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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, 10 August 17
ANOTHER ACTIVE WEEK FOR THE PANAMAXES WITH INCREASING RATES IN BOTH HEMISPHERES - FEARNLEYS
Supramax
Both basins have remained fairly flat, could say slightly to the negative. A quiet start of the week in the Pacific with holidays in Sin ...
Wednesday, 09 August 17
THE KEY IMPORTERS OF U.S. COAL FOR THE FIRST FIVE MONTHS OF 2017 ARE THE NETHERLANDS, INDIA AND JAPAN - PETER SAND, BIMCO
US seaborne coal exports have turned years of negative growth around and seem to be climbing for a third quarter in a row. The increase in total vo ...
Wednesday, 09 August 17
INDONESIAN COAL PRICE REFERENCE INCREASE COULD CONTINUE IN THE COMING MONTHS
COALspot.com: Indonesian coal benchmark price rose 6.36% in August, government data showed.
The benchmark price of Indonesian thermal ...
Wednesday, 09 August 17
COAL HAS GAINED AROUND 40% OVER THE PAST TWELVE MONTHS; IRON ORE HAS MOVED FROM AROUND $50/T IN AUGUST 2016 TO OVER $70/T TODAY - INTERMODAL
During the summer’s peak, and with the markets remaining relatively quiet, we can argue that most markets have built solid foundations to enj ...
Tuesday, 08 August 17
THE BULLISH RIDE CONTINUES ON FOR THE IRON ORE MARKET - GEORGE LAZARIDIS
The bullish ride continues on for the iron ore market, with most in the market now eyeing the possibility for further gains to be had as Chine ...
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Showing 1976 to 1980 news of total 6871 |
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- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Romanian Commodities Exchange
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- Attock Cement Pakistan Limited
- VISA Power Limited - India
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- White Energy Company Limited
- Timah Investasi Mineral - Indoneisa
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Indian Energy Exchange, India
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Energy Link Ltd, New Zealand
- The Treasury - Australian Government
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Antam Resourcindo - Indonesia
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Medco Energi Mining Internasional
- Petrochimia International Co. Ltd.- Taiwan
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- New Zealand Coal & Carbon
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- Indogreen Group - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Savvy Resources Ltd - HongKong
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Makmur.PT - Indonesia
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Chettinad Cement Corporation Ltd - India
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Carbofer General Trading SA - India
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Deloitte Consulting - India
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Eastern Coal Council - USA
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- London Commodity Brokers - England
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Global Business Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Anglo American - United Kingdom
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
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