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