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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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Tuesday, 08 August 17
COAL SALES DESTINATION IS DOMINATED BY DEVELOPING COUNTRIES IN ASIA - ADARO
COALspot.com: Adaro Energy has produced 13.27 million tonnes of coal during the second quarter of 2017, from the mines PT Adaro Indonesia, PT Semes ...
Tuesday, 08 August 17
KOMIPO INVITES BIDS FOR 5200 AND 5700 NAR COAL FOR Q4 2017
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued an another new tender for 420,000 Metric Tons of Bituminous coal ...
Monday, 07 August 17
INDIA'S THERMAL COAL IMPORTS HAVE FALLEN BY 16% YEAR-ON-YEAR IN THE FIRST FIVE MONTHS OF THIS YEAR
COALspot.com: The second quarter of 2017 was characterized by volatility in the coal market driven by policy measures and weather disruptions say A ...
Monday, 07 August 17
BUMA SIGNED $385 MILLION WORTH OF NEW CONTRACT WITH PT PADA IDI
COALspot.com: PT Delta Dunia Makmur Tbk., has announced that its subsidiary, PT Bukit Makmur Mandiri Utama ("BUMA"), has entered into min ...
Monday, 07 August 17
THE SHIPPING INDEXES BOUNCE BACK THIS PAST WEEK
COALspot.com: The Freight market rose this past week compared to the previous week, as BDI, Cape and Panamax indexes show a positive trend week ove ...
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Showing 1981 to 1985 news of total 6871 |
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- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- Bharathi Cement Corporation - India
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Independent Power Producers Association of India
- Rio Tinto Coal - Australia
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- Mjunction Services Limited - India
- Essar Steel Hazira Ltd - India
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Kideco Jaya Agung - Indonesia
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Chettinad Cement Corporation Ltd - India
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Economic Council, Georgia
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- Thai Mozambique Logistica
- Vijayanagar Sugar Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- New Zealand Coal & Carbon
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Siam City Cement PLC, Thailand
- The University of Queensland
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- Parliament of New Zealand
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Indian Energy Exchange, India
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- Planning Commission, India
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- SMC Global Power, Philippines
- Gujarat Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- Bhoruka Overseas - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Madhucon Powers Ltd - India
- Indonesian Coal Mining Association
- PTC India Limited - India
- Eastern Energy - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Directorate Of Revenue Intelligence - India
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
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