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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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Saturday, 06 April 19
AUSTRALIA COAL POSTS BIGGEST WEEKLY DROP IN A DECADE AMID WEAK DEMAND - REUTERS
Australian thermal coal prices this week registered their biggest weekly fall since the financial market turmoil of a decade ago as demand plunged ...
Saturday, 06 April 19
SUPRAMAX: IT WAS A POOR WEEK OVERALL FOR THE BALTIC SUPRAMAX INDEX, WHICH LOST GROUND - BALTIC BRIEFING
Capesize
The Capesize market over the past week looked to have found a floor on Tuesday with the BCI 5TC at $3460 before firming into the rest ...
Thursday, 04 April 19
OVERSUPPLY STILL MAJOR CHALLENGE WARNS ICS
Speaking in Istanbul, Simon Bennett, Deputy Secretary General of the International Chamber of Shipping (ICS) warned that avoiding overcapacity and ...
Thursday, 04 April 19
GLENCORE, TOHOKU ELECTRIC SET COAL CONTRACT PRICE AT $94.75/T - SOURCE, REUTERS REPORTED
Global miner Glencore and Japan’s Tohoku Electric Power agreed on a price of $94.75 per tonne for supplies of thermal coal from Australia for ...
Monday, 01 April 19
AUSTRALIAN COAL AT RISK FROM CHINA MOVE, WARNS GOVERNMENT REPORT - SYDNEY MORNING HERALD
A new government report warns China’s restrictions on coal imports is the number one risk for Australian coal this year and could lead to a s ...
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- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Energy - Thailand
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- Krishnapatnam Port Company Ltd. - India
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- The University of Queensland
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- Tamil Nadu electricity Board
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Australian Coal Association
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Agrawal Coal Company - India
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Siam City Cement - Thailand
- Attock Cement Pakistan Limited
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
- Indika Energy - Indonesia
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Indo Tambangraya Megah - Indonesia
- Carbofer General Trading SA - India
- Sinarmas Energy and Mining - Indonesia
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Deloitte Consulting - India
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- Singapore Mercantile Exchange
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- PowerSource Philippines DevCo
- Bangladesh Power Developement Board
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Goldman Sachs - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
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