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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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Wednesday, 19 December 18
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Tuesday, 18 December 18
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Tuesday, 18 December 18
DRY BULK: IN ABSOLUTE TERMS, ALL MAIN SIZE SEGMENTS SAW THEIR ACTUAL VOLATILITY FIGURES DECREASE - ALLIED
Since the beginning of 2016, when the dry bulk market reached its absolute bottom, freight rates have been ever since on an upward trajectory. Taki ...
Tuesday, 18 December 18
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- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- PTC India Limited - India
- Commonwealth Bank - Australia
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Bharathi Cement Corporation - India
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- International Coal Ventures Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- Agrawal Coal Company - India
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Georgia Ports Authority, United States
- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- White Energy Company Limited
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- GVK Power & Infra Limited - India
- Deloitte Consulting - India
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Indian Oil Corporation Limited
- Petron Corporation, Philippines
- Minerals Council of Australia
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- Carbofer General Trading SA - India
- The University of Queensland
- Sree Jayajothi Cements Limited - India
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Mercator Lines Limited - India
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Sarangani Energy Corporation, Philippines
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Ceylon Electricity Board - Sri Lanka
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Electricity Authority - India
- Eastern Coal Council - USA
- VISA Power Limited - India
- Central Java Power - Indonesia
- Price Waterhouse Coopers - Russia
- Altura Mining Limited, Indonesia
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- European Bulk Services B.V. - Netherlands
- Semirara Mining Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Romanian Commodities Exchange
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Parliament of New Zealand
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- TeaM Sual Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- Kepco SPC Power Corporation, Philippines
- India Bulls Power Limited - India
- Economic Council, Georgia
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Thiess Contractors Indonesia
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Medco Energi Mining Internasional
- Savvy Resources Ltd - HongKong
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- Kumho Petrochemical, South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
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