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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, 28 September 21
THE MAIDEN EDITION OF DIVE TECHNOLOGY SUMMIT 2021 CONCLUDES SUCCESSFULLY
Press Release: DIVE TECHNOLOGY SUMMIT 2021, a one-day conference on the recent technological advancements in the Industrial Diving industry conclud ...
Monday, 27 September 21
CHINESE COAL FIRMS MEET TO ADDRESS WINTER SUPPLY CHALLENGES - CNBC
Major Chinese coal producers are trying to resolve supply shortages and curb price rises as the country’s winter consumption peak approaches, ...
Saturday, 25 September 21
HIGH STAKES FOR ASIAN DEVELOPMENT BANK’S AMBITIOUS COAL POWER RETIREMENT PLAN - IEEFA
Implementation challenges could block funding for other equally important high impact clean energy funding strategies
In the lead up ...
Thursday, 23 September 21
LONGER COAL CONTRACTS MAY REIN IN PRICES - ECNS
In China’s coal sector that has been marred recently by price surges, regional authorities and related enterprises should ensure the fuel con ...
Thursday, 23 September 21
BALTIC INDEX HITS 12-YEAR PEAK ON FIRMER VESSELS RATES - REUTERS
The Baltic Exchange’s main dry bulk sea freight index rose for a fourth straight session on Wednesday to a 12-year high, buoyed by higher rat ...
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- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Marubeni Corporation - India
- Economic Council, Georgia
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- Savvy Resources Ltd - HongKong
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- PTC India Limited - India
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- The University of Queensland
- MS Steel International - UAE
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Interocean Group of Companies - India
- Manunggal Multi Energi - Indonesia
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- Aditya Birla Group - India
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Central Java Power - Indonesia
- Romanian Commodities Exchange
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Merrill Lynch Commodities Europe
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- Coastal Gujarat Power Limited - India
- Bangladesh Power Developement Board
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- South Luzon Thermal Energy Corporation
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Binh Thuan Hamico - Vietnam
- Rio Tinto Coal - Australia
- Cement Manufacturers Association - India
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- CNBM International Corporation - China
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Baramulti Group, Indonesia
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Eastern Coal Council - USA
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Goldman Sachs - Singapore
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Georgia Ports Authority, United States
- Meralco Power Generation, Philippines
- Planning Commission, India
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- Power Finance Corporation Ltd., India
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