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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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Monday, 04 July 22
INDONESIAN COAL PRICE REFERENCE SLIGHTLY DOWN IN JULY
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Friday, 01 July 22
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- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Carbofer General Trading SA - India
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- Romanian Commodities Exchange
- Central Electricity Authority - India
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Maharashtra Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
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- Ministry of Finance - Indonesia
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- TeaM Sual Corporation - Philippines
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- Eastern Energy - Thailand
- White Energy Company Limited
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- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Holcim Trading Pte Ltd - Singapore
- Minerals Council of Australia
- Malabar Cements Ltd - India
- Power Finance Corporation Ltd., India
- Leighton Contractors Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- London Commodity Brokers - England
- PowerSource Philippines DevCo
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- The University of Queensland
- The Treasury - Australian Government
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Ind-Barath Power Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- Oldendorff Carriers - Singapore
- Metalloyd Limited - United Kingdom
- Semirara Mining Corp, Philippines
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Kaltim Prima Coal - Indonesia
- Agrawal Coal Company - India
- Toyota Tsusho Corporation, Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- SMC Global Power, Philippines
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Independent Power Producers Association of India
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- San Jose City I Power Corp, Philippines
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Pendopo Energi Batubara - Indonesia
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Chettinad Cement Corporation Ltd - India
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- Edison Trading Spa - Italy
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Energy Development Corp, Philippines
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- International Coal Ventures Pvt Ltd - India
- GVK Power & Infra Limited - India
- Goldman Sachs - Singapore
- Larsen & Toubro Limited - India
- PNOC Exploration Corporation - Philippines
- Posco Energy - South Korea
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- Banpu Public Company Limited - Thailand
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Economic Council, Georgia
- CIMB Investment Bank - Malaysia
- Marubeni Corporation - India
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- Riau Bara Harum - Indonesia
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