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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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Tuesday, 14 November 23
CHINA'S BELT AND ROAD INITIATIVE TURNS AWAY FROM COAL - WOOD MACKENZIE
Ambitious, contentious and big spending, China’s Belt and Road Initiative (BRI) is 10 years old. In that time, China has splashed more than U ...
Friday, 10 November 23
THE COMMODITIES FEED: OIL UNDER PRESSURE - ING
Energy – Brent plummets
The oil market came under significant pressure yesterday. ICE Brent settled 4.19% lower on the day and ...
Friday, 10 November 23
COAL USE AT U.S. POWER PLANTS CONTINUES DOWNWARD SPIRAL; FULL IMPACT ON MINES TO BE FELT IN 2024 - IEEFA
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Friday, 10 November 23
INDIA: NATIONAL COAL INDEX RISES 3.83 POINTS IN SEPTEMBER AMID HIGHER DEMAND - LIVEMINT
The National Coal Index (NCI) rose 3.83 points to 143.91 in September amid growing demand for coal.
The union coal ministry on Tuesd ...
Thursday, 09 November 23
WE'RE PRODUCING TOO MUCH COAL, OIL AND GAS, REPORT SAYS - WSJ
World leaders pledged in 2015 to reduce emissions in a combined effort to limit climate change.
Now they are stepping up production ...
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- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- Indogreen Group - Indonesia
- Ministry of Mines - Canada
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Bhoruka Overseas - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Leighton Contractors Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- Altura Mining Limited, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Bhatia International Limited - India
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Gujarat Mineral Development Corp Ltd - India
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Videocon Industries ltd - India
- Tamil Nadu electricity Board
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Timah Investasi Mineral - Indoneisa
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- Semirara Mining Corp, Philippines
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- White Energy Company Limited
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- PTC India Limited - India
- London Commodity Brokers - England
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- Petron Corporation, Philippines
- Vizag Seaport Private Limited - India
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Malabar Cements Ltd - India
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
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