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