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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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Thursday, 02 March 23
DRY BULK MARKET: THE WAY CHINA GOES, SO GOES THE MARKET - BIMCO
We expect demand growth within the 1.5-2.5% range in 2023, driven by China’s economic recovery. Improvements in consumer sentiment should hel ...
Thursday, 02 March 23
INDIA, CHINA DEMAND BOOST LOW-RANK THERMAL COAL PRICES IN ASIA - RUSSELL, REUTERS
Signs of stronger import demand from India have arrested the decline in price of the thermal coal grades most commonly sought by the world’s ...
Thursday, 02 March 23
INDIA CHEERS THE RETURN OF ‘KING COAL’ AS INDUSTRY SEES BUOYANT FUTURE - REUTERS
India’s coal industry celebrated the return of its major conference after a three-year pandemic hiatus by presenting a bullish view of demand ...
Wednesday, 01 March 23
GEO CONNECT ASIA RETURNS IN MARCH TO ACCELERATE THE REGION’S GEOSPATIAL AND LOCATION INTELLIGENCE CAPABILITIES
Press Release: The third edition of GCA will be held in conjunction with Digital Construction Asia and the inaugural Drones Asia – an event d ...
Wednesday, 01 March 23
THE DECLINE IN THE COAL PRICE SINCE THE BEGINNING OF THE YEAR HAS BEEN SIGNIFICANT - INTERMODAL
Last week, the front-month API2 future rose by 3.5%, but since the beginning of the year the future has fallen by 39% to $136.65/t, while the Newca ...
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- Bulk Trading Sa - Switzerland
- Intertek Mineral Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
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- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
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- ICICI Bank Limited - India
- Indian Oil Corporation Limited
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- Alfred C Toepfer International GmbH - Germany
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- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- Krishnapatnam Port Company Ltd. - India
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- Wood Mackenzie - Singapore
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- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
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- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- SMC Global Power, Philippines
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- Medco Energi Mining Internasional
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- Metalloyd Limited - United Kingdom
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- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Romanian Commodities Exchange
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- Makarim & Taira - Indonesia
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- Energy Link Ltd, New Zealand
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- Eastern Energy - Thailand
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- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Goldman Sachs - Singapore
- Ministry of Transport, Egypt
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- GN Power Mariveles Coal Plant, Philippines
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- PNOC Exploration Corporation - Philippines
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- Sinarmas Energy and Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
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- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
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- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
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- Kobexindo Tractors - Indoneisa
- Indonesian Coal Mining Association
- ASAPP Information Group - India
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- Altura Mining Limited, Indonesia
- Coal and Oil Company - UAE
- Electricity Authority, New Zealand
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- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Energy Development Corp, Philippines
- The Treasury - Australian Government
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- India Bulls Power Limited - India
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- Parliament of New Zealand
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
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- New Zealand Coal & Carbon
- Kapuas Tunggal Persada - Indonesia
- European Bulk Services B.V. - Netherlands
- GAC Shipping (India) Pvt Ltd
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- Jaiprakash Power Ventures ltd
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- Meralco Power Generation, Philippines
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- Ministry of Mines - Canada
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- Planning Commission, India
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- Global Green Power PLC Corporation, Philippines
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- Minerals Council of Australia
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- The State Trading Corporation of India Ltd
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- Bhushan Steel Limited - India
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- CNBM International Corporation - China
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Thiess Contractors Indonesia
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- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Economic Council, Georgia
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- Indian Energy Exchange, India
- Australian Coal Association
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- Rio Tinto Coal - Australia
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