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