MENA REGION: PLUNGING OILS PRICES – World Bank Economic Brief – Januray 2015

 

World Bank Report: MENA QUARTERLY ECONOMIC BRIEF – issued in January 2015:

World Bank – MENA QUARTERLY ECONOMIC BRIEF JANUARY 2015

 

 

 

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Greece: Ship Owners Fear Syriza Tax Plan

Several owners in Greece’s important shipping sector say they fear the new government led by radical-left party Syriza will levy higher taxes that the industry can’t afford.
If the industry is unable to reach a compromise with the government, elected Sunday, some owners say they plan to limit their operations in Greece or move out of the country altogether.
Shipping is one of the few sectors in Greece that has successfully weathered a ravaging debt crisis which wiped out about a quarter of the economy over the past five years and impoverished much of the population. It is one of the country’s biggest employers, providing about quarter of a million jobs, and makes up 8% of the economic output in a country where unemployment is running close to 30%.
But many Greeks also perceive shipowners as a privileged group, protected by special tax laws, who haven’t contributed their fair share to push the country out of the crisis. Many within Syriza share such views and say that they will push the shipping industry to pay more.
“Whatever we plan must be in the context of what Greek society is going through,” Theodoros Dritsas, the Syriza party official widely expected to be named merchant-marine minister, told a New Year’s gathering at the Hellenic Chamber of Shipping earlier this month. He said shipping, as the country’s most productive sector, must be prepared to “lift the heaviest possible burden” to help the country out of the crisis.
A Syriza policy paper before the elections called for a “new national agreement” with the shipping sector that would include the abolition of various tax breaks.
As in the rest of the world, shipping in Greece is subject only to tonnage tax, a complicated but relatively modest annual charge paid to the government based on the tonnage of the vessels operated by companies. The owners agreed in 2013 to double the amount they pay as a move of goodwill, but they say this is as far as they will go.
Union of Greek Shipowners President Theodore Veniamis told a maritime forum in Athens last week that owners want to stay in Greece, but keeping the existing laws governing the sector is “a non-negotiable requirement.”
Greeks are the world’s biggest shipowners, controlling around 15% of all vessels in the water, or about 4,000 ships in total, according to shipping-data provider VesselsValue.com. In recent years, the sector’s total annual revenue has amounted to around $15 billion.
“I don’t know if the new government knows that the majority [of the Athens-based companies] are involved in dry-bulk shipping, which has been in the worst-ever state over the last four to five years. These guys don’t even have money to pay their debts,” said Harry Vafias, who runs Stealth Gas Ltd., a New York-listed operator of 63 liquid-petroleum-gas carriers.
Dry-bulk shipping, which moves grains, coal, iron ore and other commodities, has been marred by overcapacity of around 20% above demand over the past decade, analysts estimate. The excess tonnage in the water suppresses freight rates, the main source of income for shipping companies.
Mr. Vafias said he is willing to make a larger contribution to the new government, “because I love my country and because I’ve been lucky enough to operate ships that make money.”
“But this view is not reflected by the vast majority of my peers, who have seen the value of their ships fall by 30% to 40% over the past few years,” Mr. Vafias continued. “So if the government gets nasty and doesn’t work towards a compromise they will pack up and go, and the state will lose the tax it currently gets, the ships will be reflagged and jobs will be lost.”
Five other owners contacted by The Wall Street Journal said they all had a “Plan B” that involves relocating to shipping centers such as London, Monaco, Singapore or Dubai. They said they want to wait for the new government to spell out its shipping policy before going public with their plans.

WSJ/HSN 28.1.2015

Central Bank of Libya: Press Release on its Public Finances (15.01.2015)

 

Here is the CBL (Central Bank of Libya) statement on its public finances issued on 15.01.2015 !!!
Link for the English Statement:
http://cbl.gov.ly/eng/index.php?option=com_content&view=article&id=307:central-bank-of-libya-statement-on-public-finances&catid=1:latest-news
Link for the Arabic Statement:
http://cbl.gov.ly/ar/index.php?option=com_content&view=article&id=728:2014-12-02-09-03-55&catid=1:latest-news

 

 

More pitfalls for owners looking to terminate for unpaid hire

It is a debatable point whether or not the obligation to pay hire under a time charter is a condition of the contract or not, notwithstanding the obiter comments of Mr Justice Flaux in the Astra [2013] EWHC 865 (see the Shipping E-Brief July 2013). Making payment under a commercial contract is said to be “not of the essence of the contract” and therefore not a condition. The significance is that a breach of condition allows the innocent party to terminate the contract in addition to claiming damages. Otherwise, he may be limited to his damages claim but unable to terminate the contract unless the failure to make payment, or indeed making repeated late payment under an instalment contract, amounts to a repudiatory breach of the contract.

The traditional view is that, in order to terminate a time charter and claim damages for losses suffered following a failure to pay hire, the charterer’s conduct must be shown to be (i) repudiatory in the sense that the breach deprives the owner of substantially the whole benefit of the charter; and/or (ii) renunciatory in the sense that it evinces an intention on the charterer’s part no longer to perform the charter at all or to perform the charter in a manner substantially inconsistent with his contractual obligations.

It will very much depend on the facts and circumstances in any given case whether the non-payment or late payment of hire instalments under a time charter amounts to a repudiatory breach. This often requires the owner to make a difficult decision as to whether the charterer’s failure to pay a number of hire instalments, or paying them late, entitles him, the owner, to terminate the charter. If the owner “calls it wrong”, he can find himself in repudiatory breach for wrongful termination and facing a claim for damages from the charterer.
Januzaj v. Valilas is not a shipping case but deals with general principles concerning the law on repudiation. It arguably introduces a further potential pitfall for owners seeking to rely on multiple failures to pay hire, or repeated late payments of hire, in order to demonstrate repudiatory conduct on the part of a charterer.

