Canada: Govt. to sell 50 ports (List) – That is what you call DIVESTING !!

April 24, 2015 – Ottawa – Transport Canada

The Honourable Lisa Raitt, Minister of Transport, today announced a new Government of Canada program to facilitate the transfer of 50 Transport Canada-owned port facilities to local interests.
The Ports Asset Transfer Program (PATP) is a proactive and structured program that includes engagement, sale and divestiture phases. If a port facility does not sell, the program will offer the port facility for divestiture
Key features of the new Program include:
• specific timelines for negotiations and transactions with interested parties during the sales and divestiture phases;
• broader criteria to allow new port operators to expand or improve ports;
• greater flexibility for continued operations or possible alternate uses; and
• The ability of Canada Port Authorities to acquire ports.
Sales and divestitures open up new commercial possibilities that allow port facilities to reach their full potential and maximize their contribution to economic growth, jobs, and investments in local communities.
Quick Facts
• Funding for this new program was announced as part of Economic Action Plan 2014.
• Since 1996, through its previous Port Divestiture Program, the Government of Canada has divested 499 ports, which has resulted in savings to Canadian taxpayers of over $470 million.
“Our government understands the importance of these port facilities to the transportation needs and economic sustainability of their local communities. The Ports Asset Transfer Program offers an excellent opportunity for interested parties to acquire a port facility and to develop it to take advantage of local business, community development and tourism opportunities.”
The Honorable Lisa Raitt,
Minister of Transport

Port facilities available under the Ports Asset Transfer Program

Newfoundland and Labrador

Cap aux Meules
Harrington Harbour
La Tabatière
Les Méchins
Mont Louis
Pointe-au-Père (Breakwater)

Nova Scotia
Liverpool (Breakwater)
Lunenburg (Breakwater)

Burlington Canal
Owen Sound
Pelee Island
South Baymouth

Berens River

Fort Chipewyan

British Columbia
Bamfield West
Bella Bella
False Bay
Hartley Bay
Kingcome Inlet
Rivers Inlet

The above list reflects the port facilities available under the Ports Asset Transfer Program as of April 24, 2015. Please visit for updates to this list as port facilities are sold or divested. Transport Canada reserves the right to change the number of port facilities available for sale or divestiture as the Program evolves.
Transport Canada is currently in negotiation with interested parties for the port of Cornwall. If interested in the port, please contact Transport Canada so that we can advise you should the port remain available.

Ports Asset Transfer Program
The primary goal of the National Marine Policy, established in 1995, is to improve the efficiency of the marine transportation system. One way to accomplish this goal is by placing port decision-making and operations in the hands of users and other local interests.
Building on the success of Transport Canada’s former Port Divestiture Program (1996-2014), the new Ports Asset Transfer Program (PATP) is a proactive and structured program for the sale or divestiture of 50 Transport Canada-owned port facilities to local interests.
The PATP includes engagement, sale and divestiture phases. During the engagement phase, Transport Canada will communicate with other federal departments, provincial/territorial governments, municipalities, Aboriginal groups and other interested parties to provide information about the Program. This phase will be followed by the sales phase, where Transport Canada-owned port facilities are first offered to other federal departments, the provinces and territories and municipalities. If there is no expressions of interest from these organizations, Transport Canada will then seek expressions of interest from other interested parties including Aboriginal communities, non-government organizations, the private sector, Canada Port Authorities, and individuals. The sales phase is expected to be launched in summer 2015.
The PATP includes specific timelines for negotiations and transactions with interested parties, and greater operational flexibility for new port facility operators including the possibility of developing port sites for desired alternative uses.
If there is no expression of interest during the sales phase, the divestiture phase will follow. This phase could include a grant and/or funding contribution from the Government of Canada to help continue port facility operations and maintenance.
Important notes:
• Interested parties involved in the divestiture phase should be aware that funding support may include a condition that the port facility remains operational for a specified timeframe.
• Parties who consider delaying their participation in the program until the divestiture phase should be aware that Transport Canada cannot guarantee a port facility’s availability after the initial sales period.

Source : Ministry of Transport Canada


Yemen: Vessels banned from entering Yemeni Ports

Members are asked to note that due to the on-going conflict in Yemen, further restrictions have been implemented and further advices and notices have been issued. Before proceeding to Yemen, or even going close to its territorial waters, an urgent risk assessment has to be undertaken.

