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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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Saturday, 16 January 21
SEABORNE TRADE IN STEAM COAL DECREASED BY 11.6% FROM 937 MILLION TONNES IN 2019 TO 828 MILLION TONNES IN 2020 - COAL IMPORTERS ASSOCIATION, GERMANY
According to preliminary calculations by the German Coal Importers Association (Verein der Kohlenimporteure e. V.), global hard coal production dec ...
Friday, 15 January 21
OVER US$50 BILLION IN GAS POWER PROJECTS AND LNG IMPORT FACILITIES AT RISK OF CANCELLATION IN BANGLADESH, PAKISTAN AND VIETNAM - IEEFA
Pakistan and Bangladesh have already cancelled tenders for LNG imports
Emerging markets such as Vietnam, Pakistan and Bangladesh tha ...
Friday, 15 January 21
VIETNAM'S EXTRAORDINARY ROOFTOP SOLAR SUCCESS DEALS ANOTHER BLOW TO THE REMAINING COAL PIPELINE - IEEFA
9.3 gigawatts peak of solar capacity, equal to 6 coal power plants, installed in less than a year
Vietnam’s solar power indust ...
Friday, 15 January 21
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 14 January 21
KOREA MIDLAND POWER INVITED BIDS FOR AUSTRALIAN COAL FOR THREE YEARS SUPPLY
COALspot.com: Korea Midland Power Co. Ltd, issued an International tender for total 1,560,000 MT of Min.5,700 kcal/kg NCV coal of Australian Origin ...
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- Minerals Council of Australia
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- Indian Energy Exchange, India
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- Chettinad Cement Corporation Ltd - India
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Indika Energy - Indonesia
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Trasteel International SA, Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- ASAPP Information Group - India
- Wilmar Investment Holdings
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- Romanian Commodities Exchange
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Electricity Authority, New Zealand
- Planning Commission, India
- Interocean Group of Companies - India
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Bangladesh Power Developement Board
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Intertek Mineral Services - Indonesia
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Transport, Egypt
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- Parliament of New Zealand
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- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- The Treasury - Australian Government
- Kideco Jaya Agung - Indonesia
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- Global Coal Blending Company Limited - Australia
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- VISA Power Limited - India
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Australian Coal Association
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Energy Development Corp, Philippines
- Agrawal Coal Company - India
- The University of Queensland
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Madhucon Powers Ltd - India
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
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