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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, 26 October 21
CHINA'S COAL-RICH SHANXI BEEFS UP COAL PRODUCTION - XINHUA
Major coal producers in north China’s Shanxi Province, a leading coal-producing region of the country, have beefed up production to ensure en ...
Tuesday, 26 October 21
ENERGY CRISIS SHOWS COAL IS AN EXPENSIVE AND UNRELIABLE SOURCE OF ELECTRICITY GENERATION - IEEFA
Any knee-jerk reaction that urges more investment in coal completely misses the point
India is teetering on the brink of joining a growing glo ...
Tuesday, 26 October 21
CHINA TO INVESTIGATE ENERGY INDEX PROVIDERS IN BID TO TAME COAL PRICES - REUTERS
China said on Monday it will investigate energy price index providers as it urged coal industry participants to “strictly” meet contrac ...
Tuesday, 26 October 21
THERE IS PLENTY OF COAL AND GAS IN THE WORLD BUT A VOLATILE MARKET IS NOBODY'S FRIEND - IEEFA
Gas will be winding its way out of the energy system
Gas prices are continuing to surge around the world. The cost of gas is at unpr ...
Tuesday, 26 October 21
AUSTRALIA EXPORTED 51.6 MLN TONNES OF COAL TO INDIA IN FIRST 10 MONTHS, 19% OF ALL AUSTRALIAN COAL EXPORTS; CHINA WAS THE DESTINATION FOR JUST 0.7% - BANCHERO COSTA
2020 proved to be a truly terrible year for global seaborne coal trade. In 2021 things started pretty badly, but we are seeing increasing signs of ...
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- Bhoruka Overseas - Indonesia
- Antam Resourcindo - Indonesia
- Wilmar Investment Holdings
- Parry Sugars Refinery, India
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Dalmia Cement Bharat India
- Toyota Tsusho Corporation, Japan
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Bhushan Steel Limited - India
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Marubeni Corporation - India
- South Luzon Thermal Energy Corporation
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Aditya Birla Group - India
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Vedanta Resources Plc - India
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- MS Steel International - UAE
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- VISA Power Limited - India
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- GMR Energy Limited - India
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- The University of Queensland
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- ASAPP Information Group - India
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- TeaM Sual Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Coal and Oil Company - UAE
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- ICICI Bank Limited - India
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