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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, 15 October 21
GLOBAL STEEL DEMAND GROWTH DOWNGRADED FOR 2021 DUE TO CHINA - WORLD STEEL ASSOCIATION
The World Steel Association (worldsteel) today released an update of its Short Range Outlook (SRO) for 2021 and 2022. worldsteel forecasts that ste ...
Thursday, 14 October 21
SPIKING COAL PRICES: DON’T BLAME THE ENERGY TRANSITION - IEEFA
Volatility highlights urgency for renewables-based energy solutions
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Thursday, 14 October 21
EIA FORECASTS U.S. COAL PRODUCTION TOTALS 588 MMST IN 2021, UP 53 MMST YOY
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Wednesday, 13 October 21
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Wednesday, 13 October 21
CHINA ISN'T THE ONLY HUGE ASIAN ECONOMY WITH A COAL SHORTAGE NOW - CNBC
China is not the only Asian giant grappling with an energy crunch — India is also teetering on the edge of a power crisis.
Mos ...
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- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- CNBM International Corporation - China
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- New Zealand Coal & Carbon
- Posco Energy - South Korea
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- Sakthi Sugars Limited - India
- White Energy Company Limited
- Cement Manufacturers Association - India
- Interocean Group of Companies - India
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The University of Queensland
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Edison Trading Spa - Italy
- Singapore Mercantile Exchange
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- Jaiprakash Power Ventures ltd
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indonesian Coal Mining Association
- Power Finance Corporation Ltd., India
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- Mercator Lines Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- South Luzon Thermal Energy Corporation
- TeaM Sual Corporation - Philippines
- PowerSource Philippines DevCo
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Parliament of New Zealand
- Gujarat Sidhee Cement - India
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- Minerals Council of Australia
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- Samtan Co., Ltd - South Korea
- Maheswari Brothers Coal Limited - India
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- Sindya Power Generating Company Private Ltd
- SMC Global Power, Philippines
- VISA Power Limited - India
- MS Steel International - UAE
- Goldman Sachs - Singapore
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Bayan Resources Tbk. - Indonesia
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
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