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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, 01 December 21
SUPPLY OF COAL TO POWER PLANTS IN NOV MORE THAN CONSUMPTION: JOSHI - PTI
The supply of coal to power plants in November is more than the consumption, resulting in rise in stock of dry fuel at power plants, and this trend ...
Wednesday, 01 December 21
MARKET INSIGHT - INTERMODAL
Essentially, anyone involved in the shipping and commodity markets still struggle with commodity supply issues and skyrocketing prices in the conte ...
Tuesday, 30 November 21
CHINA'S TOP ECONOMIC PLANNER SUMMONS COAL PRODUCERS; LONG-TERM PRICING MECHANISM IS ADVISED - GLOBAL TIMES
China’s top economic planner the National Development and Reform Commission (NDRC) said on Monday that they summoned coal producers for a hea ...
Tuesday, 30 November 21
CHINA'S COAL PRICES PLUNGE AFTER GOVT SIGNALS MORE PRICE REGULATION - REUTERS
China’s thermal coal futures dropped 5.6% on Monday after the state economic planner signaled further regulations for prices of the dirty pow ...
Friday, 26 November 21
AS COAL MARKET STABILIZES, CHINA STEPS UP NATURAL GAS SUPPLY TO MEET WINTER DEMAND - GLOBAL TIMES
The daily supply of natural gas in China has exceeded 1 billion cubic meters (bcm) since November began, up 11 percent year-on-year, data from stat ...
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- Mjunction Services Limited - India
- Australian Coal Association
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Bhatia International Limited - India
- White Energy Company Limited
- Independent Power Producers Association of India
- Mintek Dendrill Indonesia
- Attock Cement Pakistan Limited
- Parry Sugars Refinery, India
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- TeaM Sual Corporation - Philippines
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Singapore Mercantile Exchange
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- London Commodity Brokers - England
- Jaiprakash Power Ventures ltd
- Intertek Mineral Services - Indonesia
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- Thiess Contractors Indonesia
- PTC India Limited - India
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- Planning Commission, India
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Indian Oil Corporation Limited
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Petron Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- Sojitz Corporation - Japan
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Siam City Cement PLC, Thailand
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- ASAPP Information Group - India
- ICICI Bank Limited - India
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- SMG Consultants - Indonesia
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Xindia Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- Mercuria Energy - Indonesia
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Interocean Group of Companies - India
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Chamber of Mines of South Africa
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
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