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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, 10 January 19
BUNKER DELIVERY NOTE AMENDMENTS ENTER INTO FORCE AS SULPHUR 2020 REQUIREMENT LOOMS - IMO
KNOWLEDGE TO ELEVATE
Amendments to the bunker delivery note relating to the supply of marine fuel oil to ships which have fitted alternative m ...
Thursday, 10 January 19
WORLD TRADE IN THERMAL COAL IS ESTIMATED TO HAVE GROWN BY 1.0 PER CENT IN 2018 - DEPARTMENT OF INDUSTRY, AUSTRALIA
World Trade
World trade in thermal coal is estimated to have grown by 1.0 per cent to 1.1 billion tonnes in 2018 but it is expected to decline ...
Thursday, 10 January 19
PAKISTAN'S COAL IMPORTS TO SURGE TO 30 MILLION TONS PER ANNUM BY 2020 - CEO, PIB
Pakistan’s coal imports are estimated to surge to 30 million tons/annum from existing 20 million tons/annum by the year 2020, given the plann ...
Wednesday, 09 January 19
PANAMAX: THE PACIFIC SAW RELATIVELY GOOD DEMAND PARTICULARLY FROM INDONESIA AND NOPAC - BALTIC BRIEFING
Capesize
It was an active start to the New Year, with trading from West Australia maintaining momentum during the holiday period. Rates for Chi ...
Wednesday, 09 January 19
SHIPPING MARKET INSIGHT - INERMODAL
Paraphrasing the words of a Chief economist in a latest report of the World Bank Group, the current state of the shipping market very much resemble ...
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- Aditya Birla Group - India
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- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
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- Orica Australia Pty. Ltd.
- Sical Logistics Limited - India
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- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
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- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- Australian Coal Association
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- Metalloyd Limited - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
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- Parliament of New Zealand
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- Indogreen Group - Indonesia
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- Rashtriya Ispat Nigam Limited - India
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- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
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- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
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- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
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- Global Coal Blending Company Limited - Australia
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- White Energy Company Limited
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- SN Aboitiz Power Inc, Philippines
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- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
- Wilmar Investment Holdings
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- Marubeni Corporation - India
- Singapore Mercantile Exchange
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
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- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Heidelberg Cement - Germany
- Kartika Selabumi Mining - Indonesia
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- Bhushan Steel Limited - India
- GAC Shipping (India) Pvt Ltd
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- Ministry of Transport, Egypt
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- Mercuria Energy - Indonesia
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- Kohat Cement Company Ltd. - Pakistan
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
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- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- CIMB Investment Bank - Malaysia
- Savvy Resources Ltd - HongKong
- Petrochimia International Co. Ltd.- Taiwan
- Altura Mining Limited, Indonesia
- Xindia Steels Limited - India
- Georgia Ports Authority, United States
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- Global Business Power Corporation, Philippines
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- Kaltim Prima Coal - Indonesia
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- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
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- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
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- The Treasury - Australian Government
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- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- MS Steel International - UAE
- Star Paper Mills Limited - India
- Carbofer General Trading SA - India
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Gujarat Electricity Regulatory Commission - India
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- Indian Oil Corporation Limited
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