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