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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, 30 March 19
KOEN INVITES BIDS FOR 450,000 TONS OF (SUB) BITUMINOUS COAL FOR H1 AND JUNE 2019
South Korea state-owned utility KOREA SOUTH-EAST POWER CO., LTD. (KOEN) issued a tender for total 450,000 MT of min. 4300, 3500 and 5600 NCV ...
Wednesday, 27 March 19
SHIPPING MARKET INSIGHT - INTERMODAL
Contrary to the December 2018 forecasts but in line with the expectations of the dry bulk market, the first quarter of the year closed negatively. ...
Saturday, 23 March 19
IT WAS A POSITIVE WEEK FOR THE HANDY SIZE MARKET - BALTIC BRIEFING
Capesize
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Friday, 22 March 19
CHINA MARKET: COAL OUT IN THE COLD - BUSINESS RECORDER
Though China maintains there is no ban, China-bound Australian coal shipments are looking for a new home. For the past few months, coal cargoes are ...
Thursday, 21 March 19
PRICE PLUNGE AS CHINESE LEAVE THERMAL COAL OUT IN THE COLD - AUSTRALIAN FINANCIAL REVIEW
Thermal coal exporter New Hope Corporation says China’s shipment squeeze on Australia is putting downward pressure on prices in all markets i ...
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- Rio Tinto Coal - Australia
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- Latin American Coal - Colombia
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
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- Agrawal Coal Company - India
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- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Central Electricity Authority - India
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
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- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
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- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
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- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
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- ASAPP Information Group - India
- Electricity Authority, New Zealand
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- Economic Council, Georgia
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- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
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- London Commodity Brokers - England
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- Coalindo Energy - Indonesia
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- Australian Coal Association
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- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- San Jose City I Power Corp, Philippines
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- SN Aboitiz Power Inc, Philippines
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- Attock Cement Pakistan Limited
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
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- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- Heidelberg Cement - Germany
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Orica Australia Pty. Ltd.
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- Independent Power Producers Association of India
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
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- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
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