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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, 03 April 20
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Tuesday, 31 March 20
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Capesize
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- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- Interocean Group of Companies - India
- Electricity Authority, New Zealand
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Jindal Steel & Power Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Standard Chartered Bank - UAE
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Therma Luzon, Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- TeaM Sual Corporation - Philippines
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- Central Electricity Authority - India
- Iligan Light & Power Inc, Philippines
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- White Energy Company Limited
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Meralco Power Generation, Philippines
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- IHS Mccloskey Coal Group - USA
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- Romanian Commodities Exchange
- Anglo American - United Kingdom
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bhatia International Limited - India
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Altura Mining Limited, Indonesia
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- Planning Commission, India
- Carbofer General Trading SA - India
- Coalindo Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- Economic Council, Georgia
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- Leighton Contractors Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
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