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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, 27 May 20
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Saturday, 23 May 20
EWP INVITES BIDS FOR 840,000 METRIC TONS OF MIN 5700 NAR COAL
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- Interocean Group of Companies - India
- Kapuas Tunggal Persada - Indonesia
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- India Bulls Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- White Energy Company Limited
- Planning Commission, India
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Standard Chartered Bank - UAE
- South Luzon Thermal Energy Corporation
- Independent Power Producers Association of India
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- International Coal Ventures Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Chamber of Mines of South Africa
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indonesian Coal Mining Association
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- Ind-Barath Power Infra Limited - India
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- The University of Queensland
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- Australian Coal Association
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indika Energy - Indonesia
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Renaissance Capital - South Africa
- SMG Consultants - Indonesia
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Orica Australia Pty. Ltd.
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Maheswari Brothers Coal Limited - India
- Leighton Contractors Pty Ltd - Australia
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhatia International Limited - India
- AsiaOL BioFuels Corp., Philippines
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Xindia Steels Limited - India
- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- Makarim & Taira - Indonesia
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Jaiprakash Power Ventures ltd
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Sarangani Energy Corporation, Philippines
- Wood Mackenzie - Singapore
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Chettinad Cement Corporation Ltd - India
- Indian Energy Exchange, India
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Formosa Plastics Group - Taiwan
- Electricity Authority, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
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