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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, 13 February 24
WHAT IS THE OUTLOOK FOR THE NATURAL GAS SPOT PRICE IN 2024 AND 2025? EIA
We expect the U.S. benchmark Henry Hub natural gas spot price to average higher in 2024 and 2025 than in 2023, but to remain lower than $3.00 per m ...
Monday, 12 February 24
US THERMAL COAL EXPORTS HIT 5-YEAR HIGHS AND TOP $5 BLN IN 2023 - REUTERS
United States exporters of thermal coal earned more than $5 billion in 2023 as they shipped out more than 32.5 million metric tons of the high-poll ...
Tuesday, 06 February 24
NEW E-FUELS PROJECT TO MAKE INTERNATIONAL SHIPPING CLIMATE-NEUTRAL - RINA
Transport and trade on the ocean blue must be made much greener. This is the goal of the new €17 million European GAMMA project, where compani ...
Tuesday, 06 February 24
INDIA SEES ANNUAL COAL OUTPUT UP 10.9% IN 2024/25 - REUTERS
India expects domestic coal output to increase by 10.9% to 1.13 billion metric tons in the fiscal year ending March 2025, a senior government offic ...
Tuesday, 06 February 24
INDIA'S COAL PRODUCTION INCREASES BY 10.3% TO 99.73 MILLION TONNE IN JANUARY - PTI
The country’s coal output rose 10.3 per cent to 99.73 Million Tonne (MT) in January, over the same month in the previous fiscal.
...
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- Global Business Power Corporation, Philippines
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
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- Asia Pacific Energy Resources Ventures Inc, Philippines
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- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
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- Alfred C Toepfer International GmbH - Germany
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- Power Finance Corporation Ltd., India
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- Eastern Coal Council - USA
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- Deloitte Consulting - India
- Energy Link Ltd, New Zealand
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
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- International Coal Ventures Pvt Ltd - India
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- Savvy Resources Ltd - HongKong
- Cement Manufacturers Association - India
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Interocean Group of Companies - India
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Marubeni Corporation - India
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
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- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- Miang Besar Coal Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- New Zealand Coal & Carbon
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Minerals Council of Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Asmin Koalindo Tuhup - Indonesia
- Wood Mackenzie - Singapore
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- Australian Coal Association
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Ministry of Mines - Canada
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- Parry Sugars Refinery, India
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
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