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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, 18 April 22
DEMAND FOR THERMAL COAL TO RISE DUE TO INCREASE IN ELECTRICITY DEMAND: INDIAN COAL MINISTRY - PTI
Coal block allocatees have a golden opportunity to augment production as the demand for thermal coal will rise due to an increase in electricity de ...
Tuesday, 05 April 22
INDONESIAN COAL PRICE REFERENCE HITS RECORD ABOVE $288
COALspot.com: Indonesian Coal Price Reference for April in a steep climb from March 2022.
As expected, Russia – Ukraine war dr ...
Thursday, 31 March 22
CHINA STATE PLANNER ASKS COAL INDEX PROVIDERS TO RECTIFY IRREGULARITIES - REUTERS
China’s state planner has asked some major coal price index providers to rectify “severe irregularities” it had identified in the ...
Thursday, 31 March 22
IMPORTED COAL PRICES TO JUMP 55% IN APR-JUN, IMPACT INDIAN FIRMS: ICRA - LIVEMINT
Supply disruption owing to the Russia-Ukraine conflict could push the price of imported coal by 45-55% in Q1FY23 compared to the previous quarter, ...
Thursday, 31 March 22
CHINA'S COAL OUTPUT SET FOR MODERATE GROWTH IN 2022 - INDUSTRY BODY - REUTERS
China is expected to see its coal output to grow further in 2022 after hitting a record last year, an industry body forecast on Wednesday, as the c ...
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- Borneo Indobara - Indonesia
- Central Java Power - Indonesia
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- The Treasury - Australian Government
- London Commodity Brokers - England
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- CIMB Investment Bank - Malaysia
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- Siam City Cement PLC, Thailand
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- ICICI Bank Limited - India
- Posco Energy - South Korea
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
- Asmin Koalindo Tuhup - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- Merrill Lynch Commodities Europe
- Rio Tinto Coal - Australia
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- The University of Queensland
- Singapore Mercantile Exchange
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- Kalimantan Lumbung Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mjunction Services Limited - India
- White Energy Company Limited
- Sindya Power Generating Company Private Ltd
- India Bulls Power Limited - India
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Simpson Spence & Young - Indonesia
- Australian Coal Association
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- OPG Power Generation Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
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