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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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Monday, 21 August 17
INDIA'S COAL IMPORTS DECLINE TO 192 MT IN FY17 - PTI
Import of coal saw a decline of 6.37 per cent to 191.95 million tonnes (MT) in 2016-17 on higher production by CIL that saw the country move to a r ...
Monday, 21 August 17
FIRM DEMAND FOR CAPES CONTINUE TO SUPPORT DRY BULK SHIPPING
COALspot.com: The freight market was continued to rose this past week compared to the previous weeks, as BDI, Cape and Panamax indexes show a posit ...
Friday, 18 August 17
U.S. WEEKLY COAL OUTPUT UP 2.1% WEEK OVER WEEK, SAYS EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 16.5 million short ton ...
Thursday, 17 August 17
DESPITE A HOLIDAY-DISRUPTED WEEK IT HAS BEEN A NEW ACTIVE WEEK FOR THE PANAMAXES - FEARNLEYS
Supramax
A very quiet start to the week with holidays in several countries. USG still bringing good results supported by a tight tonnage availabl ...
Monday, 14 August 17
CENTURIES ON, AND DRY BULK STILL RULES THE WAVES... - SARAH HOLDEN | CLARKSONS
By the late 1800s, the shipping industry had been transformed by the introduction of steam power and iron ships. Coal and grain were two of the mos ...
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Showing 1966 to 1970 news of total 6871 |
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- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- Parliament of New Zealand
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- The Treasury - Australian Government
- New Zealand Coal & Carbon
- Directorate General of MIneral and Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- Siam City Cement PLC, Thailand
- The University of Queensland
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
- Australian Coal Association
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- VISA Power Limited - India
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Economic Council, Georgia
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- Renaissance Capital - South Africa
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- Medco Energi Mining Internasional
- Siam City Cement - Thailand
- Essar Steel Hazira Ltd - India
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- The State Trading Corporation of India Ltd
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Aditya Birla Group - India
- PTC India Limited - India
- SN Aboitiz Power Inc, Philippines
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Iligan Light & Power Inc, Philippines
- Sakthi Sugars Limited - India
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- Tata Chemicals Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Bank of Tokyo Mitsubishi UFJ Ltd
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Simpson Spence & Young - Indonesia
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