The developments
The official government of Yemen has now set up a residence in Riyadh, in exile, and is being supported by the Kingdom of Saudi Arabia. From there it has issued a notice that seeks to ban vessels from entering its territorial waters and asked Saudi Arabia to assist in enforcing the ban. Any vessel that is carrying out essential trade, such as carrying food supplies, may enter after receiving permission from both official Yemeni government and Saudi Arabian authorities.

In the meantime, reports continue to come in that indicate vessels seeking to take any type of cargo to Yemen are being subjected to inspection by Saudi Arabian led forces. While some food cargoes are still being sent in to Yemen (which depends on food imports to a very significant degree), these vessels are experiencing significant delays while checks and searches are being undertaken. Other vessels found it not possible to successfully reach Yemeni ports given the blockade and inspections being carried out.

Oil company Total has shut down the Balhaf LNG Terminal and declared force majeure, as the security situation in the area has become difficult. It has been reported that Houthi led forces have approached some major places in Shabwah province, leading to air strikes from the Saudi led coalition. There is also reporting of Al Qaeda led forces coming closer to the area concerned.

The Singapore Maritime & Port Authority has issued an advisory to flagged vessels which calls for safety to be prioritised for crew and ships, along with a recommendation to avoid calling at Yemeni ports. It further directs owners and operators to consult with insurers, such as hull, war as well as P&I before proceeding to Yemen.

The UN Security Council has also passed an arms embargo against the Houthi led forces, as well as their allies supporting the former President Saleh.

Security advice
The Association has repeatedly cautioned members about the deteriorating situation in Yemen, and would again repeat that members with vessels at Yemen or proceeding to Yemen need to urgently undertake a review of the security situation with a view to prioritising the safety of the crew and the vessel. Consultation should be had with local sources, security experts, hull, war and P&I underwriters on an urgent basis.

If members decide to leave Yemen or not call at Yemen (despite the voyage being based on such a call), then this needs to be again considered after a careful factual and legal review. That said, masters of vessels should be supported in making such decisions as they consider necessary to ensure the immediate safety of the crew and vessel at all times.

Going forward it is likely that Yemen will now experience a significant period of conflict, and as such members should very careful consider the matter before agreeing to any charter with an intended Yemeni call or with a liberty to call at any Yemeni port. (Skuld PandI)

Is payment of time charter hire a condition? The Astra reconsidered

In Kuwait Rocks Co v AMB Bulkcarriers Inc (The Astra)1, Flaux J determined that the obligation to make punctual payment of hire under an amended NYPE time charter, whether on its own or in conjunction with an anti-technicality clause, was a condition of the contract. The breach of this condition entitled the vessel owners to both withdraw the vessel and claim damages for loss of profit for the remainder of the charter period.
On 18 March 2015, judgment was handed down in Spar Shipping AS v Grand China Logistics Holding (Group) Co., Ltd2. Popplewell J disagreed with Flaux J’s analysis in The Astra, finding that payment of hire was not a condition of the contract.

The facts of Spar Shipping AS v Grand China Logistics Holding (Group) Co., Ltd The Claimant Owners had let three vessels to Grand China Shipping (Hong Kong) Co Ltd on amended NYPE 1993 forms. The charters were on materially identical terms. They included provisions allowing Owners to withdraw the vessel “failing the punctual and regular payment of the hire, or on any fundamental breach whatsoever” of the charter, and an anti-technicality provision requiring Charterers to be given a three banking day grace period where there was “a failure to make punctual and regular payment of hire due to oversight, negligence, errors or omissions on the part of Charterers or their bankers”.

The Defendant Guarantor provided guarantees in respect of Charterers’ performance under all three charters. Substantial arrears accrued, causing Owners to withdraw the vessels and terminate the charters. Owners claimed against the Guarantor under the guarantees for (i) the balance due under each charter prior to termination; (ii) damages for loss of bargain in respect of the unexpired term of the charters; and (iii) their costs of arbitration proceedings against Charterers.

The court was required to determine various issues, including whether the Guarantor was bound by the guarantees and the correct method of calculating any damages due for the unexpired charter periods. However, it was the question of whether Owners were entitled to those damages which was the focus of the majority of Popplewell J’s detailed judgment.

