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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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Friday, 30 November 18
GOVT MULLS REQUIRING MINERS TO TURN COAL INTO GAS - THE JAKARTA POST
The government is considering requiring all coal miners to turn the raw commodity into dimethylether (DME) as a substitute for liquefied petroleum ...
Friday, 30 November 18
SUPRAMAX: N. CHINA TO INDIA OR SE ASIA SUPRAS ARE GETTING PAID AROUND US$ 6000 - FEARNLEYS
Capesize
Sharp rise in spot activity and income, admittedly from very low levels, for the big ships. West Australia/China and Brazil/Far East b ...
Thursday, 29 November 18
NEW IMSBC CODE REQUIREMENTS AIM TO CONTROL LIQUEFACTION OF COAL CARGOES - GARD
KNOWLEDGE TO ELEVATE
The International Maritime Solid Bulk Cargoes (IMSBC) Code describes coal as a natural, solid, combustible material consi ...
Wednesday, 28 November 18
SHIPPING MARKET INSIGHT - GEORGE LAIOS
Last week I had the privilege to attend the SingularityU Greece Summit, in Athens. It was a privilege because you do not often have the chance to s ...
Tuesday, 27 November 18
PANAMAX AND SUPRAMAX INDICES WITNESSED A DECLINE OF JUST BELOW 14% IN THEIR MEAN ON A MONTH-ON-MONTH COMPARISON - ALLIED SHIPPING
A month of sharp corrections and great asymmetries for the dry bulk sector, with the overall overview of the market shipping rapidly from a state o ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- South Luzon Thermal Energy Corporation
- Sindya Power Generating Company Private Ltd
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Standard Chartered Bank - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- PTC India Limited - India
- IHS Mccloskey Coal Group - USA
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Ceylon Electricity Board - Sri Lanka
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- White Energy Company Limited
- Planning Commission, India
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- ASAPP Information Group - India
- Bharathi Cement Corporation - India
- Aditya Birla Group - India
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- Parliament of New Zealand
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- TeaM Sual Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- The University of Queensland
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- Mercator Lines Limited - India
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Indika Energy - Indonesia
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- Altura Mining Limited, Indonesia
- SMG Consultants - Indonesia
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- Romanian Commodities Exchange
- Billiton Holdings Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Star Paper Mills Limited - India
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Baramulti Group, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
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