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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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Sunday, 18 November 18
COAL STOCKS IN A THIRD OF NTPC PLANTS CLOSE TO NIL - FINANCIAL EXPRESS
Coal supply shortage continues to haunt NTPC, the country’s largest power generator, with latest government data showing 31% of the company&r ...
Thursday, 15 November 18
OIL MARKET REPORT: HEEDING THE WARNINGS - IEA
In last month’s Report, we noted that since the middle of the year oil supply had increased sharply, with gains in the Middle East, Russia an ...
Wednesday, 14 November 18
BIMCO ADOPTS 2020 BUNKER CLAUSES
BIMCO has developed two 2020 bunker clauses that deal with general compliance and the transitional period for an early December release.
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Wednesday, 14 November 18
SHIPPING MARKET INSIGHT - KONSTANTINOS KONTOMICHIS
The shipping industry is going through an interesting period across all markets. Since the end of last year, the Dry Baltic Index has been showing ...
Tuesday, 13 November 18
INDIA: POWER DEMAND UP; COAL STOCKS AT MINES AT A 5-YEAR LOW - FINANCIAL EXPRESS
Stocks at Coal India mines plunged to a five-year low of 21 million tonne (mt) in October, as a sudden surge in demand for the fuel from the power ...
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- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Binh Thuan Hamico - Vietnam
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- Posco Energy - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- GMR Energy Limited - India
- Independent Power Producers Association of India
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Oldendorff Carriers - Singapore
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- The Treasury - Australian Government
- Bhatia International Limited - India
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- Port Waratah Coal Services - Australia
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- Orica Mining Services - Indonesia
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- Sree Jayajothi Cements Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- London Commodity Brokers - England
- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- Videocon Industries ltd - India
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- Coalindo Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- Kobexindo Tractors - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- Economic Council, Georgia
- Parliament of New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- Siam City Cement PLC, Thailand
- The State Trading Corporation of India Ltd
- Planning Commission, India
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- Indogreen Group - Indonesia
- Price Waterhouse Coopers - Russia
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Savvy Resources Ltd - HongKong
- Bukit Baiduri Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Bharathi Cement Corporation - India
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- Ministry of Mines - Canada
- Wilmar Investment Holdings
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Central Electricity Authority - India
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Eastern Coal Council - USA
- TNB Fuel Sdn Bhd - Malaysia
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Global Business Power Corporation, Philippines
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
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