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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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Tuesday, 11 December 18
PORT OF NEWCASTLE SHIPPED 10.849 MMT OF COAL IN NOVEMBER DOWN 23.44 PERCENT MOM
COALspot.com: The Port of Newcastle, Australia’s major trading port and the world’s largest coal export port has shipped A$ 1,574.8 mil ...
Thursday, 06 December 18
IN THE EAST, BIGGER SUPRA WAS FIXED CA US$ 10K FOR INDO-CHINA COAL ROUND - FEARNLEYS
Capesize
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Thursday, 06 December 18
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DEMAND RISKS WEIGH ON GLOBAL SHIPPING SECTOR OUTLOOK - FITCH RATINGS
The global shipping sector outlook remains negative reflecting the demand-side risks of protectionism and slower economic growth, Fitch Ratings say ...
Thursday, 06 December 18
CHINA REVISES MANAGEMENT RULES ON ESTABLISHMENT OF FULLY FOREIGN-OWNED SHIPPING BUSINESSES - XINHUA
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- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Bulk Trading Sa - Switzerland
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Malabar Cements Ltd - India
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- SMC Global Power, Philippines
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- LBH Netherlands Bv - Netherlands
- Metalloyd Limited - United Kingdom
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- Coal and Oil Company - UAE
- Makarim & Taira - Indonesia
- VISA Power Limited - India
- Thiess Contractors Indonesia
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- PTC India Limited - India
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- Xindia Steels Limited - India
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- Orica Australia Pty. Ltd.
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- Leighton Contractors Pty Ltd - Australia
- Aditya Birla Group - India
- Wood Mackenzie - Singapore
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bahari Cakrawala Sebuku - Indonesia
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Borneo Indobara - Indonesia
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- Australian Coal Association
- GMR Energy Limited - India
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Romanian Commodities Exchange
- Economic Council, Georgia
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
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