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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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Friday, 22 October 21
CHINA WANTS TO COOL COAL PRICES. SIMILAR MOVES FOR METALS, CRUDE FAILED - REUTERS
China’s latest attempt to lower runaway commodity prices, this time for thermal coal, is likely to follow a familiar pattern of initial succe ...
Friday, 22 October 21
HARD COAL REMAINS AN IMPORTANT FACTOR FOR SECURITY OF SUPPLY - COAL IMPORTERS ASSOCIATION, GERMANY
- Hard coal remains an important factor for security of supply
- Increase of around 35% in hard-coal-fired power generation in the first three ...
Wednesday, 20 October 21
CHINA'S COAL SHORTAGE TO EASE IN COMING MONTHS, INDUSTRY BODY SAYS - REUTERS
China’s coal shortage will likely ease in coming months, with domestic production and imports already showing signs of picking up, a coal ind ...
Wednesday, 20 October 21
CHINA'S RAW COAL OUTPUT DROPS IN SEPTEMBER - XINHUA
China’s raw coal output dropped 0.9 percent year on year to 330 million tonnes last month, data from the National Bureau of Statistics (NBS) ...
Wednesday, 20 October 21
OVER-RELIANCE ON COAL IN OUR POWER MIX HURTING INDIA - LIVEMINT
In spite of the renewables push, coal still accounts for about 50% of India’s installed power capacity. That means a simultaneous demand and ...
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- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Energy Development Corp, Philippines
- Antam Resourcindo - Indonesia
- Indonesian Coal Mining Association
- Xindia Steels Limited - India
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
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- Price Waterhouse Coopers - Russia
- Africa Commodities Group - South Africa
- Oldendorff Carriers - Singapore
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Coalindo Energy - Indonesia
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Timah Investasi Mineral - Indoneisa
- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- Manunggal Multi Energi - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- Kohat Cement Company Ltd. - Pakistan
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sakthi Sugars Limited - India
- Independent Power Producers Association of India
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
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- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- IEA Clean Coal Centre - UK
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- The University of Queensland
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- Australian Coal Association
- Petron Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- GVK Power & Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- Ambuja Cements Ltd - India
- PTC India Limited - India
- Medco Energi Mining Internasional
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- ASAPP Information Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Jaiprakash Power Ventures ltd
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
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