The Guarantor’s position was that although Owners had a contractual option to withdraw the vessels, in order to claim damages for loss of bargain there had to have been a breach that gave right to damages for repudiation or renunciation. There had been no such breach. Owners contended that payment of hire was a condition of the charters, such that breach entitled them to damages for loss of bargain. Alternatively, if payment of hire was an innominate term, Charterers’ conduct was repudiatory and/or evinced an intention not to pay hire on time, which constituted a renunciation of the charters.

The question of whether the obligation to pay hire punctually and regularly in advance was a condition of the contract was precisely the one which Flaux J had considered (albeit obiter) in The Astra.
Flaux J’s findings in The Astra The charterparty in The Astra was also on an amended NYPE form. The provisions regarding payment of hire were on materially identical terms to those in the instant case. Flaux J determined that the obligation to make punctual payments of hire, whether on its own or in conjunction with the anti-technicality provision, was a condition of the contract. Breach therefore entitled the owners to withdraw the vessel and claim damages for loss of bargain. His main reasons for reaching this conclusion were:

1. Failure to punctually pay hire was sufficiently serious to allow the owners to terminate, indicating that such failure went to the root of the contract. On that basis, the provision was a condition.
2. In commercial contracts, where time is of the essence (i.e. where something must be done, or payment be made, by a specified time), such a provision is a condition of the contract.
3. Certainty is essential in commercial transactions, and there would be no certainty if the owners could only claim damages after withdrawal where the charterers’ conduct was repudiatory. Proving charterers’ repudiation would not always be straightforward. The charterers also required certainty, in that they should know they would be liable for damages for loss of bargain if the owners withdrew the vessel after their failure to pay hire promptly.
Popplewell J’s findings in Spar Shipping AS v Grand China Logistics Holding (Group) Co., Ltd Like Flaux J, Popplewell J conducted a thorough review of the authorities on all relevant issues, in particular the classification of contractual terms as conditions and the question and effect of time being of the essence. He concluded that the obligation to pay hire was not a condition of the contract, and so breach alone did not entitle Owners to damages for loss of bargain for the unexpired charter periods.

Popplewell J disagreed with Flaux J on each of the three points set out above.
1. The provision of a right to terminate on breach of a particular term is not indicative that the term in question is a condition. To have such effect, any agreement between the parties must entitle the defaulting party to treat the contract as repudiated, not simply to terminate. A contractual right to terminate may constitute such an agreement, or it may simply be an option to cancel. On this basis, the fact that the option to cancel is triggered by a breach says nothing about whether the term breached is to be characterised as a condition.
2. The presumption in commercial contracts is that stipulations as to time of payment are not of the essence, unless there is a clear indication to the contrary. The cases which comment on the owners’ commercial interest in punctual advance payment provide a basis for a stringent approach to a contractual option to terminate. However, they provide no additional reason to treat such a term as a condition conferring a right to terminate, which would have very different financial consequences. If owners invoke an option to cancel, they are no longer obliged to fund the operation of the vessel and their interest in punctual payment disappears.
3. It is correct that owners may face uncertainty in having to continue with a charter until such time as they can say that charterers are in repudiatory breach. However, this is no more than any commercial party faces as a result of English law’s requirement that only repudiatory breaches of innominate terms allow a party to put an end to contractual obligations. The principal function of conditions and termination provisions is to ensure certainty so far as the right to terminate is concerned. This can be achieved by an option to cancel without conferring an unmerited right to damages.

Unless and until the question comes before a higher court, it is likely that Popplewell J’s decision will be followed in subsequent cases. He referred in his judgment to a general principle that where there are conflicting decisions of courts of co-ordinate jurisdiction, the later decision is to be preferred, if it has been reached after full consideration of the earlier decision.
Payment of hire: where are we now? The issue of whether owners can claim damages is often crucial to their decision as to whether to withdraw a vessel or to continue with a charter. After The Astra, owners were arguably in a stronger position to give a legal basis to a decision to withdraw their vessel from charterers’ service and claim damages for loss of profit after only a few missed or part hire payments, or even a single such payment.
Owners’ position was also strengthened where charterers sought to make deductions from hire, on the basis that the threat of withdrawal and a damages claim could encourage charterers to pay and claim back alleged deductions, rather than deduct them from an initial hire payment. Although the decision in The Astra was not universally welcomed, it was generally seen as providing some long overdue certainty to a controversial area of debate.
The decision in the present case essentially takes matters back to the position before The Astra. Owners are likely to have to prove a repudiation or renunciation by charterers if they wish to claim damages for loss of profit. A mere failure by charterers to pay, and consequential exercise by owners of a right to withdraw, is unlikely to be sufficient. Owners will need to show that charterers have either evinced an intention not to be bound by the charter terms, or have expressly declared that they are or will be unable to perform their obligations in some essential respect. This raises difficult questions such as the number of missed or short hire payments that amount to an “intention no longer to be bound”, and places a higher evidential burden on owners.
The decision in this case does not affect owners’ right to withdraw the vessel from charterers’ service, if the charter gives them that right, nor does it affect their entitlement to claim unpaid hire that has already fallen due. What it will affect is owners’ entitlement to damages for loss of bargain for the unexpired charter period. The temporary strengthening of owners’ position arguably provided by The Astra may now have come to an end.

