Experience - CJH Experts

Hedging Price Risk

Hedging is usually considered a highly complex subject, but we pride ourselves on keeping it simple and providing understandable explanations. We work closely with clients and legal teams to help them understand the relevance of hedging to a variety of cases, many times demonstrating the relevance of hedging in areas never considered before, and the important features of hedging which affect quantum.

Remoteness, causation and mitigation are all relevant to successfully arguing hedging claims. As many as 40% of the cases we are instructed on involve some kind of hedging of market price risk.

We combine our knowledge and understanding of hedging price risk with experience gained over the many cases that we have worked on.

We like to be involved as early as possible, as the initial information obtained during the discovery process is usually vital to prove the case.

Quote:

“CJH has become one of the go-to firms for providing clear and easy-to-understand advice on the impact of hedging in relation to damages in commodity cases resulting from market price movements.”

Contaminated Cargoes

We are often asked to determine quantum in relation to cargoes that have experienced quality degradation before or at the point of delivery.

In almost every case, the one constant is the shipowner's distinct disadvantage in information asymmetry. In our experience, whilst the liability is usually quite ‘clear cut’, it may sometimes be questionable. We can offer essential insights.

In almost all the cases we have been involved, we have significantly reduced the quantum of claim to the long-term benefit of all parties.

If a claim is settled at a fair value, charterers will cease to look at claims against ship owners as profit centres, freight rates will not need to increase off the back of higher insurance premiums, and ship owners and their crew can focus on their core competencies.

Quote:

“Your advice was spot on and played a significant role in achieving a good settlement for our clients.”

Vlcc,Or,Oil,Tanker,Ship,On,Open,Rough,Sea

Delayed Deliveries

The oil trade generally involves moving thousands of metric tonnes of oil from one place to another by sea. This operation has multiple risks and potential damages for the owner, the ultimate receiver and the charterer.

Each party will usually manage these risks privately, without the other parties in the chain necessarily being privy to what each is doing. Yet they may seek recovery of financial losses as a result of delay, be that demurrage or market price movement.

If a ship is delayed who is responsible, why, and what are the damages if any? How do the parties protect against being made responsible for damages that were not incurred? We use our experience of trading commodities and financing to answer these questions.

Quote:

“In general I was more confident of
the weight of the views of Ms Jago than those of…..”

Fraud, or misfortune?

Commodity trading is expensive and involves significant amounts of money and performance and payment risk, including long supply chains with significant systemic risk.

Covid became a catalyst in 2020 for uncovering several significant frauds within the industry. A mad scramble for cash followed, with the banks and other companies who found themselves unpaid, looking to blame and claim from someone as the actual party responsible was generally bankrupt.

CJH has acted as an expert in several of these cases, and others similar to it such as mis-delivery claims, instructed on both sides of the argument.

We have Associates who are trade finance experts who can work with trading and operations experts to provide expert evidence on the breath of issues in such cases.

We have a deep understanding of the issues judges and arbitrators are likely to focus on when reaching their decisions on these matters, and always try to find a balanced and fair approach in what is currently a very emotive area.

Quote:

“With over 120 years’ experience of working with every trading document imaginable, CJH can quickly review massive volumes of information and highlight the areas of concern, allowing us to focus on the relevant issues in what is often a time-critical process.”