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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, 25 November 20
DRY BULK SHIPPING: CHINA REMAINS THE DRIVING FACTOR, BUT COAL POLICY IS DISRUPTING THE MARKET - PETER SAND, BIMCO
The second half of the year has provided some cheer for the dry bulk market, with all ships in the spot market averaging earnings above the break-e ...
Wednesday, 25 November 20
CHINA KICKS AN OWN GOAL WITH AUSTRALIAN COAL - FORBES
China’s annoyance at Australia’s hardline stance on political interference and demands for an independent inquiry into the root cause o ...
Wednesday, 25 November 20
MINISTER - INDONESIA JAN-OCT COAL OUTPUT AT 459 MILLION TONNES - REUTERS
Indonesia coal output in the January to October period was 459 million tonnes, the country’s energy minister told parliament on Monday.
& ...
Wednesday, 25 November 20
INDIA: MORE STEPS NEEDED TO MAKE COMMERCIAL COAL MINING ATTRACTIVE TO GLOBAL PLAYERS - LIVEMINT
India concluded its first commercial coal mine auctions earlier this month. A total of 19 coal mines spread across Madhya Pradesh, Jharkhand, Odish ...
Wednesday, 25 November 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.38 PCT - XINHUA
China Taiyuan coal transaction price index stood at 129.21 points Monday, up 0.38 percent week on week.
The index, released by China ...
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- Energy Development Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- Posco Energy - South Korea
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- Planning Commission, India
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- Directorate Of Revenue Intelligence - India
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- GAC Shipping (India) Pvt Ltd
- Siam City Cement - Thailand
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Eastern Energy - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Aditya Birla Group - India
- ICICI Bank Limited - India
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- Manunggal Multi Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- Leighton Contractors Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- SMC Global Power, Philippines
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- Medco Energi Mining Internasional
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- The University of Queensland
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- PTC India Limited - India
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Wood Mackenzie - Singapore
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Interocean Group of Companies - India
- Coal and Oil Company - UAE
- Gujarat Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Wilmar Investment Holdings
- Ministry of Mines - Canada
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