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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, 13 December 22
AUSTRALIA TO CAP PRICES OF COAL, GAS TO DRIVE DOWN ENERGY BILLS - REUTERS
Australia will cap coal and gas prices for a year in a bid to shave utility bills for households and businesses hit by soaring costs because of the ...
Tuesday, 13 December 22
YANCOAL AUSTRALIA TO PREPAY $459 MLN DEBT AS RECORD COAL PRICES BOOST CASHFLOWS - REUTERS
Coal miner Yancoal Australia Ltd. said on Friday it intended to prepay $459 million of its debt on or around Dec. 16, as elevated coal prices were ...
Tuesday, 13 December 22
WHY COAL LEADS THE RISE IN COMMODITIES THIS YEAR - MARKETWATCH
This year marked a resurgence for coal, often known — and loathed — by environmentalists as the dirtiest energy source, with prices mor ...
Thursday, 08 December 22
BIMCO TO REVISE WAR RISK CLAUSES
Work to revise the BIMCO War Cancellation Clause 2004, the BIMCO War Risks Clause for Time Chartering 2013 (CONWARTIME 2013) and the BIMCO War Risk ...
Thursday, 08 December 22
COAL ROYALTY PAYMENTS BOOST AUSTRALIAN STATE'S BUDGET FORECAST - REUTERS
Australia’s Queensland state on Wednesday forecast a record surplus for the current financial year, largely driven by higher royalty payments ...
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- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- Ambuja Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Gujarat Sidhee Cement - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Energy Link Ltd, New Zealand
- Xindia Steels Limited - India
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- Kideco Jaya Agung - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Kobexindo Tractors - Indoneisa
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- Global Business Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- The University of Queensland
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- Global Green Power PLC Corporation, Philippines
- Indonesian Coal Mining Association
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- PTC India Limited - India
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Formosa Plastics Group - Taiwan
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Australian Coal Association
- Ministry of Transport, Egypt
- Indian Oil Corporation Limited
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- Metalloyd Limited - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
- PNOC Exploration Corporation - Philippines
- GMR Energy Limited - India
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Vedanta Resources Plc - India
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- Globalindo Alam Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- Deloitte Consulting - India
- Agrawal Coal Company - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- Posco Energy - South Korea
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
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