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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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Friday, 02 December 22
INDONESIAN COAL PRICE REFERENCE PLUNGE TOWARD US$ 281.48 A TON AS DEMAND DROPS WORLDWIDE
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- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Planning Commission, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Coastal Gujarat Power Limited - India
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- Indian Energy Exchange, India
- Parliament of New Zealand
- Georgia Ports Authority, United States
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Coalindo Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- White Energy Company Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thiess Contractors Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- Kideco Jaya Agung - Indonesia
- Sical Logistics Limited - India
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Larsen & Toubro Limited - India
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- Uttam Galva Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- The Treasury - Australian Government
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- Baramulti Group, Indonesia
- Simpson Spence & Young - Indonesia
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Intertek Mineral Services - Indonesia
- Agrawal Coal Company - India
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- ICICI Bank Limited - India
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Madhucon Powers Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- Directorate Of Revenue Intelligence - India
- International Coal Ventures Pvt Ltd - India
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Indo Tambangraya Megah - Indonesia
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Carbofer General Trading SA - India
- The State Trading Corporation of India Ltd
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Medco Energi Mining Internasional
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- New Zealand Coal & Carbon
- India Bulls Power Limited - India
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
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