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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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Wednesday, 05 January 22
CHINA COAL FUTURES SURGE ON SUPPLY WORRIES AMID INDONESIA EXPORT BAN - REUTERS
China’s thermal coal futures surged by as much as 7.8per cent to kick off 2022 on concerns of supply disruptions after Indonesia, its biggest ...
Wednesday, 05 January 22
INDONESIA WARNS COAL SUPPLY CRUNCH NOT OVER AS CHINA PRICES RALLY - REUTERS
Indonesia has warned that its coal supply situation remains critical, ahead of Wednesday’s (Jan 5) review of its export ban, unnerving global ...
Tuesday, 28 December 21
INDIA'S ADANI NEARS FIRST COAL SHIPMENT FROM SHUNNED AUSTRALIAN MINE - REUTERS
India’s Adani Group ADEL.NS is preparing to ship the first coal cargo from Australia’s most controversial mine, after battling a seven- ...
Thursday, 23 December 21
COAL TO STAY AS MAJOR SOURCE OF ENERGY IN FORESEEABLE FUTURE: JOSHI - BUSINESS STANDARD
Coal will stay as a major source of energy in the foreseeable future as it is an affordable source of energy with substantial reserve, Parliament w ...
Thursday, 23 December 21
ANNUAL U.S. COAL-FIRED ELECTRICITY GENERATION WILL INCREASE FOR THE FIRST TIME SINCE 2014 - EIA
From December 20 through December 30, Today in Energy will feature some of our favorite articles from 2021. Today’s article was originally pu ...
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- SMC Global Power, Philippines
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
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- Maharashtra Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
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- Australian Coal Association
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- The State Trading Corporation of India Ltd
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- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- LBH Netherlands Bv - Netherlands
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- Trasteel International SA, Italy
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- Economic Council, Georgia
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- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
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- Metalloyd Limited - United Kingdom
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- Commonwealth Bank - Australia
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- Parliament of New Zealand
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- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Standard Chartered Bank - UAE
- White Energy Company Limited
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- Borneo Indobara - Indonesia
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- GVK Power & Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Mines - Canada
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- CNBM International Corporation - China
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- Wilmar Investment Holdings
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- Electricity Authority, New Zealand
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- SMG Consultants - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
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- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
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- Siam City Cement PLC, Thailand
- Planning Commission, India
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- Merrill Lynch Commodities Europe
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- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- The University of Queensland
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Mercuria Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- CIMB Investment Bank - Malaysia
- Sinarmas Energy and Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- European Bulk Services B.V. - Netherlands
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- PNOC Exploration Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- London Commodity Brokers - England
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- Karaikal Port Pvt Ltd - India
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
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