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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, 17 August 22
CHINA'S COAL-RICH SHANXI MAKES STRIDES IN HIGH-QUALITY DEVELOPMENT - XINHUA
Shanxi, a major coal-producing province in north China, has made continuous advances in high-quality development over the past decade, according to ...
Wednesday, 17 August 22
PAXOCEAN, HONG LAM MARINE AND BUREAU VERITAS SIGN MOU TO DEVELOP AMMONIA BUNKER VESSEL DESIGN - BUREAU VERITAS
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Wednesday, 17 August 22
GOODFUELSS ASIA-PACIFIC BRANCH KICKSTARTS SUSTAINABLE BIOFUEL DELIVERIES WITH NYK AS FIRST CLIENT - GOOD FUELS
GoodFuels, the leading biofuels pioneer for the global transport industry, has today announced that it has successfully supplied sustainable marine ...
Tuesday, 16 August 22
EU BAN ON RUSSIAN COAL IMPORTS COMES INTO FORCE - DEUTSCHE WELLE
The European Union banned Russian coal imports in response to the invasion of Ukraine as part of sanctions in April. Since then, it’s been sc ...
Thursday, 11 August 22
MARKET INSIGHT - INTERMODAL
On July 22nd, Ukraine signed a deal with Russia to release 22mn tons of grain from Ukraine’s 3 major ports (Yuzhny, Chornomorsk, Odesa). Such ...
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- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
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- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Parliament of New Zealand
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- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- New Zealand Coal & Carbon
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- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Thai Mozambique Logistica
- Bhatia International Limited - India
- Eastern Coal Council - USA
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
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- Ambuja Cements Ltd - India
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- Edison Trading Spa - Italy
- Therma Luzon, Inc, Philippines
- The State Trading Corporation of India Ltd
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- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Larsen & Toubro Limited - India
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Mines - Canada
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- Meenaskhi Energy Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- Coalindo Energy - Indonesia
- Economic Council, Georgia
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- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
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- Deloitte Consulting - India
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
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- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Goldman Sachs - Singapore
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- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- Global Coal Blending Company Limited - Australia
- GN Power Mariveles Coal Plant, Philippines
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- The University of Queensland
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Indian Energy Exchange, India
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Central Electricity Authority - India
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Bahari Cakrawala Sebuku - Indonesia
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- GVK Power & Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Sindya Power Generating Company Private Ltd
- SN Aboitiz Power Inc, Philippines
- Aditya Birla Group - India
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Mjunction Services Limited - India
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- Global Green Power PLC Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- Sojitz Corporation - Japan
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- SMC Global Power, Philippines
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Semirara Mining and Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Latin American Coal - Colombia
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
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