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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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Friday, 28 June 24
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- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Therma Luzon, Inc, Philippines
- MS Steel International - UAE
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Carbofer General Trading SA - India
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- Globalindo Alam Lestari - Indonesia
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Planning Commission, India
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Rashtriya Ispat Nigam Limited - India
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Parliament of New Zealand
- Marubeni Corporation - India
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- PTC India Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Economic Council, Georgia
- Australian Coal Association
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Metalloyd Limited - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- Kaltim Prima Coal - Indonesia
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- The University of Queensland
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- Mercator Lines Limited - India
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Deloitte Consulting - India
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coalindo Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- The Treasury - Australian Government
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