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Monday, 01 April 19
FORCE MAJEURE SUCCESS NOT A SEA CHANGE - BALTIC EXCHANGE
 KNOWLEDGE TO ELEVATE
It is difficult to successfully argue that contractual performance has been prevented or delayed by force majeure. This is in part because English courts or arbitration tribunals will interpret these clauses strictly and narrowly against the party seeking to rely on them.
Recent decisions, including Triple Point Technology v PTT (2017) and Seadrill Ghana v Tullow Ghana (2018), are evidence of this approach. However, Sucden Middle-East, represented by Nick Fisher of HFW, has recently relied successfully on such a clause in the Commercial Court, on appeal from arbitration.
The case, Sucden Middle-East v Yagci Denizcilik Ve Ticaret Limited Sirketi, “The Mv Muammer Yagci”, involved a shipment of sugar to Algeria on the Sugar Charter Party 1999 form. The facts found by the arbitral tribunal were that when the cargo arrived in Algeria, the cargo-receivers submitted false import documents to local customs authorities. The local customs responded by seizing the cargo, using powers under customs laws and regulations.
A delay to discharging the cargo of four and a half months ensued. Sucden, as charterers, claimed this delay fell within the exceptions to laytime running under clause 28. Owners disagreed. At first instance, the arbitral tribunal agreed with owners.
Charterers appealed to the Commercial Court. Permission to bring the appeal was given on the basis that the question of law was one of general public importance, as it related to a standard form contract in wide commercial usage.
The judgement
The question before the Commercial Court was: “Where a cargo is seized by the local customs authorities at the discharge port causing a delay to discharge, is the time so lost caused by ‘government interferences’ within the meaning of clause 28 of the Sugar Charter Party 1999 form?” Clause 28 reads:
“Strikes and Force Majeure
In the event that whilst at or off the loading place or discharging place the loading and/or discharging of the vessel is prevented or delayed by any of the following occurrences: strikes, riots, civil commotions, lockouts of men, accidents and/or breakdowns on railways, stoppages on railway and/or river and/or canal by ice or frost, mechanical breakdowns at mechanical loading plants, government interferences, vessel being inoperative or rendered inoperative due to terms and conditions of employment of the Officers and Crew, time so lost shall not count as laytime on demurrage or detention…”
In deciding whether a force majeure event had occurred, the Court focused on the construction of “government interferences”. It was fairly straightforward to establish that a government entity acting in a sovereign capacity was involved, but owners argued that the government being involved was not enough and that there had to be “interferences”. In reaching its decision that there had been no interference, the tribunal had considered it a key point that seizure was an “ordinary” action. The Court rejected this conclusion. It held that the seizure of the cargo was not routine and did fall within the meaning of “interferences”. Seizure is a significant exercise of executive power and therefore could not be regarded as “ordinary”. Suspected or predictable consequences are not the same as ordinary actions (such as the inspection of the cargo by a government surveyor): “In the usual course of things, cargo is not seized and property rights are not invaded in that way.” The very fact that false documents were involved showed that the circumstances were not routine.
The Court emphasised that it was of “real importance” that its conclusion on the language was not difficult to apply, nor did it in any way offend commercial common sense.
The owners’ causation argument was also dismissed, as it was held that the seizure caused the delay, even if the submission of false documents caused the seizure.
Further detail
In allowing the appeal, the Court still maintained the strict and narrow approach to force majeure, stressing that “the answer given to the question is only a narrow ‘yes’. It is ‘yes’ where the circumstances are as in the present case. The answer does not address all of the circumstances that may come within or fall outside clause 28. The answer is concerned only with the seizure of a cargo and with that seizure by a customs authority that is a State revenue authority acting in a sovereign capacity”.
This judgment gives some welcome publicly-available guidance on the interpretation of a force majeure clause in a standard form widely used in sugar trading. While the charterers were successfully able to rely on the force majeure clause in this case, it does not signal a change in the strict and narrow approach typically adopted by the English courts.
Source: Baltic Exchange
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Friday, 09 July 21
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Tuesday, 06 July 21
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Tuesday, 06 July 21
INDONESIAN 4,200 INDEX HAS ALSO INCREASED TO OVER USD50 PER TONNE SINCE MAY THIS YEAR REFLECTING STRONG CHINESE IMPORT DEMAND - FITCH RATINGS
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- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bangladesh Power Developement Board
- Krishnapatnam Port Company Ltd. - India
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- GMR Energy Limited - India
- Coalindo Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Singapore Mercantile Exchange
- Sindya Power Generating Company Private Ltd
- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Ambuja Cements Ltd - India
- Anglo American - United Kingdom
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
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- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- Billiton Holdings Pty Ltd - Australia
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Kideco Jaya Agung - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Australian Coal Association
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- Kartika Selabumi Mining - Indonesia
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- Indonesian Coal Mining Association
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Altura Mining Limited, Indonesia
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Siam City Cement PLC, Thailand
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- Bhoruka Overseas - Indonesia
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Ministry of Mines - Canada
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Thai Mozambique Logistica
- Bhushan Steel Limited - India
- Eastern Energy - Thailand
- Deloitte Consulting - India
- Therma Luzon, Inc, Philippines
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- Planning Commission, India
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- CNBM International Corporation - China
- Karaikal Port Pvt Ltd - India
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- International Coal Ventures Pvt Ltd - India
- Minerals Council of Australia
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Uttam Galva Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Kobexindo Tractors - Indoneisa
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