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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, 07 January 21
FITCH FORECASTS DOUBLING IN ASIAN WIND, SOLAR CAPACITY BY 2029, TOPPING 1,500GW
Despite some near-term delays due to the Covid-19 pandemic, solar power and offshore wind will drive steep growth in non-hydro renewables in Asia, ...
Wednesday, 06 January 21
INDONESIA EXCEEDS COAL PRODUCTION TARGET IN 2020
Indonesian coal production reached 557.54 Million Tons in 2020 1.37% higher than of last year’s total target of 550.00 Million Tons, accordin ...
Wednesday, 06 January 21
CHINESE CITIES REPORTEDLY GO DARK AS COUNTRY FACES SHORTAGE OF COAL, A MAJOR AUSTRALIAN EXPORT - CNBC
Several major Chinese cities have reportedly gone dark as authorities limit power usage, citing a shortage of coal.
Analysts said pr ...
Tuesday, 05 January 21
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP - XINHUA
China Taiyuan coal transaction price index stood at 136 points Monday, up 0.91 percent week on week.
The index, released by China Ta ...
Tuesday, 05 January 21
THE INDONESIA COAL PRICE REFERENCE SOARS TO HIGHEST ONE-MONTH INCREASE SINCE DECEMBER 2016
COALspot.com: The Indonesia coal price reference for January 2021 settles above $75 for the first time since July 2019 and to highest one-month inc ...
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- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- Power Finance Corporation Ltd., India
- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Salva Resources Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- ICICI Bank Limited - India
- CNBM International Corporation - China
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- Malabar Cements Ltd - India
- Medco Energi Mining Internasional
- Mercuria Energy - Indonesia
- White Energy Company Limited
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- Australian Coal Association
- Aditya Birla Group - India
- Planning Commission, India
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- Thai Mozambique Logistica
- Parliament of New Zealand
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Marubeni Corporation - India
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Petron Corporation, Philippines
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- VISA Power Limited - India
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- The Treasury - Australian Government
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Ind-Barath Power Infra Limited - India
- Larsen & Toubro Limited - India
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Indonesian Coal Mining Association
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Attock Cement Pakistan Limited
- Jindal Steel & Power Ltd - India
- Directorate Of Revenue Intelligence - India
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Globalindo Alam Lestari - Indonesia
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Rio Tinto Coal - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Binh Thuan Hamico - Vietnam
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- India Bulls Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
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