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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 October 20
U.S. COAL PRODUCTION TO DECREASE BY 26 PERCENT IN 2020 COMPARED TO 2019 - EIA
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Friday, 02 October 20
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- SMG Consultants - Indonesia
- MS Steel International - UAE
- Thiess Contractors Indonesia
- Indian Oil Corporation Limited
- Economic Council, Georgia
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- Singapore Mercantile Exchange
- VISA Power Limited - India
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- Indian Energy Exchange, India
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- Tata Chemicals Ltd - India
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Tamil Nadu electricity Board
- Meenaskhi Energy Private Limited - India
- New Zealand Coal & Carbon
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- Minerals Council of Australia
- Bahari Cakrawala Sebuku - Indonesia
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- Mintek Dendrill Indonesia
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- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
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- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Attock Cement Pakistan Limited
- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
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- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
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- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- LBH Netherlands Bv - Netherlands
- Grasim Industreis Ltd - India
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- Karbindo Abesyapradhi - Indoneisa
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- Salva Resources Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Cigading International Bulk Terminal - Indonesia
- Star Paper Mills Limited - India
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
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- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
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- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
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- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Goldman Sachs - Singapore
- White Energy Company Limited
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- Directorate Of Revenue Intelligence - India
- The University of Queensland
- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Altura Mining Limited, Indonesia
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- Kobexindo Tractors - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- ICICI Bank Limited - India
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Petron Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
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- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Parliament of New Zealand
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- Cement Manufacturers Association - India
- Bangladesh Power Developement Board
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- SMC Global Power, Philippines
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Straits Asia Resources Limited - Singapore
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