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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, 17 December 20
CHINA'S BAN IS LESS OF A THREAT TO AUSTRALIA'S COAL INDUSTRY THAN INTERNATIONAL CLIMATE AMBITION - IEEFA
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Thursday, 17 December 20
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Wednesday, 16 December 20
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Wednesday, 16 December 20
RUSSIA REVISES DOWN EXPORT EXPECTATION - FITCH
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Wednesday, 16 December 20
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- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
- Malabar Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Bukit Baiduri Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Central Java Power - Indonesia
- White Energy Company Limited
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- International Coal Ventures Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- Mercator Lines Limited - India
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- VISA Power Limited - India
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- Cement Manufacturers Association - India
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Coastal Gujarat Power Limited - India
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Merrill Lynch Commodities Europe
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- Aditya Birla Group - India
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Renaissance Capital - South Africa
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
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