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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, 04 October 22
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Tuesday, 27 September 22
14% INCREASE IN EUROPEAN COAL DEMAND TO BE SHORT-TERM TREND - WOOD MACKENZIE
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- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- AsiaOL BioFuels Corp., Philippines
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- ASAPP Information Group - India
- Planning Commission, India
- Ministry of Finance - Indonesia
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- Indo Tambangraya Megah - Indonesia
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Mercator Lines Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Power Finance Corporation Ltd., India
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Iligan Light & Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Attock Cement Pakistan Limited
- European Bulk Services B.V. - Netherlands
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- ICICI Bank Limited - India
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Lanco Infratech Ltd - India
- GMR Energy Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Sakthi Sugars Limited - India
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Mineral Development Corp Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- PTC India Limited - India
- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Economic Council, Georgia
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
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