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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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Sunday, 26 February 23
MAWANI AND JEDDAH CHAMBER SIGN AN AGREEMENT TO BUILD INTEGRATED LOGISTICS PARK
Press Release: The Saudi Ports Authority (Mawani) and Jeddah Chamber of Commerce and Industry have today inked an agreement to set up an integrated ...
Saturday, 25 February 23
INDONESIA IS STILL BY FAR THE TOP SUPPLIER OF COAL TO CHINA - BANCHERO COSTA
After a slow start in the first quarter, global coal trade has really picked up pace last year, and is now fully back to pre-Covid levels, said ban ...
Wednesday, 22 February 23
MARKET INSIGHT - INTERMODAL
The short-term outlook of the global soybean market is currently pivoted by a combination of weather patterns that are affecting the harvest progre ...
Saturday, 18 February 23
OIL UNLIKELY TO BREAK ABOVE $100/BBL THIS YEAR, J.P.MORGAN SAYS –- REUTERS
Brent oil prices are unlikely to breach the $100 a barrel level this year, barring any significant geopolitical drivers, with OPEC+ potentially add ...
Saturday, 18 February 23
CHINA'S COAL PRICES FALL TO 1 YR-LOW, CLOUDING DEMAND AND IMPORT OUTLOOK - REUTERS
China’s thermal coal prices hit their lowest levels in a year this week on rising inventories as domestic mine production is recovering faste ...
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- Miang Besar Coal Terminal - Indonesia
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- Thai Mozambique Logistica
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- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
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- Petrochimia International Co. Ltd.- Taiwan
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- Globalindo Alam Lestari - Indonesia
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- India Bulls Power Limited - India
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- Energy Link Ltd, New Zealand
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- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- Directorate Of Revenue Intelligence - India
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- Mjunction Services Limited - India
- Ceylon Electricity Board - Sri Lanka
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- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
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- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Agrawal Coal Company - India
- Simpson Spence & Young - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
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- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Economic Council, Georgia
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- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- Bhatia International Limited - India
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- ASAPP Information Group - India
- Heidelberg Cement - Germany
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- The University of Queensland
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- Banpu Public Company Limited - Thailand
- Neyveli Lignite Corporation Ltd, - India
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- Australian Coal Association
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- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- PTC India Limited - India
- Georgia Ports Authority, United States
- Rashtriya Ispat Nigam Limited - India
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- Pendopo Energi Batubara - Indonesia
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- Pipit Mutiara Jaya. PT, Indonesia
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- SMC Global Power, Philippines
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Kobexindo Tractors - Indoneisa
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- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
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- Electricity Authority, New Zealand
- IEA Clean Coal Centre - UK
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- Mercuria Energy - Indonesia
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- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- GVK Power & Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Toyota Tsusho Corporation, Japan
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- Sical Logistics Limited - India
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- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
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- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
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