Source: Reed Smith

Libya’s Biggest Oil Port May Reopen in 2 weeks under the ‘new’ NOC control

Libya’s biggest oil port may reopen in two weeks as fighting in the area recedes amid increasing competition between the divided North African nation’s rival governments for the control of crude exports.
Al Mabrook Bu Seif, the chairman of state-run National Oil Corp. appointed by the elected government in the east of the country, said his team will start contacting existing clients to coordinate crude loadings at oil ports, replacing the company’s rival management in the capital, Tripoli, where a cabinet backed by Islamist militias is ruling over most of the western region.
“Our management and marketing team are ready to deal with our existing clients and partners,” Abu Seif said in an interview Saturday in the eastern city of Al-Bayda, the seat of the internationally recognized government of Abdullah al-Thinni. “We will start contacting them today,” he said, without mentioning specific companies.
Libya, holder of Africa’s largest oil reserves, has been split since last year when a coalition of Islamist militias captured Tripoli, forcing the elected government to move to the eastern region. The conflict has damaged or shut oil fields, pipelines and ports.
Force majeure may be lifted in two weeks on loadings at Es Sider, Libya’s largest export terminal, and at neighboring Ras Lanuf, the third-largest, as Islamist militias pulled out from the region, signaling the end of a campaign they began in December to capture the two ports, said Abu Seif, whose team operates from Ras Lanuf. He called on buyers to also coordinate with his management for loadings at the two ports under the control of the Tripoli-based government, in the western region.
Ports Loading

Es Sider, with a loading capacity of 340,000 barrels a day, needs at least one month to resume exports as pipelines around storage tanks have been damaged and electrical supply cut by milita attacks, the port’s emergency team chief Abdulwahed al-Sheikhy said by phone on Friday. Of its 19 storage tanks, 10 are intact, containing 2.14 million barrels of crude ready for export, he said. Ras Lanuf, with a loading capacity of 220,000 barrels a day, suffered no damage.

Al-Thinni’s cabinet on Saturday authorized its management at NOC to open a bank account in the United Arab Emirates, the Libya News Agency reported, citing a government statement. They also authorized NOC to swap crude exports for gasoline imports in order to ease a local shortage of fuel, it said.
Oil Payments

The statement didn’t say if the opening of a U.A.E. bank account was meant to bolster the Al-Thinni government’s ability to get funding. Libya’s central bank, where oil buyers transfer their payment under the existing system, has refused to take sides and currently only pays expenses approved before the country split up.
Al-Thinni’s administration is preparing for the reopening of Es Sider and Ras Lanuf oil ports, even if the emergence of a militant armed group affiliated with Islamic State derails operations at the terminals, Al-Thinni said at a news conference in Al-Bayda on Saturday.

“We authorize National Oil Corp. to start preparing for a resumption of exports from the Oil Crescent,” he said, referring to the name of the region around Es Sider. “Daech’s activities in the region are a threat,” he said, referring to Islamic State.

Libya has become one of the smallest producers in the Organization of Petroleum Exporting Countries, with a daily output of 500,000 barrels to 600,000 barrels, compared with about 1.6 million barrels before the 2011 rebellion that ended Muammar Qaddafi’s 42-year rule.

Al-Thinni’s government controls five of Libya’s nine oil export terminals, while the Islamist-backed administration of Omar-al-Hassi controls two — Zawiya, the country’s second-largest, and Mellitah, the fourth-largest. The remaining two are offshore loading platforms.

Bloomberg/HSN 6.4.2015