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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, 11 April 23
OIL RISES ON CHINA STIMULUS EXPECTATIONS, WEAKER DOLLAR - REUTERS
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Sunday, 09 April 23
CHINA’S BUSINESS INCOME REBOUND POINTS TO IMPROVING ECONOMY: OFFICIAL - XINHUA
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Sunday, 09 April 23
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Thursday, 06 April 23
MARKET INSIGHT - INTERMODAL
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Sunday, 26 March 23
EUROPE’S RUSH TO LNG COULD TURN INTO 'WORLD’S MOST EXPENSIVE AND UNNECESSARY INSURANCE POLICY'- CNBC
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- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
- Bangladesh Power Developement Board
- Commonwealth Bank - Australia
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- MS Steel International - UAE
- Indian Energy Exchange, India
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- Semirara Mining and Power Corporation, Philippines
- Ministry of Transport, Egypt
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- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
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- Global Coal Blending Company Limited - Australia
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- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- Ministry of Finance - Indonesia
- GAC Shipping (India) Pvt Ltd
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- Ministry of Mines - Canada
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- Samtan Co., Ltd - South Korea
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Indonesian Coal Mining Association
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- Mintek Dendrill Indonesia
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- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
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- Chamber of Mines of South Africa
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- Straits Asia Resources Limited - Singapore
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- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
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- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Malabar Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- PetroVietnam Power Coal Import and Supply Company
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Dalmia Cement Bharat India
- Karaikal Port Pvt Ltd - India
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Directorate Of Revenue Intelligence - India
- Wilmar Investment Holdings
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sojitz Corporation - Japan
- Therma Luzon, Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Sakthi Sugars Limited - India
- Bulk Trading Sa - Switzerland
- India Bulls Power Limited - India
- Parliament of New Zealand
- Meralco Power Generation, Philippines
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Timah Investasi Mineral - Indoneisa
- The Treasury - Australian Government
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- Central Java Power - Indonesia
- Aditya Birla Group - India
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
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