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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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Sunday, 21 August 22
COAL-RICH POLAND FACES WINTER OF ENERGY DISCONTENT - DW
Poland uses 10 million tons of coal a year to heat households — a whopping 87% of all coal consumed in EU homes in 2019, according to the War ...
Saturday, 20 August 22
KOSPO TO IMPORT 240000 MT OF MIN 4400 KCAL/KG NCV STEAM COAL FOR OCTOBER;LOADING FROM RUSSIAN PORTS NOT ALLOWED
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 240,000 MT of min 4,400kcal/kg to max. 4,999 kcal/kg NC ...
Wednesday, 17 August 22
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Wednesday, 17 August 22
LNG: MAJOR INVESTMENT AND EXPANSION PHASE, DOUBLING OF LIQUEFACTION CAPACITY BY 2028 PROJECTED - CLARKSONS
Clarksons Research have released the latest version of their long standing annual review, LNG Trade & Transport, on to Shipping Intelligence Ne ...
Wednesday, 17 August 22
UNAFFORDABLE LNG PRICES UNDERMINE RAPID DEMAND GROWTH FORECASTS IN KEY ASIAN MARKETS - IEEFA
Sustained high prices may accelerate downward pressures on Asian LNG demand, clouding long-term industry outlooks
The global liquefi ...
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- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Deloitte Consulting - India
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- Indo Tambangraya Megah - Indonesia
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
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- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- London Commodity Brokers - England
- Ministry of Transport, Egypt
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- Bukit Baiduri Energy - Indonesia
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- Energy Link Ltd, New Zealand
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- Global Green Power PLC Corporation, Philippines
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
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- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
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- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Madhucon Powers Ltd - India
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- Anglo American - United Kingdom
- Australian Commodity Traders Exchange
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- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
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- Karaikal Port Pvt Ltd - India
- Cement Manufacturers Association - India
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- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- Coalindo Energy - Indonesia
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Karbindo Abesyapradhi - Indoneisa
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- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
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- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- Standard Chartered Bank - UAE
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- Parry Sugars Refinery, India
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
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- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- The University of Queensland
- Trasteel International SA, Italy
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Ind-Barath Power Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
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- Maheswari Brothers Coal Limited - India
- Ministry of Finance - Indonesia
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Economic Council, Georgia
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- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chamber of Mines of South Africa
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- Baramulti Group, Indonesia
- Parliament of New Zealand
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- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bangladesh Power Developement Board
- Kapuas Tunggal Persada - Indonesia
- Commonwealth Bank - Australia
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