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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, 08 March 22
RUSSIA-UKRAINE CONFLICT ADDS IMPETUS TO ASIA'S ENERGY TRANSITION - IEEFA
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Tuesday, 22 February 22
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China’s coal output returned to more than 12 million tonnes per day as of Feb. 20, the country’s state planner said on Monday, a level ...
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- Thai Mozambique Logistica
- Leighton Contractors Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- SMC Global Power, Philippines
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- Orica Mining Services - Indonesia
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Malabar Cements Ltd - India
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- Africa Commodities Group - South Africa
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- ICICI Bank Limited - India
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The University of Queensland
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- VISA Power Limited - India
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bulk Trading Sa - Switzerland
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- Straits Asia Resources Limited - Singapore
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Kumho Petrochemical, South Korea
- Toyota Tsusho Corporation, Japan
- Indian Oil Corporation Limited
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- Planning Commission, India
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- Global Coal Blending Company Limited - Australia
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- Maheswari Brothers Coal Limited - India
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- Heidelberg Cement - Germany
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- Electricity Authority, New Zealand
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Latin American Coal - Colombia
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
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