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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, 02 August 24
COAL MARKET DEVELOPMENTS: FALLING PRICES AMID RECORD-HIGH OUTPUT - WORLD BANK
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- Bhushan Steel Limited - India
- Kohat Cement Company Ltd. - Pakistan
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Georgia Ports Authority, United States
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- South Luzon Thermal Energy Corporation
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- Sical Logistics Limited - India
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Link Ltd, New Zealand
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- Rio Tinto Coal - Australia
- Australian Coal Association
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- White Energy Company Limited
- Wilmar Investment Holdings
- Xindia Steels Limited - India
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Economic Council, Georgia
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Parry Sugars Refinery, India
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Planning Commission, India
- Merrill Lynch Commodities Europe
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Tamil Nadu electricity Board
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Pipit Mutiara Jaya. PT, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Aditya Birla Group - India
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- Bank of Tokyo Mitsubishi UFJ Ltd
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- Indika Energy - Indonesia
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