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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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Monday, 24 December 18
DRY BULK MARKET: CAPESIZE MARKET ON BACKFOOT AS 2018'S END DRAWS NEAR - THE BALTIC BRIEFING
Capesize
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4.2 MILLION DWT OF DRY BULK SHIPS SCRAPPED UNTIL 17 DEC, DOWN 71.6% Y/Y - BIMCO
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Thursday, 20 December 18
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Wednesday, 19 December 18
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Wednesday, 19 December 18
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While global coal demand looks set to rise for the second year in a row in 2018, it is forecast to remain stable over the next five years, as decli ...
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- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Straits Asia Resources Limited - Singapore
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- The University of Queensland
- Coal and Oil Company - UAE
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- ICICI Bank Limited - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Coastal Gujarat Power Limited - India
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- London Commodity Brokers - England
- Intertek Mineral Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- GAC Shipping (India) Pvt Ltd
- LBH Netherlands Bv - Netherlands
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Australian Coal Association
- Planning Commission, India
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kumho Petrochemical, South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- Attock Cement Pakistan Limited
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- Grasim Industreis Ltd - India
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- White Energy Company Limited
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- Sindya Power Generating Company Private Ltd
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Binh Thuan Hamico - Vietnam
- SMG Consultants - Indonesia
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- Jorong Barutama Greston.PT - Indonesia
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