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