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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, 18 November 22
REALITIES OF LOI LIABILITIES - BALTIC EXCHANGE
KNOWLEDGE TO ELEVATE
The cargo misdelivery claim in Trafigura Maritime Logistics Pte Ltd v. Clearlake Shipping Pte Ltd (Miracle Hope) [2022] E ...
Tuesday, 15 November 22
CHINA SEES RISING COAL STORAGE AMID SUPPLY PUSH - XINHUA
Coal stockpiles at China’s power plants have seen considerable increases, ensuring energy supply for the winter, the country’s energy r ...
Tuesday, 15 November 22
SEABORNE THERMAL COAL PRICES START TO EASE, BUT PROCESS IS UNEVEN - REUTERS
Prices for seaborne thermal coal have started to drop as fears of a winter energy crunch ease, but the rate of decline has varied across the differ ...
Thursday, 10 November 22
INDIA: THERMAL PLANTS HAVE ADEQUATE COAL STOCKS AT 25.6 MILLION TONNES, SAYS GOVT - IANS
The coal stock with domestic dry fuel-based power plants, as on October 31, was 25.6 million tonnes, the government said, adding that the availabil ...
Tuesday, 08 November 22
OUTLOOK ON CHINA’S WEAKENED BASIC MATERIALS SECTOR CLOUDED BY POLICY SWINGS - FITCH RATINGS
Fitch Ratings expects basic materials demand in China to improve qoq in 4Q22, driven by seasonally higher construction activity, solid infrastructu ...
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- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- Holcim Trading Pte Ltd - Singapore
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- Sical Logistics Limited - India
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Romanian Commodities Exchange
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- India Bulls Power Limited - India
- New Zealand Coal & Carbon
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- Vedanta Resources Plc - India
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- The University of Queensland
- Trasteel International SA, Italy
- MS Steel International - UAE
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Minerals Council of Australia
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Karbindo Abesyapradhi - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Petron Corporation, Philippines
- Makarim & Taira - Indonesia
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- Karaikal Port Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- Manunggal Multi Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Independent Power Producers Association of India
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