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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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Saturday, 25 March 23
COAL INDIA HAS STRONG CASE TO INCREASE PRICES, TALKS ON: CMD AGRAWAL - BUSINESS STANDARD
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Saturday, 25 March 23
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Saturday, 25 March 23
GLOBAL LNG-ASIA SPOT PRICES SLIP AS WEAK NORTHERN DEMAND REMAINS - REUTERS
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Wednesday, 22 March 23
OIL PRICE FALL SPECULATIVE, TO HIT $140 BY YEAR-END -ANDURAND: REUTERS
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- Minerals Council of Australia
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- Central Electricity Authority - India
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- PTC India Limited - India
- Kepco SPC Power Corporation, Philippines
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- Posco Energy - South Korea
- Larsen & Toubro Limited - India
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- Baramulti Group, Indonesia
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- Kumho Petrochemical, South Korea
- Toyota Tsusho Corporation, Japan
- Indo Tambangraya Megah - Indonesia
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- Altura Mining Limited, Indonesia
- Essar Steel Hazira Ltd - India
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- Tata Chemicals Ltd - India
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
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- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Uttam Galva Steels Limited - India
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- Meralco Power Generation, Philippines
- Commonwealth Bank - Australia
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Krishnapatnam Port Company Ltd. - India
- Africa Commodities Group - South Africa
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Leighton Contractors Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- Maharashtra Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cement Manufacturers Association - India
- Agrawal Coal Company - India
- Pipit Mutiara Jaya. PT, Indonesia
- Mercator Lines Limited - India
- Aditya Birla Group - India
- CNBM International Corporation - China
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- Ministry of Finance - Indonesia
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Economic Council, Georgia
- Malabar Cements Ltd - India
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Simpson Spence & Young - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Oil Corporation Limited
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- Medco Energi Mining Internasional
- Samtan Co., Ltd - South Korea
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- Energy Link Ltd, New Zealand
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Interocean Group of Companies - India
- Ind-Barath Power Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- Bhushan Steel Limited - India
- Australian Coal Association
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Siam City Cement - Thailand
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- Indika Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Wood Mackenzie - Singapore
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