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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, 26 November 18
SUPRAMAX: THE ASIAN MARKET STALLED THIS WEEK WITH A BUILD-UP OF TONNAGE - BALTIC BRIEFING
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Friday, 23 November 18
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Friday, 23 November 18
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Thursday, 22 November 18
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- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Parliament of New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- European Bulk Services B.V. - Netherlands
- Toyota Tsusho Corporation, Japan
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- Interocean Group of Companies - India
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- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- Kobexindo Tractors - Indoneisa
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Oldendorff Carriers - Singapore
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Energy Development Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Bahari Cakrawala Sebuku - Indonesia
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- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
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- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- MS Steel International - UAE
- Indika Energy - Indonesia
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- Planning Commission, India
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Riau Bara Harum - Indonesia
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- Bayan Resources Tbk. - Indonesia
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- Bhushan Steel Limited - India
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Therma Luzon, Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- Ministry of Finance - Indonesia
- Electricity Authority, New Zealand
- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- The State Trading Corporation of India Ltd
- Australian Coal Association
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wilmar Investment Holdings
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
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