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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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Friday, 24 July 20
IPA: THERMAL COAL IMPORTS AT MAJOR PORTS DECLINE 35 PC TO 17.71 MT IN APR TO JUNE - ECONOMIC TIMES
These ports had handled 27.13 MT of thermal coal and 14.95 MT of coking coal in the April-June period of the previous financial year
...
Thursday, 23 July 20
KOREAN GENCOS INVITED BIDS FOR TOTAL 1.36 MILLION TONS OF BITUMINOUS COAL FOR OCTOBER 2020 LOADING
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) on behalf of EWP, KOSPO, KOSEP and KOWEPO has issued an international tender for total 1,360,00 ...
Wednesday, 22 July 20
CIL'S COAL SUPPLY TO POWER SECTOR DROPS OVER 21% TO 93.5 MT IN APR-JUN QUARTER - PTI
The supply of coal by state-owned Coal India Ltd to the power sector fell 21.7 percent to 93.5 million tonnes (MT) in the first quarter of the ongo ...
Monday, 20 July 20
KOREA MIDLAND POWER INVITED BIDS FOR TOTAL 2.520 MILLION MT OF BITUMINOUS COAL FOR THREE YEARS
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO), has issued an international tender for total 840,000 of Bituminous Coal to be used at Bo ...
Monday, 20 July 20
CHINA'S JUNE COAL OUTPUT FALLS 1.2% YEAR-ON-YEAR OVER ILLEGAL MINING CHECKS - REUTERS
China’s coal output dropped 1.2% in June on the year to 330 million tonnes, official data showed, as major coal mining areas cracked down on ...
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- Sinarmas Energy and Mining - Indonesia
- Karaikal Port Pvt Ltd - India
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- Edison Trading Spa - Italy
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- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- Marubeni Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Globalindo Alam Lestari - Indonesia
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Rio Tinto Coal - Australia
- Australian Coal Association
- ASAPP Information Group - India
- Borneo Indobara - Indonesia
- GMR Energy Limited - India
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- Thiess Contractors Indonesia
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- Indian Energy Exchange, India
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- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
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- ICICI Bank Limited - India
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Antam Resourcindo - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- Salva Resources Pvt Ltd - India
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- IHS Mccloskey Coal Group - USA
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- VISA Power Limited - India
- The University of Queensland
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- Commonwealth Bank - Australia
- Minerals Council of Australia
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- Africa Commodities Group - South Africa
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- Parliament of New Zealand
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
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- Heidelberg Cement - Germany
- Kaltim Prima Coal - Indonesia
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- Posco Energy - South Korea
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- San Jose City I Power Corp, Philippines
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- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Petron Corporation, Philippines
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Bangladesh Power Developement Board
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
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- PTC India Limited - India
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- Siam City Cement PLC, Thailand
- The State Trading Corporation of India Ltd
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Larsen & Toubro Limited - India
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
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- Parry Sugars Refinery, India
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- Directorate General of MIneral and Coal - Indonesia
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
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