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