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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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Tuesday, 01 June 21
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.02 PCT - XINHUA
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Tuesday, 01 June 21
BUMA PRODUCED 11.4 MILLION TONNES OF COAL IN 4Q 2020, 5% LOWER COMPARED TO 12.2 MILLION TONNES IN 4Q 2019
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Sunday, 30 May 21
PAKISTAN IS PLANNING TO END COAL IMPORTS, WORSENING OUTLOOK FOR SOUTH AFRICAN COAL - IEEFA
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As Thungela Resources’ CEO attempts to talk up ...
Sunday, 30 May 21
G7 COAL FINANCE EXIT AND WHY IT MATTERS FOR INDIA - IEEFA
While India doesn’t rely on export credit finance to fund new coal plants, there are material implications
The commitment by the Group o ...
Saturday, 29 May 21
SKULD’S IMO 2020 SULPHUR CAP EXPERIENCE
More than a year has passed since the International Maritime Organization (IMO) mandate for the 0.50% sulphur cap for marine fuel (MARPOL Annex VI) ...
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- Economic Council, Georgia
- Xindia Steels Limited - India
- Planning Commission, India
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- European Bulk Services B.V. - Netherlands
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- Ministry of Finance - Indonesia
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- Sarangani Energy Corporation, Philippines
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- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
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- Parliament of New Zealand
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- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
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- Standard Chartered Bank - UAE
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- IEA Clean Coal Centre - UK
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- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
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- Coal and Oil Company - UAE
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- Australian Commodity Traders Exchange
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- Makarim & Taira - Indonesia
- Interocean Group of Companies - India
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
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- Romanian Commodities Exchange
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- Bukit Makmur.PT - Indonesia
- New Zealand Coal & Carbon
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- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
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- Commonwealth Bank - Australia
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- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
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- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- Pendopo Energi Batubara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
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- Oldendorff Carriers - Singapore
- Formosa Plastics Group - Taiwan
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- Wilmar Investment Holdings
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- Renaissance Capital - South Africa
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- Chettinad Cement Corporation Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mjunction Services Limited - India
- India Bulls Power Limited - India
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- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- The University of Queensland
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- Ceylon Electricity Board - Sri Lanka
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- Posco Energy - South Korea
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- The State Trading Corporation of India Ltd
- Maharashtra Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Madhucon Powers Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- Iligan Light & Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhoruka Overseas - Indonesia
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Australian Coal Association
- Kartika Selabumi Mining - Indonesia
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Eastern Coal Council - USA
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Indogreen Group - Indonesia
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
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