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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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Friday, 08 March 19
KOMIPO INVITES BIDS FOR 2.6 MILLION TONS OF AUSTRALIAN 5700 NAR COAL FOR FIVE YEARS
South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 520,000 MT of min. 5700 NAR coal of Australian origin to be burnt ...
Friday, 08 March 19
CHINA'S COAL DEMAND FORECAST TO DROP SLOWLY - YONHAP
China’s coal demand is expected to fall at a snail’s pace over the next 20 years due to the country’s preference for the cheap fo ...
Thursday, 07 March 19
INDONESIAN COAL PRICE REFERENCE PLUNGE TO LOWEST IN SEVEN MONTHS
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 06 March 19
KOSPO INVITES BIDS FOR 80,000 MT OF 3800 NCV COAL FOR 21 - 30 MARCH, 2019 LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 80,000 MT of min 3,800 kcal/kg NCV low calor ...
Wednesday, 06 March 19
KOREA SOUTHERN POWER CO INVITES BIDS FOR 980,000 MT OF 4600 NCV COAL FOR THREE YEARS
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 4,600 kcal/kg NCV low calo ...
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- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Iligan Light & Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Borneo Indobara - Indonesia
- Electricity Generating Authority of Thailand
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Petron Corporation, Philippines
- Economic Council, Georgia
- Malabar Cements Ltd - India
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Timah Investasi Mineral - Indoneisa
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Directorate Of Revenue Intelligence - India
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Aboitiz Power Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- GMR Energy Limited - India
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Makarim & Taira - Indonesia
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Agrawal Coal Company - India
- Minerals Council of Australia
- Xindia Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Dalmia Cement Bharat India
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Kobexindo Tractors - Indoneisa
- The University of Queensland
- Savvy Resources Ltd - HongKong
- Indogreen Group - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Sical Logistics Limited - India
- Wood Mackenzie - Singapore
- Jaiprakash Power Ventures ltd
- Altura Mining Limited, Indonesia
- Maheswari Brothers Coal Limited - India
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Neyveli Lignite Corporation Ltd, - India
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- ASAPP Information Group - India
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Vedanta Resources Plc - India
- PTC India Limited - India
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
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