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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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Friday, 10 April 20
INDIA'S BULKS SUPPLY CHAIN TAKES A HIT DURING LOCKDOWN - WOOD MACKENZIE
India is under a three-week lockdown from 25 March to contain the spread of the coronavirus outbreak. Businesses are shut, and the supply chain is ...
Thursday, 09 April 20
SUSPENSION OF WRONGFUL TRADING IN LIGHT OF COVID 19 - WF&W
KNOWLEDGE TO ELEVATE
DIRECTORS’ PERSONAL LIABILITY FOR WRONGFUL TRADING – RELIEF DURING THE CORONAVIRUS CRISIS
As the UK&rsquo ...
Wednesday, 08 April 20
LESSONS LEARNED FROM SCRUBBER INSTALLATION AND OPERATION - ABS
KNOWLEDGE TO ELEVATE
At the beginning of this year, the IMO’s global sulfur cap on marine fuels entered into force and shipowners who ch ...
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MARKET INSIGHT - INTERMODAL
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Tuesday, 07 April 20
SHIPPING MARKET ANALYSIS - ALLIED
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- Timah Investasi Mineral - Indoneisa
- Port Waratah Coal Services - Australia
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Agrawal Coal Company - India
- Wood Mackenzie - Singapore
- Altura Mining Limited, Indonesia
- Parry Sugars Refinery, India
- Minerals Council of Australia
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Siam City Cement PLC, Thailand
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
- Indonesian Coal Mining Association
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Vijayanagar Sugar Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- Marubeni Corporation - India
- Jaiprakash Power Ventures ltd
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- Mjunction Services Limited - India
- Directorate General of MIneral and Coal - Indonesia
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- LBH Netherlands Bv - Netherlands
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- Parliament of New Zealand
- Ceylon Electricity Board - Sri Lanka
- GVK Power & Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Meralco Power Generation, Philippines
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Australian Coal Association
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- White Energy Company Limited
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
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