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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, 15 July 20
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Monday, 13 July 20
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Capesize
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- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- Vedanta Resources Plc - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- The University of Queensland
- Coal and Oil Company - UAE
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Sical Logistics Limited - India
- Sree Jayajothi Cements Limited - India
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Lanco Infratech Ltd - India
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- London Commodity Brokers - England
- VISA Power Limited - India
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- Malabar Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- PTC India Limited - India
- Thai Mozambique Logistica
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petron Corporation, Philippines
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- Georgia Ports Authority, United States
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- Australian Coal Association
- Ministry of Finance - Indonesia
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- SMG Consultants - Indonesia
- White Energy Company Limited
- Medco Energi Mining Internasional
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Aditya Birla Group - India
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- Latin American Coal - Colombia
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Independent Power Producers Association of India
- Grasim Industreis Ltd - India
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
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