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