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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, 18 August 20
BLACKBALLED: WILL COAL BOUNCE BACK FROM SLUMP OR IS IT TERMINAL? - SYDNEY MORNING HERALD
Even by the standards of this miserable year, 2020 has been a shocker for the global coal industry.
As the lockdown kicked in demand ...
Friday, 14 August 20
EIA: COAL PLANTS UNECONOMICAL IN MOST REGIONS - IEEFA
U.S. coal power generation plunged by 30 percent in the first half of 2020 off an already-depressed base, shoved out by natural gas and renewables ...
Thursday, 13 August 20
INDIA SHOULD RECORD A SLIGHT DECREASE IN THERMAL COAL IMPORTS, REACHING A VOLUME OF 167 MILLION TONS BY THE END OF 2020 - ASSOCARBONI
Regarding 2020 thermal coal imports forecasts, Vietnam’s coal imports showed a very strong growth in the first half of 2020 and it is believe ...
Thursday, 13 August 20
INDONESIA REMAINS THE LARGEST EXPORTER OF COAL IN THE WORLD - ASSOCARBONI
According to the last Assocarboni data for 2019, Indonesia remains the largest exporter in the world. Thermal coal exports have in fact reached 456 ...
Wednesday, 12 August 20
VIETNAM WAS THE PROTAGONIST OF A SIGNIFICANT INCREASE IN COAL IMPORTS IN 2019 - ASSOCARBONI
The latest Assocarboni data for 2019 also provide a detailed picture on the trend of the global coal import.
According to Assocarbon ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Posco Energy - South Korea
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- Economic Council, Georgia
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Parry Sugars Refinery, India
- Agrawal Coal Company - India
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- GMR Energy Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Price Waterhouse Coopers - Russia
- Latin American Coal - Colombia
- MS Steel International - UAE
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Australian Coal Association
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- Makarim & Taira - Indonesia
- White Energy Company Limited
- Kepco SPC Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- Kaltim Prima Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Oldendorff Carriers - Singapore
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Vedanta Resources Plc - India
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Australian Commodity Traders Exchange
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Billiton Holdings Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
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