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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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Showing 1026 to 1030 news of total 6871 |
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- Manunggal Multi Energi - Indonesia
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Petron Corporation, Philippines
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Gujarat Sidhee Cement - India
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Madhucon Powers Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Power Finance Corporation Ltd., India
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- Sojitz Corporation - Japan
- Vedanta Resources Plc - India
- Singapore Mercantile Exchange
- Maharashtra Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Directorate General of MIneral and Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- Xindia Steels Limited - India
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Siam City Cement - Thailand
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- Borneo Indobara - Indonesia
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- Minerals Council of Australia
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- London Commodity Brokers - England
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Ind-Barath Power Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- Indian Oil Corporation Limited
- Aditya Birla Group - India
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- Posco Energy - South Korea
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Australian Coal Association
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Star Paper Mills Limited - India
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Planning Commission, India
- Economic Council, Georgia
- Indonesian Coal Mining Association
- PTC India Limited - India
- Tamil Nadu electricity Board
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- SMC Global Power, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
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