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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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Thursday, 11 November 21
ASIA COAL POWER PIPELINE TO SHRINK BY TWO THIRDS AFTER CHINA FINANCE CUT - REUTERS
Asia’s pipeline of proposed coal-fired power plants is expected to shrink from 65 gigawatts to 22 gigawatts following China’s pledge to ...
Tuesday, 09 November 21
ASIA-PACIFIC IS HOME TO SOME OF THE WORLD'S LARGEST CARBON-EMITTERS - 2 CHARTS SHOW ITS RELIANCE ON COAL - CNBC
Asia-Pacific is home to some of the world’s largest carbon emitters — and experts say much of global efforts to fight climate change de ...
Tuesday, 09 November 21
CHINA DAILY COAL OUTPUT HITS MULTI-YEAR PEAK, PRICES EXPECTED TO FALL - REUTERS
China’s daily coal output hit 11.93 million tonnes last week, a multi-year high as more capacity returned to operation, the state planner sai ...
Thursday, 04 November 21
CHINA'S COAL MARKET SEES SIGNIFICANT IMPROVEMENTS: NDRC - GLOBAL TIMES
China’s top economic planner has declared initial success in its efforts to ensure coal supply and stabilize prices, saying that daily coal o ...
Thursday, 04 November 21
CHINA THERMAL COAL PRICES RISE AFTER FALLING FOR 10 DAYS - REUTERS
China thermal coal futures rebounded on Wednesday after falling for 10 days on an expected jump in fuel demand to meet heating needs amid forecasts ...
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- Parry Sugars Refinery, India
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- The University of Queensland
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- White Energy Company Limited
- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- IEA Clean Coal Centre - UK
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Ministry of Transport, Egypt
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Videocon Industries ltd - India
- VISA Power Limited - India
- Deloitte Consulting - India
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Leighton Contractors Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Mjunction Services Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Coalindo Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Essar Steel Hazira Ltd - India
- Anglo American - United Kingdom
- Attock Cement Pakistan Limited
- Star Paper Mills Limited - India
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Tata Chemicals Ltd - India
- OPG Power Generation Pvt Ltd - India
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