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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, 16 November 21
INDONESIA’S 2022 COAL USE FOR POWER GENERATION SET TO RISE 3% - REUTERS
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Tuesday, 16 November 21
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Friday, 12 November 21
INDONESIAN COAL PRICE REFERENCE TOPS $215 A TON; THE HIGHEST COAL PRICE IN HISTORY
COALspot.com: Indonesian Coal Price Reference in a steep climb for most of second half of 2021 as it reached a pinnacle of $215.01 in November 2021 ...
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- Eastern Coal Council - USA
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- Tamil Nadu electricity Board
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Economic Council, Georgia
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Gujarat Sidhee Cement - India
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- CNBM International Corporation - China
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Gujarat Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Grasim Industreis Ltd - India
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Meenaskhi Energy Private Limited - India
- White Energy Company Limited
- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Manunggal Multi Energi - Indonesia
- Minerals Council of Australia
- Indian Energy Exchange, India
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- Bhushan Steel Limited - India
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- The University of Queensland
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Port Waratah Coal Services - Australia
- Rio Tinto Coal - Australia
- Medco Energi Mining Internasional
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Australian Commodity Traders Exchange
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- Tata Chemicals Ltd - India
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Savvy Resources Ltd - HongKong
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- PetroVietnam Power Coal Import and Supply Company
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Australian Coal Association
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- Samtan Co., Ltd - South Korea
- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
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