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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, 27 January 22
2022 - A YEAR OF REBALANCING FOR METALS AND MINING - WOOD MACKENZIE
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Wednesday, 26 January 22
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Wednesday, 26 January 22
INDONESIA'S COAL BAN SENDS PRICES SOARING, OTHER EXPORTERS FAIL TO STEP UP - REUTERS
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- White Energy Company Limited
- Malabar Cements Ltd - India
- Commonwealth Bank - Australia
- Gujarat Sidhee Cement - India
- Edison Trading Spa - Italy
- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Georgia Ports Authority, United States
- Bukit Asam (Persero) Tbk - Indonesia
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Aditya Birla Group - India
- Australian Coal Association
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Jaiprakash Power Ventures ltd
- Oldendorff Carriers - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- London Commodity Brokers - England
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Bhoruka Overseas - Indonesia
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- The University of Queensland
- Indian Oil Corporation Limited
- Star Paper Mills Limited - India
- Kideco Jaya Agung - Indonesia
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Mercator Lines Limited - India
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- Krishnapatnam Port Company Ltd. - India
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- Maheswari Brothers Coal Limited - India
- Bhatia International Limited - India
- Trasteel International SA, Italy
- ICICI Bank Limited - India
- Marubeni Corporation - India
- Siam City Cement - Thailand
- IEA Clean Coal Centre - UK
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Tamil Nadu electricity Board
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- MS Steel International - UAE
- Sical Logistics Limited - India
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- TeaM Sual Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- CNBM International Corporation - China
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- Bukit Makmur.PT - Indonesia
- PowerSource Philippines DevCo
- Planning Commission, India
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- Kepco SPC Power Corporation, Philippines
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
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