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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, 04 November 21
FASTER DECARBONISATION: BACK TO BASICS FOR THE MINING INDUSTRY? - WOOD MACKENZIE
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Wednesday, 03 November 21
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MARKET INSIGHT - INTERMODAL
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- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Directorate Of Revenue Intelligence - India
- PNOC Exploration Corporation - Philippines
- Larsen & Toubro Limited - India
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Standard Chartered Bank - UAE
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- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Jaiprakash Power Ventures ltd
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Interocean Group of Companies - India
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
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- Coalindo Energy - Indonesia
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- Videocon Industries ltd - India
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
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- Marubeni Corporation - India
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
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- Cement Manufacturers Association - India
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Carbofer General Trading SA - India
- Deloitte Consulting - India
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- The University of Queensland
- Kumho Petrochemical, South Korea
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- Planning Commission, India
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
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- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
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- South Luzon Thermal Energy Corporation
- Thai Mozambique Logistica
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- Siam City Cement PLC, Thailand
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- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Samtan Co., Ltd - South Korea
- Madhucon Powers Ltd - India
- Bangladesh Power Developement Board
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
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- TeaM Sual Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement - Thailand
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- Simpson Spence & Young - Indonesia
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Global Coal Blending Company Limited - Australia
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Leighton Contractors Pty Ltd - Australia
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Parliament of New Zealand
- Central Java Power - Indonesia
- ASAPP Information Group - India
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Goldman Sachs - Singapore
- Dalmia Cement Bharat India
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
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- Pendopo Energi Batubara - Indonesia
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- The Treasury - Australian Government
- Malabar Cements Ltd - India
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