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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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Sunday, 23 February 20
SHIPPING INDUSTRY FACES $370 MILLION HIT FROM NEW PANAMA CANAL CHARGE - REUTERS
A new “freshwater” charge that came in this month to help the Panama Canal cope with climate change will cost the shipping industry up ...
Sunday, 23 February 20
A 57,000DWT SHIP FIXING DELIVERY SOUTH KALIMANTAN TRIP, REDELIVERY CJK, AT $7,600 - BALTIC BRIEFING
Capesize
The Capesize market found little to cheer about this week as it again endured remarkable lows. The Atlantic continued to improve, with ...
Saturday, 22 February 20
THE SURPRISING MOVE IN MARINE FUEL SPREADS - ING
Middle distillates tank
One of the biggest surprises since the implementation of new International Maritime Organization (IMO) sulphur regulati ...
Friday, 21 February 20
CAPE: AVERAGE NOMINAL DAILY EARNINGS STILL ADMITTEDLY UNCHANGED W-O-W AT BELOW US$3000 - FEARNLEYS
CAPE
The worst may just about be over for the big ships. Average nominal daily earnings still admittedly unchanged w-o-w at below US$3k, but sent ...
Friday, 21 February 20
INDIA: POTENTIAL INVESTORS SEEK MORE CLARITY ON COMMERCIAL COAL MINING NORMS - FINANCIAL EXPRESS
Potential private investors have sought more clarity on the pricing mechanism proposed for the much-anticipated auction for commercial coal mining. ...
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- Gujarat Mineral Development Corp Ltd - India
- Banpu Public Company Limited - Thailand
- Jindal Steel & Power Ltd - India
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- Planning Commission, India
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Essar Steel Hazira Ltd - India
- SMG Consultants - Indonesia
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Vizag Seaport Private Limited - India
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- Straits Asia Resources Limited - Singapore
- Minerals Council of Australia
- Deloitte Consulting - India
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Dalmia Cement Bharat India
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- Rio Tinto Coal - Australia
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Tata Chemicals Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Mercuria Energy - Indonesia
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Posco Energy - South Korea
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Manunggal Multi Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Energy Link Ltd, New Zealand
- PTC India Limited - India
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sojitz Corporation - Japan
- Independent Power Producers Association of India
- Billiton Holdings Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- London Commodity Brokers - England
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- PetroVietnam Power Coal Import and Supply Company
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Cement Manufacturers Association - India
- Karbindo Abesyapradhi - Indoneisa
- Salva Resources Pvt Ltd - India
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
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