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Tuesday, 03 March 20
IMPORTANCE OF MASTER'S CARGO CHECKS - BALTIC EXCHANGE
 KNOWLEDGE TO ELEVATE
Adecision in recent High Court case has made it clear that there is no implied indemnity from a charterer to their counterpart owners if cargo shippers present bills of lading that record the cargo as being loaded clean on board, even if the shippers could have ascertained that the cargo was in fact damaged at the time of loading.
Ince partner Jamila Khan and managing associate Natalie Nielsen lay out the facts of the case. Noble Chartering Inc (the disponent owner) timechartered a vessel from the head owner and then sub-voyage chartered the vessel to Priminds Shipping (HK) Co Ltd (the voyage charterer). Under the voyage charterparty, the vessel loaded a cargo of soya beans in bulk at Santos, Argentina, for discharge at Guangzhou, China. The cargo was loaded by the cargo shipper from a silo via mechanical hoppers.
At the discharge port, the cargo receiver discovered that portions of the cargo had suffered heat and mould damage. In order to prevent the arrest of the vessel, the shipowner secured the receiver’s cargo claim and agreed that it would be subject to Chinese law and the jurisdiction of the Chinese courts. The receiver’s cargo claim was litigated in the Chinese courts, who found the shipowner liable to the receiver for $1,086,564.70.
The shipowner in turn brought a claim against the disponent owner under the terms of the time charterparty, seeking a contribution of 50% of the sum paid to the receiver. This claim was settled by the disponent owner paying $500,000 to the shipowner.
The disponent owner then commenced London arbitration against the voyage charterer under the voyage charterparty, seeking to recover the $500,000 paid to the shipowner and the costs of defending that claim. The disponent owner claimed that they were owed an indemnity for these costs, although there was no express provision in the voyage charterparty providing for such an indemnity.
Arbitration findings
Following arbitration, the Tribunal’s Award highlighted the facts that the cargo had been damaged by heating caking and by mould; that both types of damage were pre-existing at the time of loading but were not reasonably visible to the Master during loading, so the Master could not have verified the condition of the cargo; and the damage would have been reasonably visible to the shipper at the time of loading.
The disponent owner argued that the words “Clean on Board” and “SHIPPED at the Port of Loading in apparent good order and condition” in the draft bill of lading that the shipper provided to the Master for his signature amounted to a representation or warranty by the shipper as to the apparent condition of the cargo at the time of loading. The disponent owners pointed out that the shipper was acting as the voyage charterer’s agent in loading the cargo and said that, by presenting the draft bill of lading in those terms, it had represented that the cargo was in good order when it was loaded – although it was not – and so the voyage charterer owed them an indemnity for the losses caused by the cargo damage.
The Court rejected this argument, stating that although the Hague Rules provide an indemnity in respect of information provided by the charterer which is included in the bills of lading (for example, the marks on bales of cargo or the cargo weights), this indemnity did not extend to statements concerning the apparent order and condition of the cargo. The wording relating to the condition of the cargo in the draft bill of lading was not a representation or a warranty by the shipper or voyage charterer, but was instead an invitation to the Master to make a representation of fact about the state of the cargo, in accordance with his own assessment of the cargo’s apparent condition. Accordingly, the Court held that the voyage charterer did not owe an implied indemnity to the disponent owner in relation to the cargo claim.
Viewpoint
Commented Ms Khan and Ms Nielsen: “Industry observers are unlikely to be surprised by the Court’s ruling in this case, as it has long been understood that it is incumbent on a master to perform his own assessment of the apparent state of the cargo during loading and, if necessary, to clause the bill of lading (despite any “clean” wording in the draft provided by the shippers).
“In practice, a master is often not in a position to make an accurate assessment of the condition of the cargo while it is being loaded. Under English law this gives the shipowners a defence under the Hague/Hague-Visby Rules against a claim brought by the cargo receivers. However, due to the global nature of shipping, a shipowner could face a situation where they are obliged to accept the jurisdiction of a local court that does not apply these defences in the same way. In such circumstances, the shipowner will only be able to pass this claim down to their charterers if the charterparty terms permit it, for example by incorporating the terms of the Inter-Club Agreement.
“This decision makes it clear that there is no implied indemnity from a charterer to their counterpart owners if their agents (the cargo shippers) present bills of lading that record the cargo as being loaded clean on board, even if the shippers could have ascertained that the cargo was in fact damaged at the time of loading.”
Source: The Baltic Exchange
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Wednesday, 04 March 20
MARKET INSIGHT - INTERMODAL
As it was expected, the whole world has been focusing on the spread of the Coronavirus, with the fast outbreak being primarily a massive humanitari ...
Wednesday, 04 March 20
CORONAVIRUS: A WILDCARD FOR BULKS DEMAND - WOOD MACKENZIE
The coronavirus is casting a shadow across commodity markets. It has undermined China’s economic sentiment, putting the country’s growt ...
Wednesday, 04 March 20
THERMAL COAL TO 'PHASE OUT', STRONG DEMAND FOR COKING COAL: PLATO - SYDNEY MORNING HERALD
Plato Investments managing director Don Hamson says Australian iron ore producers are set to benefit in the fallout from coronavirus as China will ...
Wednesday, 04 March 20
CHINA PROVINCE TO CLOSE 10 MLN TONNES OF COAL CAPACITY IN 2020 - XINHUA
Southwest China’s Guizhou Province plans to phase out 10 million tonnes of outdated coal production capacity by closing 80 coal mines in 2020 ...
Wednesday, 04 March 20
UKRAINE PRODUCED OVER 2.55 MLN TONNES OF COAL IN FEBRUARY - UKRINFORM
In February 2020, Ukraine produced over 2.55 million tonnes of coal, which is 0.2% less than planned.
The Coal Miners Union of Ukrai ...
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- Port Waratah Coal Services - Australia
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- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
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- Australian Coal Association
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- Goldman Sachs - Singapore
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- The Treasury - Australian Government
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- Ministry of Mines - Canada
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Star Paper Mills Limited - India
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Romanian Commodities Exchange
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- Minerals Council of Australia
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indian Energy Exchange, India
- Dalmia Cement Bharat India
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- Chamber of Mines of South Africa
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- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Metalloyd Limited - United Kingdom
- Power Finance Corporation Ltd., India
- Energy Development Corp, Philippines
- ASAPP Information Group - India
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- Kohat Cement Company Ltd. - Pakistan
- Thai Mozambique Logistica
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- Leighton Contractors Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- White Energy Company Limited
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- Bukit Asam (Persero) Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- Aboitiz Power Corporation - Philippines
- European Bulk Services B.V. - Netherlands
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- Central Electricity Authority - India
- Merrill Lynch Commodities Europe
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Mercator Lines Limited - India
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- India Bulls Power Limited - India
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- Videocon Industries ltd - India
- London Commodity Brokers - England
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Edison Trading Spa - Italy
- Heidelberg Cement - Germany
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Sidhee Cement - India
- Uttam Galva Steels Limited - India
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- Toyota Tsusho Corporation, Japan
- The State Trading Corporation of India Ltd
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
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- GAC Shipping (India) Pvt Ltd
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- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Antam Resourcindo - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- Jindal Steel & Power Ltd - India
- Sindya Power Generating Company Private Ltd
- Lanco Infratech Ltd - India
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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