Case Scenario2 - 3
Answers3 - 10
The objective of the assignment is to provide a tanker ship manager with a general overview of legal agreements and contracts typically used in the tanker market. In addition, a hypothetical case has been put forward that would best illustrate the interrelation of the typical agreements, hence an example of how the agreement "mechanics' work in a legal framework. It is important to note that in the tanker market that buyers and sellers are, by far, large corporations and refinery owners that limit the risk of "non-payments".
However, the collapse of Enron in the United States of America proved that legal agreements and dealings should be taken seriously and correctness of the legal arrangements and agreements are the elements to ensure payment and cargo transactions, and not the "reputation" of a company in the industry.
This assignment lists typical documents and agreements used in the tanker market and how these agreements are arranged between different parties in the movement of oil.
The assignment, developed in cooperation with legal advisors for Saudi Aramco and Vela International Marine Ltd, and scenario is as follows:
Saudi Aramco & AMEX sign a Sales Contract that AMEX would purchase 2.5 million barrels of crude oil from Saudi Aramco. AMEX then signs a Contract of Afreightment (COA) with Bolanter (Bolanter handles cargo movements with Saudi Aramco customers after Sales Contracts are signed between Saudi Aramco and its customers); the COA states that the cargo will be carried on a FOB basis. Bolanter signs a Charter Party agreement with Vela to carry the oil cargo. Vela has no ships available and signs a Charter Party agreement with Mearsk Tanker to spot charter a VLCC tanker to carry the 2.5 million...