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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, 21 January 22
CHINA'S POWER TRADING TARIFFS TO RISE IN 2022 - FITCH RATINGS
Rising trading volume and higher-than-benchmark tariffs in the 2022 bilateral contracts signed between Chinese power generation companies (gencos) ...
Thursday, 20 January 22
CHINESE COAL JUMPS OVER 6% ON PRE-HOLIDAY SUPPLY WORRY - REUTERS
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Thursday, 20 January 22
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MARKET INSIGHT - INTERMODAL
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Sunday, 09 January 22
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Indonesia’s power emergency which has triggered a coal export ban is over but the government will still continue to discuss policies in this ...
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- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Orica Australia Pty. Ltd.
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- GVK Power & Infra Limited - India
- Romanian Commodities Exchange
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- The Treasury - Australian Government
- Sree Jayajothi Cements Limited - India
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- Goldman Sachs - Singapore
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- Aboitiz Power Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- Trasteel International SA, Italy
- PTC India Limited - India
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- Kumho Petrochemical, South Korea
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- McConnell Dowell - Australia
- Bukit Makmur.PT - Indonesia
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- Economic Council, Georgia
- Independent Power Producers Association of India
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- The University of Queensland
- Indogreen Group - Indonesia
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Agrawal Coal Company - India
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- Global Business Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Coastal Gujarat Power Limited - India
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- Meralco Power Generation, Philippines
- Australian Coal Association
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- Bhatia International Limited - India
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- ICICI Bank Limited - India
- New Zealand Coal & Carbon
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Energy Link Ltd, New Zealand
- Larsen & Toubro Limited - India
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
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