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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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Wednesday, 19 October 22
WHAT WILL THE GAS MARKET LOOK LIKE IN A NET ZERO WORLD? - WOOD MACKENZIE
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Thursday, 13 October 22
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Thursday, 13 October 22
SPOT COAL BIDDING: CHINESE FIRM WANTS REVISED MECHANISM - BUSINESS RECORDER
Chinese company M/s Huaneng Shandong Ruyi (Pakistan) Energy Limited (HSR) has cautioned National Electric Power Regulatory Authority (Nepra) that i ...
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- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Anglo American - United Kingdom
- CIMB Investment Bank - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- Riau Bara Harum - Indonesia
- Petron Corporation, Philippines
- Aditya Birla Group - India
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- TNB Fuel Sdn Bhd - Malaysia
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- The Treasury - Australian Government
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Chamber of Mines of South Africa
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Bangladesh Power Developement Board
- McConnell Dowell - Australia
- Coal and Oil Company - UAE
- Toyota Tsusho Corporation, Japan
- PetroVietnam Power Coal Import and Supply Company
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Tata Chemicals Ltd - India
- Siam City Cement PLC, Thailand
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Binh Thuan Hamico - Vietnam
- Sical Logistics Limited - India
- Sarangani Energy Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- GVK Power & Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Makarim & Taira - Indonesia
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Global Coal Blending Company Limited - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Commodity Traders Exchange
- Romanian Commodities Exchange
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- Ambuja Cements Ltd - India
- Xindia Steels Limited - India
- Deloitte Consulting - India
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Parry Sugars Refinery, India
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- Coalindo Energy - Indonesia
- Ministry of Mines - Canada
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Interocean Group of Companies - India
- Eastern Coal Council - USA
- Gujarat Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Economic Council, Georgia
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Essar Steel Hazira Ltd - India
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Minerals Council of Australia
- Straits Asia Resources Limited - Singapore
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- CNBM International Corporation - China
- Timah Investasi Mineral - Indoneisa
- Jaiprakash Power Ventures ltd
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- Asmin Koalindo Tuhup - Indonesia
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
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