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