The background facts
The Claimant was a dentist operating his practice from the Defendant’s premises. The Claimant had agreed to pay the Defendant half his earnings from his practice in return for use of the premises. The Claimant’s earnings came from the UK’s National Health Service (the “NHS”) under an arrangement whereby the Claimant was paid in advance in equal monthly instalments for his work. If, at the end of the year, the Claimant had not done sufficient work, then any over-payment of his advance earnings had to be refunded to the NHS.
A dispute arose between the Claimant and Defendant, as a result of which the Claimant stopped any further payments to the Defendant. The Claimant was particularly concerned that the Defendant would not return his half of any advance payments if a refund became due to the NHS. The Claimant failed to make three monthly payments to the Defendant between August and October. In November, the Defendant terminated the agreement on the basis of the Claimant’s repudiatory breach of contract.

The Court decisions
At first instance, the Court found that the agreement had been terminated wrongfully and awarded the Claimant damages. The majority of the Court of Appeal upheld this decision on the basis that, on the facts, the Defendant should have been aware that the Claimant was only intending to pay late as opposed to evincing an intention not to pay at all. By contrast, the dissenting judgment concluded that the failure to make three payments in a row was a repudiatory breach.

In the context of time charter hire disputes
The onus will be on an owner to demonstrate that he has been deprived of substantially the whole benefit of his time charter and/or that the charterer does not intend to make any further hire payments in the future. Furthermore, The Brimnes [1972] 2 Lloyd’s Rep. 465 made it clear that even persistent late payment of hire instalments will not necessarily amount to a repudiation of the charter.

One of the majority appeal judges in Januzaj v. Valilas suggested that, in determining whether the number of missed or late payments was repudiatory, regard had to be given to the length of the contract as a whole. There is, however, previous case law to the effect that, in deciding whether repeated late payments are repudiatory, it will not simply be a question of looking at the number of payment instalments required over the whole of the contractual period and comparing that number with the number of occasions on which payment has not been made or has been made late. It is also necessary to look at the type of contract in question.

Januzaj v. Valilas was very much decided on its own facts. In that case, the dentist who missed three monthly payments had, in previous years, always managed to complete the requisite amount of work he had to perform for the NHS over the course of the year and so no refund to the NHS had ever been necessary. The majority of the Court of Appeal concluded that the Defendant should, therefore, have known that the Claimant would complete all his NHS work in the relevant year also, so that no refund would have been required and the Claimant would eventually have paid the Defendant all that was owing to him, albeit somewhat late. That was not sufficient to amount to repudiatory conduct.

In a time charter context, however, and in a challenging economic climate, it will often not be at all clear to an owner that he will eventually get his money, albeit late. Charterers may be on the brink of insolvency and may be looking to negotiate a reduced hire rate rather than comply with their original contractual obligations. There may also be a history of repeated defaults on the part of the charterer that can render his behaviour repudiatory as a whole. Nonetheless, Januzaj v. Valilas gives an owner faced with a defaulting charterer some cause for concern that he will be jumping the gun if he chooses to terminate where a charterer has missed a few hire payments. Is it relevant to consider the length of the charter when deciding whether several unpaid instalments is repudiatory? Are those payments just late or is the charterer not going to pay at all?

Comment
Given the Court of Appeal decision in Januzaj v. Valilas, an owner will need to be cautious about terminating for late payments of hire and there remains uncertainty over exactly how many non-payments will be sufficient to justify a decision by the owner to terminate the charter. Defaulting charterers often suggest to owners that they intend to pay outstanding hire in the future. Such a defaulting charterer, faced with an owner who chooses to terminate the charter as a result, may now argue that the outstanding payments were merely late or that only a few non-payments of hire in the context of a long-term charter is not repudiatory.

Source: Ince&Co/HSN (13.1.2015)

 

2.000 Tons Sheer Leg Crane for SALE

Built: 2009, Korea
Dimensions: (LxBxD) 85.0 x 42.0 x 7.0m
Draft: 4.6m
Class: KR
Deck Camber: 500mm
Complements: 15p
Main Hoist:
• Main Hook: 500t x 4 (TTL 200m/t)
• Out Reach: 34.7m
Aux. Hoist:
• Aux Hook: 200t x 1
• Out Reach: 40.0m
Mooring Winch: 30t x 6
Windrass: 40t x 2
Main Generator: 1,170kw x 2
Ballast Pump: 550m2/hour x 2
Main Hoist Winch: 55t x 4
Aux Hoist Winch: 30t x 1
Boom Luffing Winch: 65t x 2
Assist Winch: 10t x 2
Whip Winch: 10t x 4

Attached herebelow is copy of the Class registration, G/A plan and a picture of the unit:

KR Class

GA

Sheer Leg 1

 

INTERNATIONAL SHIPPING COMMUNITY: SOS

SHIPPING SOS

Given the recent 2 abondonned cargo ships with over 1200 people of all ages, The International Shipping Comunity must now react immediately to help prevent such traffic and get rid of these low-life, parasite and inhuman people behind it. How come that with all the available technology, PSC (port state control), Coast Guards and other Govt bodies checking shipping – such vessels can operate in such way (the Ezeden – ex Joudi S – has apparently sailed all the way from Istanbul to South adriatic without being detected or disturbed in any way). The chartering community must know or have come across these ships and their Owners in the recent past !!!