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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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Sunday, 07 June 20
A SCRUBBER FITTED 61,000 ULTRAMAX WAS FIXED DELIVERY PHILIPPINES TRIP VIA SOUTH AFRICA REDELIVERY VIETNAM AT $9,500 - BALTIC BRIEFING
Capesize
The small flicker of hope at the beginning of this week has kindled a small fire under the Capesize market. At a paltry $3369 from the ...
Saturday, 06 June 20
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Friday, 05 June 20
COAL INDIA ESTIMATES PRODUCTION GROWTH BY OVERBURDEN REMOVAL - FINANCIAL EXPRESS
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Friday, 05 June 20
U.S. SANCTIONS COMPLIANCE GUIDANCE RELEASED FOR THE GLOBAL MARITIME, ENERGY AND METALS SECTORS - AKIN GUMP
Key Points
On May 14, 2020, OFAC, the Department of State and the U.S. Coast Guard jointly released guidance for persons involved in the ma ...
Friday, 05 June 20
IN THE FIRST 5 MONTHS OF 2020 AUSTRALIA SHIPPED 6.8 MLN TONNES TO VIETNAM - BANCHERO COSTA
In the first 5 months of 2020, global seaborne coal trade declined by as much as -8% year-on-year, according to vessel tracking data from Ref ...
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- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- Mintek Dendrill Indonesia
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Krishnapatnam Port Company Ltd. - India
- SMC Global Power, Philippines
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Bayan Resources Tbk. - Indonesia
- Kaltim Prima Coal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Commonwealth Bank - Australia
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Anglo American - United Kingdom
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Renaissance Capital - South Africa
- Standard Chartered Bank - UAE
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Agrawal Coal Company - India
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- Electricity Authority, New Zealand
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Kepco SPC Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Bhatia International Limited - India
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Videocon Industries ltd - India
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Bhoruka Overseas - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- PTC India Limited - India
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Ind-Barath Power Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- Orica Australia Pty. Ltd.
- Power Finance Corporation Ltd., India
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Essar Steel Hazira Ltd - India
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- Mercator Lines Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
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