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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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Friday, 04 February 22
RENEWABLES ON THE RISE, COAL CONTINUOUSLY FALLING - EUROPEAN COMMISSION
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Thursday, 03 February 22
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Wednesday, 02 February 22
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Wednesday, 02 February 22
INDONESIA'S RESTRICTIONS ON COMMODITIES RATTLE MARKETS, MORE MOVES LIKELY - REUTERS
In just the first month of this year, Indonesian policymakers have rattled global markets with restrictions on some of its biggest commodities expo ...
Wednesday, 02 February 22
CHINA'S TOP COAL PRODUCER FORECASTS 28 PCT PROFIT GROWTH IN 2021 - XINHUA
China Shenhua Energy Company Limited, one of the country’s biggest coal producers, said its net profits are expected to jump by 28 percent in ...
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- CNBM International Corporation - China
- Trasteel International SA, Italy
- Eastern Energy - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- GMR Energy Limited - India
- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Toyota Tsusho Corporation, Japan
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Wood Mackenzie - Singapore
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Indika Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Essar Steel Hazira Ltd - India
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- The Treasury - Australian Government
- ASAPP Information Group - India
- Minerals Council of Australia
- VISA Power Limited - India
- Central Java Power - Indonesia
- Medco Energi Mining Internasional
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- New Zealand Coal & Carbon
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Semirara Mining Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- LBH Netherlands Bv - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- White Energy Company Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- Aboitiz Power Corporation - Philippines
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- McConnell Dowell - Australia
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Straits Asia Resources Limited - Singapore
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- IEA Clean Coal Centre - UK
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Bharathi Cement Corporation - India
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- Marubeni Corporation - India
- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Electricity Authority, New Zealand
- The University of Queensland
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