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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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Thursday, 07 July 22
COAL INDIA'S PRODUCTION SETS RECORD INCREASE OF 29% YOY AT 36 MT IN Q1FY23 - IIFL SECURITIES
Coal India Limited (CIL) has ended April-June quarter FY’23 capping a historic high of 29% yoy output growth, compared to same quarter FY&rsq ...
Wednesday, 06 July 22
MARKET INSIGHT - INTERMODAL
Following the 3rd Decarbonizing Shipping Forum, held in Hamburg on June 2022, there has been a meaningful resurgence of discussions within the ship ...
Tuesday, 05 July 22
WHY ARE VLSFO PRICES SO HIGH, ESPECIALLY IN SINGAPORE? - STEVE CHRISTY, INTEGR8 FUELS
Tightness in products still trumps talks of recession
Last month we wrote about the fears of recession versus the tightness in product markets ...
Tuesday, 05 July 22
ADANI ENTERPRISES LOWEST BIDDER IN COAL INDIA'S IMPORT TENDER: REPORT - BUSINESS STANDARD
Coal India Ltd floated its first import tender on behalf of power companies, where Adani Enterprises Ltd came out to be the lowest bidder, a report ...
Tuesday, 05 July 22
CHINA POLICY KEY FOR IRON ORE OUTLOOK - ING
China’s covid lockdowns and recessionary risks hit iron ore
Iron ore prices have fallen significantly from their year-to-date high of US$ ...
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- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- GAC Shipping (India) Pvt Ltd
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- Lanco Infratech Ltd - India
- Sojitz Corporation - Japan
- Tamil Nadu electricity Board
- Mintek Dendrill Indonesia
- Bukit Makmur.PT - Indonesia
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Indian Oil Corporation Limited
- Indika Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Standard Chartered Bank - UAE
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Global Green Power PLC Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- White Energy Company Limited
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- Africa Commodities Group - South Africa
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Chamber of Mines of South Africa
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Commonwealth Bank - Australia
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- Mjunction Services Limited - India
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Australian Coal Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- McConnell Dowell - Australia
- Ceylon Electricity Board - Sri Lanka
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- PTC India Limited - India
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Sical Logistics Limited - India
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Economic Council, Georgia
- Therma Luzon, Inc, Philippines
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
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