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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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Thursday, 18 October 18
SUPRAMAX: INDO/WC INDIA SUPRAS ARE FIXING AROUND MID $14000S P/D BASIS SPORE DELIVERY
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SHIPPING MARKET INSIGHT - TIMOS PAPADIMITRIOU
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- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- PNOC Exploration Corporation - Philippines
- Port Waratah Coal Services - Australia
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- Vizag Seaport Private Limited - India
- TeaM Sual Corporation - Philippines
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- Kepco SPC Power Corporation, Philippines
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- Thiess Contractors Indonesia
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- Electricity Generating Authority of Thailand
- Gujarat Sidhee Cement - India
- CIMB Investment Bank - Malaysia
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Gujarat Mineral Development Corp Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Latin American Coal - Colombia
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Orica Mining Services - Indonesia
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Oldendorff Carriers - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- Marubeni Corporation - India
- Sojitz Corporation - Japan
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- Bayan Resources Tbk. - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Vijayanagar Sugar Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- Bhatia International Limited - India
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Makarim & Taira - Indonesia
- Indogreen Group - Indonesia
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- Parry Sugars Refinery, India
- Holcim Trading Pte Ltd - Singapore
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Georgia Ports Authority, United States
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Australian Commodity Traders Exchange
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Deloitte Consulting - India
- Wilmar Investment Holdings
- Vedanta Resources Plc - India
- McConnell Dowell - Australia
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- The University of Queensland
- Attock Cement Pakistan Limited
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