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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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Tuesday, 26 February 19
THE RELATIVELY DISAPPOINTING SCENE PORTRAYED IN THE DRY BULK MARKET RIGHT NOW - ALLIED SHIPBROKING
The relatively disappointing scene portrayed in the dry bulk market right now (especially in the Capesize segment) is undoubtedly one of the prevai ...
Friday, 22 February 19
AUSTRALIAN HIGH CV THERMAL COAL PRICES AT 19-MONTH LOW, BUT NOT FOR LONG - WOOD MACKENZIE
The benchmark Newcastle high energy thermal coal price has fallen from US$100/tonne at the turn of the new year to US$88/tonne. Thermal coal has be ...
Wednesday, 20 February 19
EFFECTIVE NOTICES OF ARBITRATION - AVOIDING WASTED COSTS AND A POTENTIALLY TIME-BARRED CLAIM
KNOWLEDGE TO ELEVATE
In a recent case, The Amity [2017], charterers successfully set aside an arbitration award on the basis that ow ...
Wednesday, 20 February 19
SHIPPING MARKET INSIGHT - INERMODAL
Market experts mostly agree that the recent dry bulk market downtrend was caused by seasonal slowdown amid the Chinese New Year celebrations in com ...
Tuesday, 19 February 19
AUSTRALIA'S COAL FUTURE UNDER THREAT AS MORE CHANGES HIT FOSSIL FUELS GLOBALLY - ABC
Two disparate decisions from opposite corners of the world have sounded warnings for the future of Australia’s coal industry.
...
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- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- SMG Consultants - Indonesia
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- VISA Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Coastal Gujarat Power Limited - India
- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- Bayan Resources Tbk. - Indonesia
- Ministry of Finance - Indonesia
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Merrill Lynch Commodities Europe
- Alfred C Toepfer International GmbH - Germany
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Australian Coal Association
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Parliament of New Zealand
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- Semirara Mining Corp, Philippines
- TeaM Sual Corporation - Philippines
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Salva Resources Pvt Ltd - India
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Sical Logistics Limited - India
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- SMC Global Power, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Makarim & Taira - Indonesia
- The University of Queensland
- Mjunction Services Limited - India
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- Samtan Co., Ltd - South Korea
- Australian Commodity Traders Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- Bharathi Cement Corporation - India
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Anglo American - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Siam City Cement - Thailand
- Attock Cement Pakistan Limited
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- GMR Energy Limited - India
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Grasim Industreis Ltd - India
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- Planning Commission, India
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Kohat Cement Company Ltd. - Pakistan
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
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