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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, 22 December 22
RUSSIAN OIL EXPORTS CRATER BY 54% IN THE FIRST FULL WEEK OF THE EU'S EMBARGO AMID A SHORTAGE OF TANKERS WILLING TO CARRY CARGOES - BUSINESS INSIDER
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Thursday, 22 December 22
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Thursday, 22 December 22
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Thursday, 22 December 22
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- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Central Electricity Authority - India
- Toyota Tsusho Corporation, Japan
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- Indian Energy Exchange, India
- Ministry of Transport, Egypt
- Ind-Barath Power Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- Lanco Infratech Ltd - India
- ASAPP Information Group - India
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- Eastern Energy - Thailand
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- Maharashtra Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Karaikal Port Pvt Ltd - India
- GVK Power & Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Tata Chemicals Ltd - India
- Aboitiz Power Corporation - Philippines
- Parliament of New Zealand
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- MS Steel International - UAE
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- The University of Queensland
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Wilmar Investment Holdings
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- ICICI Bank Limited - India
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- Cement Manufacturers Association - India
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- McConnell Dowell - Australia
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- Electricity Authority, New Zealand
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Larsen & Toubro Limited - India
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Siam City Cement - Thailand
- Barasentosa Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
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