carriage and the severe impact this has on the cost and time required to adjust such a general average event. This observations were again aired in the negotiations to the York-Antwerp Rules 2016.
For the time being, at least, general average does not seem to be in any grave threat of abolition and the status quo (broadly speaking) will continue. However, that doesn’t mean to say that the market is not evolving and adapting to meet the reality of modern general average. General average absorption clauses have long been a feature of H&M policies as a way to avoid low value general average events. Their limits have increased as vessel size and casualty complexity has increased. We have seen examples of such limits being as much as US$1 million.
However, more recently parties involved in container shipping have taken even more aggressive steps. Vessel sharing agreements and slot charters used in the management of container ships often now contain provisions which compel the parties to “consult” to determine whether they can absorb all the general average sacrifices and losses and to try and persuade the Owners not to declare general average. Often these agreements go further and compel the parties to absorb general average between the parties up to a limit of say US$0.5 million (this should be distinguished from a general average adsorption clause in a H&M policy). This shows a commercial decision in container shipping that general average, in principle, should be avoided as it is not in the interests of shippers, who are the customers of container lines.
It is easy to see why. With adjuster’s fees, through no fault of their own, to collect security often running into the hundreds of thousands of dollars and adjustments taking anything up to a decade, it is an unattractive way to deal with losses arising from a casualty in complex container casualties. As a result we have seen container lines go further than the provisions in their contractual agreements in the aftermath of a casualty and enter into bespoke agreements resolving to fund all general average expenses and sacrifice on certain terms. More often than not this prevents any need to collect general average security or obtain cargo documentation for the entire manifest. This simply leaves the carriers to deal with cargo claims (be them sacrifice or otherwise) in the usual way. One might say that this places a greater financial burden on the carriers who are absorbing cargo’s proportion of general average from their bottom line (such a voluntary liability would not ordinarily be insured by the carrier) as ordinarily, cargo’s proportion of general average would be reimbursed by cargo insurers. This may simply be the effect of what is undoubtedly an extremely competitive market place for container shipping, notwithstanding recent mergers.
Ultimately, whether parties should be considering more aggressive steps to avoid general average following an incident, will depend upon the nature of the casualty, the scale of expenses/sacrifice, the legal regimes involved and the number parties. Clearly, the benefits of modifying the “usual” general average process will be greatest in a container casualty scenario but that’s not say that it should not be considered when other types of vessel are involved.
By: Alex Kemp, Senior Associate at Solicitors Holman Fenwick Willan LLP and Associate of the Association of Average Adjusters
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Thursday, 24 August 17
SUPRAMAX: LOW $10K FOR INDO COAL TRIPS TO INDIA; AROUND $10K FOR INDO TO CHINA TRIPS - FEARNLEYS
Supramax
This week Supras from the Black Sea on fhaul have seen numerous orders and improving rates.
53-57k dwt vessels have been fixed at e ...
Wednesday, 23 August 17
THE STRONG IRON ORE TRADE ROUTES SUPPORT CAPESIZE SEGMENT - INTERMODAL
The upward trend in the Capesize segment is definitely being supported by the strong momentum in the key iron ore trade routes. The price of high-q ...
Tuesday, 22 August 17
WHAT IS A RELEASE CALL?
KNOWLEDGE TO ELEVATE
Joining a mutual P&I Club means each Member shares in the fortunes of that Club and its membership. The continuity of ...
Tuesday, 22 August 17
THOSE DOG DAYS OF SUMMER STEEL PRODUCTION IN CHINA - COMMODORE
COALspot.com: One popular but inaccurate narrative that makes the rounds every June and July (and occurred again this year) is that China’s s ...
Monday, 21 August 17
BANPU REVEALS FIRST HALF 2017 WITH STRONG RESULTS; SUPPORTED BY HIGHER COAL PRICES
Banpu Reveals First Half 2017 with Strong Results from Higher Coal Prices Gearing Up to the Era of New Energy with Banpu Greener & Smarter Stra ...
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Showing 1961 to 1965 news of total 6871 |
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- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- Kideco Jaya Agung - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- Vedanta Resources Plc - India
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- Neyveli Lignite Corporation Ltd, - India
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- Malabar Cements Ltd - India
- White Energy Company Limited
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- Mercuria Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- Heidelberg Cement - Germany
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Borneo Indobara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- PTC India Limited - India
- New Zealand Coal & Carbon
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
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