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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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Thursday, 17 January 19
EIA ESTIMATES THAT U.S. COAL EXPORTS WERE 116 MMST IN 2018, 20% HIGHER THAN THE AMOUNT EXPORTED IN 2017
Coal Supply
EIA estimates that coal production declined by 20 million short tons (MMst) (3%) in 2018, despite a 19 MMst increase in U.S. coal e ...
Thursday, 17 January 19
U.S COAL OUTPUT IS EXPECTED TO FALL BY 3 PER CENT IN 2019 - EIA
EIA forecasts that U.S. coal production will total 729 million short tons (MMst) in 2019, down by 25 MMst (3%) from 2018.
Acco ...
Wednesday, 16 January 19
SHIPPING MARKET INSIGHT - INTERMODAL
As we go through the first days of the year and just a few weeks before the Chinese New Year, the ship repair sector is witnessing a big difference ...
Monday, 14 January 19
KOREA SOUTHERN POWER INVITES BIDS FOR 320,000 MT OF MIN 3,800 NCV COAL
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 3,800 kcal/kg NCV coal for ...
Friday, 11 January 19
SUPRAMAX: THE ASIAN ARENA HAD A MIXED START; LIMITED ACTION IN SOUTHEAST ASIA - THE BALTIC BRIEFING
Capesize
Dashed hopes summed up the first full week of the New Year. A slow start followed by a busy 24 hours of improving rates and a firming ...
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- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- White Energy Company Limited
- Attock Cement Pakistan Limited
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Minerals Council of Australia
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- VISA Power Limited - India
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Indika Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Leighton Contractors Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Commonwealth Bank - Australia
- Australian Coal Association
- Aditya Birla Group - India
- Thai Mozambique Logistica
- The University of Queensland
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jindal Steel & Power Ltd - India
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- Therma Luzon, Inc, Philippines
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- Sindya Power Generating Company Private Ltd
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- London Commodity Brokers - England
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- PTC India Limited - India
- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- Cement Manufacturers Association - India
- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Asmin Koalindo Tuhup - Indonesia
- Planning Commission, India
- Goldman Sachs - Singapore
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Mintek Dendrill Indonesia
- Energy Link Ltd, New Zealand
- Formosa Plastics Group - Taiwan
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
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