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