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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, 19 February 20
AS OCEAN TEMPERATURES RISE, SHIPOWNERS LOOK FOR WAYS TO COPE - WARTSILA
The world is heating up, and its oceans are no exception. According to the International Panel on Climate Change (IPCC), the oceans absorb the majo ...
Wednesday, 19 February 20
MARKET INSIGHT - INTERMODAL
The coronavirus outbreak is estimated to negatively affect global economy by at least EUR400bn this year, representing around the 0.4% of global GD ...
Tuesday, 18 February 20
WEEKLY MARKET ANALYSIS - ALLIED
Under such poorly performing market circumstances, many usually take the historical approach, in order to better understand and further analyze the ...
Tuesday, 18 February 20
ADARO SHIPPED 27 PERCENT OF ITS TOTAL COAL PRODUCTION IN 2019 TO INDIA AND CHINA
PT Adaro Energy Tbk (AE) produced 58.03 Mt of coal from PT Adaro Indonesia (AI), Balangan Coal Companies and Adaro Me ...
Tuesday, 18 February 20
ADARO REMAINS POSITIVE ON THE LONG-TERM FUNDAMENTALS OF COAL MARKET SUPPORTED BY THE SOUTHEAST ASIA AND SOUTH ASIA REGION
The global seaborne thermal coal market in 2019 was faced with macro and industry challenges which pushed international coa ...
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- Global Business Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Bulk Trading Sa - Switzerland
- Port Waratah Coal Services - Australia
- Economic Council, Georgia
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Ministry of Transport, Egypt
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- GMR Energy Limited - India
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Mintek Dendrill Indonesia
- Barasentosa Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Bhatia International Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- PTC India Limited - India
- Vizag Seaport Private Limited - India
- Larsen & Toubro Limited - India
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Petrochimia International Co. Ltd.- Taiwan
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- Coal and Oil Company - UAE
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Planning Commission, India
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- OPG Power Generation Pvt Ltd - India
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Eastern Coal Council - USA
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Miang Besar Coal Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
- Agrawal Coal Company - India
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- Sojitz Corporation - Japan
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Kalimantan Lumbung Energi - Indonesia
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Commonwealth Bank - Australia
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Thai Mozambique Logistica
- The University of Queensland
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- Grasim Industreis Ltd - India
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