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