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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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Wednesday, 17 April 19
ONCE AGAIN WE FACED WITH THE SITUATION OF THE DRY BALTIC INDEX BEING BELOW 1,000 POINTS - INTERMODAL
Once again we are faced with the situation of the Dry Baltic Index being below 1,000 points. In a market where the feeling of insecurity is almost ...
Wednesday, 17 April 19
LNG WESTERN AFRICA CONFERENCE 2019
The only LNG Focus Platform to Accelerate Investment and Cooperation in Western African Countries
LNG Western Africa Conference 2019 ...
Saturday, 13 April 19
IMO 2020 - DON'T SCRUB IT! - IVAR MYKLEBUST
KNOWLEDGE TO ELEVATE
Höegh Autoliners stands firm on its decision not to implement scrubbers but comply with the IMO 2020 regulations by ...
Saturday, 13 April 19
CAPESIZE: WEST AUSTRALIA TO CHINA IRON ORE CARGOES LIFTING FROM $4.60 PMT TO ABOVE $5.00 - BALTIC BRIEFING
Capesize
The market saw a steep ascent from the depths of last week. The Baltic Capesize Index (BCI) 5TC opened on Monday at $5,099, although b ...
Friday, 12 April 19
OIL MARKET REPORT: MIXED SIGNALS - IEA
The huge increase in oil production we saw in 2H18 has reversed following the implementation of the new Vienna Agreement and the increasing effecti ...
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- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Intertek Mineral Services - Indonesia
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Larsen & Toubro Limited - India
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- San Jose City I Power Corp, Philippines
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- London Commodity Brokers - England
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Oldendorff Carriers - Singapore
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Grasim Industreis Ltd - India
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Orica Mining Services - Indonesia
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- White Energy Company Limited
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Electricity Authority, New Zealand
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- The Treasury - Australian Government
- The University of Queensland
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- MS Steel International - UAE
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Medco Energi Mining Internasional
- Orica Australia Pty. Ltd.
- Indogreen Group - Indonesia
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- Latin American Coal - Colombia
- Manunggal Multi Energi - Indonesia
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Cement Manufacturers Association - India
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
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