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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, 13 July 17
SUPRAMAX: NICKEL ORE TRIPS TO CHINA VIA PHILIPPINES WITH DELIVERY S. CHINA IS PAYING AROUND MID $9000 - FEARNLEYS
Supramax
COALspot.com: Another slow start to the week with somewhat softening rates and few fixtures.
Nickel Ore trips to China via the Phil ...
Wednesday, 12 July 17
COAL HAS CONTINUED A STELLAR RUN OVER THE PAST YEAR GAINING ~10% OVER THE PAST QUARTER AND ~41% OVER THE PAST YEAR - LINOS KOGEVINAS
Having just passed the second quarter of 2017, it is interesting to take a look at the performance of the commodity market and how certain commodit ...
Monday, 10 July 17
A ROLLERCOASTER YEAR FOR COAL PRICES; ICPR ROSE 4.62% M/M
COALspot.com: Indonesian coal benchmark price rose 4.62% in July, government data showed.
The benchmark price of Indonesian thermal c ...
Monday, 10 July 17
THE FREIGHT MARKET WAS SHOWS A NEGATIVE TREND WEEK OVER WEEK
COALspot.com: The Freight market decline this past week compared to the previous week, as BDI and Cape indexes show a negative trend week over week ...
Friday, 07 July 17
EIA ESTIMATES SHOW U.S WEEKLY COAL PRODUCTION UP 1.7 PERCENT
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 15.9 million short tonn ...
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Showing 2006 to 2010 news of total 6871 |
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- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Indian Energy Exchange, India
- Bangladesh Power Developement Board
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- Semirara Mining Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- Minerals Council of Australia
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- Xindia Steels Limited - India
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- The University of Queensland
- Gujarat Mineral Development Corp Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Coal and Oil Company - UAE
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Energy Development Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Marubeni Corporation - India
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Wood Mackenzie - Singapore
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- GMR Energy Limited - India
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Price Waterhouse Coopers - Russia
- Central Electricity Authority - India
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- Economic Council, Georgia
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Standard Chartered Bank - UAE
- New Zealand Coal & Carbon
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
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