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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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Thursday, 01 July 21
WHY INDIA’S SOLAR POWER TARIFFS ARE CLIMBING AFTER HITTING RECORD LOWS LAST YEAR - IEEFA
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Thursday, 01 July 21
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Wednesday, 30 June 21
DELTA DUNIA MAKMUR RECORDED AN IMPROVED REVENUE IN Q1 2021; REVENUE INCREASED BY 49% QOQ TO US$160 MILLION ON THE BACK OF COAL PRICE RECOVERY
PT Delta Dunia Makmur Tbk. (“DOID”) released its consolidated financial and operating results that include its primary and wholly-owned ...
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- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
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- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Tata Chemicals Ltd - India
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- Star Paper Mills Limited - India
- IEA Clean Coal Centre - UK
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- Siam City Cement PLC, Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
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- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
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- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- Parliament of New Zealand
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- Electricity Authority, New Zealand
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- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
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- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
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- Indian Energy Exchange, India
- Economic Council, Georgia
- Tamil Nadu electricity Board
- The University of Queensland
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Karbindo Abesyapradhi - Indoneisa
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- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
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- Karaikal Port Pvt Ltd - India
- Georgia Ports Authority, United States
- Samtan Co., Ltd - South Korea
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- Wilmar Investment Holdings
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- Sarangani Energy Corporation, Philippines
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Indogreen Group - Indonesia
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- Australian Commodity Traders Exchange
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- Lanco Infratech Ltd - India
- White Energy Company Limited
- PowerSource Philippines DevCo
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- CNBM International Corporation - China
- GMR Energy Limited - India
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
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- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- Toyota Tsusho Corporation, Japan
- Simpson Spence & Young - Indonesia
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- TNB Fuel Sdn Bhd - Malaysia
- Intertek Mineral Services - Indonesia
- Thiess Contractors Indonesia
- Renaissance Capital - South Africa
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
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- Central Java Power - Indonesia
- Minerals Council of Australia
- San Jose City I Power Corp, Philippines
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Mjunction Services Limited - India
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
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- Semirara Mining Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Standard Chartered Bank - UAE
- New Zealand Coal & Carbon
- Bharathi Cement Corporation - India
- Australian Coal Association
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- Straits Asia Resources Limited - Singapore
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Planning Commission, India
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- Africa Commodities Group - South Africa
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- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
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- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- Xindia Steels Limited - India
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