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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, 24 November 21
WHY THIS MINING ANALYST IS UPBEAT ON THE IRON ORE PRICE FORECAST - MOTLEY FOOL
In many ways, 2021 can be called the year of the iron ore price. Much of the talk of the ASX town this year has revolved around this key economic m ...
Wednesday, 24 November 21
PRICE OF CHINA’S COAL FUTURE DROPS BY 60% AS NATIONWIDE DAILY OUTPUT REACHES OVER 12 MILLION TONS: NDRC - GLOBAL TIMES
China’s daily coal output has now stabilized after reaching over 12 million tons and the price of coal futures has declined to 800 yuan ($125 ...
Friday, 19 November 21
CHINA: COAL SUPPLIES TO STABILIZE FOR COMING COLD SEASON
China is capable of ensuring stable coal supplies this winter and next spring with the increase in coal production and the rising stockpiles at pow ...
Wednesday, 17 November 21
MARKET INSIGHT - INTERMODAL
It has been another declining week for the dry bulk market and evidently, we are seeing asset values gradually losing momentum as well. Following a ...
Tuesday, 16 November 21
EARNINGS RECOVERY IN INDONESIAN COAL TO CONTINUE THROUGH 2021, BUT SLOW IN 2022 - FITCH RATINGS
The recovery in the operating and financial performance of Indonesian coal miners and coal contractors is likely to slow in 2022, but coal prices s ...
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- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Globalindo Alam Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- Thai Mozambique Logistica
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Vijayanagar Sugar Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- CNBM International Corporation - China
- Heidelberg Cement - Germany
- Tamil Nadu electricity Board
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- Star Paper Mills Limited - India
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Kumho Petrochemical, South Korea
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- Sical Logistics Limited - India
- Formosa Plastics Group - Taiwan
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Global Coal Blending Company Limited - Australia
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- Australian Coal Association
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- PetroVietnam Power Coal Import and Supply Company
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- Wood Mackenzie - Singapore
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- PNOC Exploration Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- Planning Commission, India
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Directorate Of Revenue Intelligence - India
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- New Zealand Coal & Carbon
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- Semirara Mining Corp, Philippines
- Indian Energy Exchange, India
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- VISA Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- The University of Queensland
- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
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