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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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Thursday, 04 June 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 04 June 20
DON'T FORGET THE REAL PURPOSE OF RISK ASSESSMENTS - GARD
KNOWLEDGE TO ELEVATE
When doing a risk assessment, we often overcomplicate it and forget its real purpose.
Rather than ensuring that crew ...
Wednesday, 03 June 20
MARKET INSIGHT - INTERMODAL
Once again shipping is about to venture into uncharted waters and before the challenges of the past decade are forgotten, shipowners will have to o ...
Tuesday, 02 June 20
KOSPO LOOKING FOR 80000 MT OF 4200 NCV COAL FOR JULY
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 80,000 Metric Tons (MT) 4200 NCV coal for 12 - 21, July ...
Tuesday, 02 June 20
INDONESIAN COAL MINER BUMI RESOURCES Q1 OUTPUT UP 5% - REUTERS
Indonesia’s largest coal miner Bumi Resources posted a 5% increase in first-quarter output at 20.8 million tonnes, the company said in a stat ...
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- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Orica Mining Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- PTC India Limited - India
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- SMC Global Power, Philippines
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- Riau Bara Harum - Indonesia
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Rio Tinto Coal - Australia
- Gujarat Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Therma Luzon, Inc, Philippines
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Planning Commission, India
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Wood Mackenzie - Singapore
- South Luzon Thermal Energy Corporation
- Heidelberg Cement - Germany
- Eastern Coal Council - USA
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- CNBM International Corporation - China
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Aditya Birla Group - India
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Indika Energy - Indonesia
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Madhucon Powers Ltd - India
- OPG Power Generation Pvt Ltd - India
- Sical Logistics Limited - India
- Cigading International Bulk Terminal - Indonesia
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Economic Council, Georgia
- White Energy Company Limited
- Dalmia Cement Bharat India
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
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