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Wednesday, 06 September 17
LAYTIME - CHARTERERS' RIGHTS & PORT COSTS - NORTH P&I CLUB
KNOWLEDGE TO ELEVATE
In a recent London Arbitration decision (18/17) the Tribunal had to consider whether the owners were entitled to recover additional expenses incurred in complying with charterers’ orders to stop loading operations.
The Facts
The vessel was voyage chartered for a voyage from the USA to Venezuela. Upon arrival at the load port, loading commenced. When charterers became aware of this they ordered the loading to stop. Loading did not then recommence until four days later. Owners claimed from charterers the additional dockage, security and guards’ expenses incurred as a result of the four day interruption to loading.
The Load Port Expenses
In respect of the additional load port expenses, the Tribunal held that the allocation of such expenses would usually fall to owners under the charterparty terms. This was because the charterers were entitled to use the laytime as they wished and so it followed that the associated expenses had to lie where they fell, i.e. with the owners. However, the Tribunal accepted evidence from the owners that an oral agreement had been reached between the owners and the charterers that charterers had agreed to pay the owners’ invoice in full, which included the additional port expenses. It was, therefore, as a result of this additional oral agreement that the Tribunal ordered the charterers to pay the additional port expenses to the owners. Without this oral agreement, which changed the terms of the charterparty, the owners would not have received any compensation for the additional load port expenses incurred as a result of the four day delay.
A Reminder
It is worth reminding owners that charterers do have an absolute right to use the given laytime as they see fit. There is no duty on them to load or discharge faster than the given laytime. Therefore, if a charterer orders the vessel to stop cargo operations when laytime is running, the port expenses incurred during the stop will usually be for owners. This is unless a specific clause (or additional oral or written agreement on this point) can be agreed between the owners and the charterers to the contrary.
Source: North of England P&I Club
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- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
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- Africa Commodities Group - South Africa
- London Commodity Brokers - England
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- Kaltim Prima Coal - Indonesia
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- Vedanta Resources Plc - India
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- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
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- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Indika Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
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- Holcim Trading Pte Ltd - Singapore
- Sical Logistics Limited - India
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- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
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- CNBM International Corporation - China
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- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
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- Australian Coal Association
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- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
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- GMR Energy Limited - India
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- Commonwealth Bank - Australia
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- Wood Mackenzie - Singapore
- Antam Resourcindo - Indonesia
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- Directorate General of MIneral and Coal - Indonesia
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- Georgia Ports Authority, United States
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- Energy Link Ltd, New Zealand
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- Electricity Authority, New Zealand
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- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
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- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
- Economic Council, Georgia
- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
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- Sree Jayajothi Cements Limited - India
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- White Energy Company Limited
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