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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, 05 December 18
WORLD COAL PRICES FALL, WITH INDONESIA BENCHMARK FOR DECEMBER, ENDING AT LOWEST SINCE JUNE 2018
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Wednesday, 05 December 18
SHIPPING MARKET INSIGHT - GIANNIS ANDRITSOPOULOS
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Monday, 03 December 18
SUPRAMAX: FIXED DELIVERY KALIMANTAN TO WEST COAST INDIA, AT $11000 - THE BALTIC BRIEFING
Capesize
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Sunday, 02 December 18
TRADE WAR LEADING TO HEADWINDS FOR THE FRAGILE DRY BULK RECOVERY - PETER SAND, BIMCO
The first twelve weeks of the 2018/19 marketing year, which started on 1 September 2018, have painted a dire picture for US soya bean exports which ...
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- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- The University of Queensland
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Posco Energy - South Korea
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Australian Coal Association
- Independent Power Producers Association of India
- Sindya Power Generating Company Private Ltd
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMC Global Power, Philippines
- Semirara Mining and Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Standard Chartered Bank - UAE
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Marubeni Corporation - India
- OPG Power Generation Pvt Ltd - India
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- Interocean Group of Companies - India
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- South Luzon Thermal Energy Corporation
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- White Energy Company Limited
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Intertek Mineral Services - Indonesia
- GVK Power & Infra Limited - India
- PowerSource Philippines DevCo
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Siam City Cement PLC, Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- Economic Council, Georgia
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vizag Seaport Private Limited - India
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- Wilmar Investment Holdings
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Semirara Mining Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Edison Trading Spa - Italy
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Gujarat Sidhee Cement - India
- Siam City Cement - Thailand
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
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