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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, 16 April 20
CHINA'S BENCHMARK POWER COAL PRICE FALLS 5 YUAN PER TONNE - XINHUA
China’s benchmark power coal price fell by 5 yuan (about 70 U.S. cents) per tonne during the past week.
The Bohai-Rim Steam-Co ...
Thursday, 16 April 20
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Monday, 13 April 20
SUPRAMAX: A 56,000DWT SHIP WAS FIXED DELIVERY PARADIP, REDELIVERY CHINA, AT $4,700 - BALTIC BRIEFING
Capesize
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Saturday, 11 April 20
FAQ: COVID-19 AND CLUB COVER - UK P&I
KNOWLEDGE TO ELEVATE
The Coronavirus (COVID-19) pandemic has generated a significant number of enquiries and questions from Members in recent ...
Saturday, 11 April 20
KOEN POWER PLANTS INVITED BIDS FOR 1.5 -1.62 MMT OF STEAM COAL
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- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- Bharathi Cement Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
- Australian Commodity Traders Exchange
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- Central Java Power - Indonesia
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Planning Commission, India
- Marubeni Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- PNOC Exploration Corporation - Philippines
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- Energy Development Corp, Philippines
- White Energy Company Limited
- Petron Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Intertek Mineral Services - Indonesia
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Latin American Coal - Colombia
- Australian Coal Association
- Edison Trading Spa - Italy
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Toyota Tsusho Corporation, Japan
- Sree Jayajothi Cements Limited - India
- Makarim & Taira - Indonesia
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- Timah Investasi Mineral - Indoneisa
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- Deloitte Consulting - India
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Antam Resourcindo - Indonesia
- SMC Global Power, Philippines
- Karbindo Abesyapradhi - Indoneisa
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
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