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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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- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Borneo Indobara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Ind-Barath Power Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Krishnapatnam Port Company Ltd. - India
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Heidelberg Cement - Germany
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Planning Commission, India
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- PTC India Limited - India
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Bhatia International Limited - India
- Carbofer General Trading SA - India
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Malabar Cements Ltd - India
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Global Business Power Corporation, Philippines
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- GN Power Mariveles Coal Plant, Philippines
- Coal and Oil Company - UAE
- Sree Jayajothi Cements Limited - India
- London Commodity Brokers - England
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