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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, 19 July 22
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Tuesday, 19 July 22
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Tuesday, 19 July 22
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China’s daily coal output in June rose 6.6 per cent from a month earlier as miners cranked up output ahead of peak summer temperatures, when ...
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- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Anglo American - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Parry Sugars Refinery, India
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- The University of Queensland
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- Dalmia Cement Bharat India
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Star Paper Mills Limited - India
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Sojitz Corporation - Japan
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Electricity Authority - India
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- Australian Coal Association
- Makarim & Taira - Indonesia
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Planning Commission, India
- GMR Energy Limited - India
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Energy Link Ltd, New Zealand
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- Bayan Resources Tbk. - Indonesia
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- Semirara Mining Corp, Philippines
- GVK Power & Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- Indian Oil Corporation Limited
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- Sarangani Energy Corporation, Philippines
- Wood Mackenzie - Singapore
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Singapore Mercantile Exchange
- PetroVietnam Power Coal Import and Supply Company
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
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