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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 March 24
INDONESIA APPROVES 922.14 MLN T COAL PRODUCTION QUOTA FOR 2024, ABOVE TARGET - REUTERS
Indonesia has approved coal production quotas totalling 922.14 million metric tons for 2024, Bambang Suswantono, a senior official at the mining mi ...
Friday, 22 March 24
CHINA COAL INDUSTRY GROUP EXPECTS OUTPUT GROWTH TO SLOW IN 2024 - REUTERS
China’s coal output is expected to increase 36 million metric tons, or 0.8%, to about 4.7 billion tonnes in 2024, a Chinese coal industry gro ...
Monday, 18 March 24
THREE KEY TAKEAWAYS FROM OUR EUROPE GAS MARKETS SHORT-TERM OUTLOOK Q1 2024 - WOOD MACKENZIE
European gas prices are currently back to pre-crisis levels, but with a complex series of factors affecting future supply and demand, are they set ...
Wednesday, 06 March 24
INDONESIA AIMS TO FINISH MINING OUTPUT QUOTAS APPROVAL BY END-MARCH, OFFICIAL SAYS - REUTERS
Indonesia’s has approved the mining production quotarequests from more than 120mineral companies and aims to complete the approval process th ...
Monday, 04 March 24
IS YOUR GUARANTEE A GUARANTEE? NOTE TO SHIPOWNERS - GARD
KNOWLEDGE TO ELEVATE
The law of guarantees is not always obvious or easy to understand without proper guidance. This article clarifies the dif ...
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- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Semirara Mining and Power Corporation, Philippines
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Australian Coal Association
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Cement Manufacturers Association - India
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Simpson Spence & Young - Indonesia
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Toyota Tsusho Corporation, Japan
- Borneo Indobara - Indonesia
- The University of Queensland
- CNBM International Corporation - China
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Marubeni Corporation - India
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Price Waterhouse Coopers - Russia
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Ministry of Transport, Egypt
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Krishnapatnam Port Company Ltd. - India
- TeaM Sual Corporation - Philippines
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Deloitte Consulting - India
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- Medco Energi Mining Internasional
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Timah Investasi Mineral - Indoneisa
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- White Energy Company Limited
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- San Jose City I Power Corp, Philippines
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Siam City Cement - Thailand
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- Independent Power Producers Association of India
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Ministry of Mines - Canada
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
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