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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, 13 February 24
WHAT IS THE OUTLOOK FOR THE NATURAL GAS SPOT PRICE IN 2024 AND 2025? EIA
We expect the U.S. benchmark Henry Hub natural gas spot price to average higher in 2024 and 2025 than in 2023, but to remain lower than $3.00 per m ...
Monday, 12 February 24
US THERMAL COAL EXPORTS HIT 5-YEAR HIGHS AND TOP $5 BLN IN 2023 - REUTERS
United States exporters of thermal coal earned more than $5 billion in 2023 as they shipped out more than 32.5 million metric tons of the high-poll ...
Tuesday, 06 February 24
NEW E-FUELS PROJECT TO MAKE INTERNATIONAL SHIPPING CLIMATE-NEUTRAL - RINA
Transport and trade on the ocean blue must be made much greener. This is the goal of the new €17 million European GAMMA project, where compani ...
Tuesday, 06 February 24
INDIA SEES ANNUAL COAL OUTPUT UP 10.9% IN 2024/25 - REUTERS
India expects domestic coal output to increase by 10.9% to 1.13 billion metric tons in the fiscal year ending March 2025, a senior government offic ...
Tuesday, 06 February 24
INDIA'S COAL PRODUCTION INCREASES BY 10.3% TO 99.73 MILLION TONNE IN JANUARY - PTI
The country’s coal output rose 10.3 per cent to 99.73 Million Tonne (MT) in January, over the same month in the previous fiscal.
...
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- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Minerals Council of Australia
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Simpson Spence & Young - Indonesia
- GVK Power & Infra Limited - India
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- Eastern Coal Council - USA
- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- PowerSource Philippines DevCo
- Leighton Contractors Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Rashtriya Ispat Nigam Limited - India
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Coastal Gujarat Power Limited - India
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Mintek Dendrill Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- Thiess Contractors Indonesia
- Singapore Mercantile Exchange
- Parry Sugars Refinery, India
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Planning Commission, India
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- Mercuria Energy - Indonesia
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- Tamil Nadu electricity Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- MS Steel International - UAE
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- Coal and Oil Company - UAE
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- South Luzon Thermal Energy Corporation
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- India Bulls Power Limited - India
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- Uttam Galva Steels Limited - India
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- London Commodity Brokers - England
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- LBH Netherlands Bv - Netherlands
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
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