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