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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, 10 April 19
KOSPO INVITED BIDS FOR 160K MT OF MIN. 3700 NCV COAL FOR JUNE LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 160,000 MT of min. 3,800 Kcal/kg ~max.4,100 ...
Wednesday, 10 April 19
CHINA'S GROWING THERMAL COAL SUPPLY TO PRESSURE EXPORTERS - FITCH RATINGS
Growing Chinese thermal coal supply is likely to lead to further tightening of import controls by the government, putting pressure on seaborne coal ...
Wednesday, 10 April 19
SHIPPING MARKET INSIGHT - INTERMODAL
The tragedy in Brazil’s Vale Brumadinho where a tailings dam collapsed in January ranks among the world’s worst mining disasters. It co ...
Monday, 08 April 19
5TH INDIA NUCLEAR NEW BUILD CONGRESS 2019
5th India Nuclear New Build Congress 2019
The congress in Mumbai aims to bring together representatives from governments, regulators ...
Monday, 08 April 19
THERMAL COAL PRICES FALL, INDIAN POWER PLANTS TO SEE LIMITED GAINS - BUSINESS STANDARD
Thermal coal prices are on a downward spiral globally. Australian coal prices have fallen nearly 20 per cent in the past week, and 40 per cent from ...
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- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Sree Jayajothi Cements Limited - India
- International Coal Ventures Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Ambuja Cements Ltd - India
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- Coastal Gujarat Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Medco Energi Mining Internasional
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- Singapore Mercantile Exchange
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- Alfred C Toepfer International GmbH - Germany
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Petron Corporation, Philippines
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- SMC Global Power, Philippines
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- Chamber of Mines of South Africa
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Indo Tambangraya Megah - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Barasentosa Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- Carbofer General Trading SA - India
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- The Treasury - Australian Government
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Samtan Co., Ltd - South Korea
- Global Coal Blending Company Limited - Australia
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
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