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