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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, 29 January 19
CHINA HAS BEEN THE TOP DRIVER OF GLOBAL GROWTH FOR NEARLY TWO DECADES - ALLIED
China has been the top driver of global growth for nearly two decades now, pushing demand for seaborne trade and being the key influencer for deman ...
Saturday, 26 January 19
SUPRAMAX: NICKEL ORE RUNS SAW A 56K DWT VESSEL, DELIVERY PHILIPPINES, FIXED FOR A TRIP TO CHINA AT $6K - BALTIC BRIEFING
Capesize
A week of dashed hopes for owners as the optimism evident the previous week evaporated. Rates slipped on all routes and underlying thr ...
Thursday, 24 January 19
ANOTHER DISAPPOINTING WEEK FOR PANAMAX OWNERS; MARKET CONTINUES DOWN IN BOTH BASINS - FEARNLEYS
Capesize
The week has been marked by low activity and dropping rates in both basins. As usual, supply additions have increased at the beginning ...
Thursday, 24 January 19
KOREA SOUTHERN POWER INVITED BIDS FOR 960K 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 ...
Tuesday, 22 January 19
9TH GLOBAL MANUFACTURING SUPPLY CHAIN INNOVATION SUMMIT 2019
Rethinking the supply chain in manufacturing is a must at the digital era along with the industry transforming and innovating; new manufacturing is ...
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- Georgia Ports Authority, United States
- Sree Jayajothi Cements Limited - India
- Aditya Birla Group - India
- Sojitz Corporation - Japan
- GAC Shipping (India) Pvt Ltd
- VISA Power Limited - India
- White Energy Company Limited
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- Leighton Contractors Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Simpson Spence & Young - Indonesia
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Business Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- Maharashtra Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- Thai Mozambique Logistica
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- Global Coal Blending Company Limited - Australia
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- Bangladesh Power Developement Board
- Holcim Trading Pte Ltd - Singapore
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- Pendopo Energi Batubara - Indonesia
- Metalloyd Limited - United Kingdom
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Mjunction Services Limited - India
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Attock Cement Pakistan Limited
- Merrill Lynch Commodities Europe
- Planning Commission, India
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Wilmar Investment Holdings
- Deloitte Consulting - India
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Central Electricity Authority - India
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Vijayanagar Sugar Pvt Ltd - India
- Sical Logistics Limited - India
- Toyota Tsusho Corporation, Japan
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- Cement Manufacturers Association - India
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- IEA Clean Coal Centre - UK
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
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