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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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Wednesday, 07 April 21
KOMIPO ISSUED A TENDER FOR TOTAL 1,560,000 METRIC TONS OF BITUMINOUS COAL
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for total 1,560,000 Metric Tons of Bituminous coal for i ...
Wednesday, 07 April 21
MARKET INSIGHT - INTERMODAL
Following the end of the catholic easter, during which the majority of shipping market participants were on holidays, it is interesting to note a f ...
Wednesday, 07 April 21
COAL USED TO GENERATE ELECTRIC POWER IN U.S. WILL INCREASE BY 13 PERCENT TO 495 MMST IN 2021 - EIA
EIA expects U.S. coal production to total 585 MMst in 2021, 46 MMst (9%) more than in 2020. In 2022, EIA expects coal production to grow by an addi ...
Wednesday, 31 March 21
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.12 PCT - XINHUA
China Taiyuan coal transaction price index stood at 139.03 points Monday, up 0.12 percent week on week.
The index, released by China ...
Wednesday, 31 March 21
MARKET INSIGHT - INTERMODAL
Over the past week, the biggest story has been the blockage of the Suez Canal, as a result of the grounding of the container ship Ever Given. At th ...
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- GAC Shipping (India) Pvt Ltd
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- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
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- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
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- Planning Commission, India
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- MS Steel International - UAE
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- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
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- Pendopo Energi Batubara - Indonesia
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- Chamber of Mines of South Africa
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- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
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- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
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- Thiess Contractors Indonesia
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- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
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- Global Coal Blending Company Limited - Australia
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- Energy Link Ltd, New Zealand
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- Economic Council, Georgia
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- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parry Sugars Refinery, India
- Antam Resourcindo - Indonesia
- Vedanta Resources Plc - India
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- LBH Netherlands Bv - Netherlands
- Gujarat Electricity Regulatory Commission - India
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- SMC Global Power, Philippines
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- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
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- Posco Energy - South Korea
- PowerSource Philippines DevCo
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- PNOC Exploration Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- India Bulls Power Limited - India
- The State Trading Corporation of India Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
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- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- Indonesian Coal Mining Association
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- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- Parliament of New Zealand
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- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- The University of Queensland
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Coal Association
- Thai Mozambique Logistica
- Kaltim Prima Coal - Indonesia
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- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
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- Miang Besar Coal Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Mjunction Services Limited - India
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- Madhucon Powers Ltd - India
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Merrill Lynch Commodities Europe
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- ASAPP Information Group - India
- Siam City Cement - Thailand
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
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