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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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Tuesday, 02 October 18
PANAMAX: A FURTHER RISE ACROSS ALL MAIN ROUTES THIS WEEK - ALLIED
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THE PRICE OF OIL CONTINUES ITS CLIMB AMIDST A SERIES OF CONCERNS REGARDING SUPPLY CONSTRAINTS - GEORGE LAZARIDIS
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Tuesday, 02 October 18
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Monday, 01 October 18
SUPRAMAX: A 56,000 DWT FIXED DELIVERY FOR A SURABAYA TRIP WITH REDELIVERY TO WEST COAST INDIA AT $13,500 - THE BALTIC BRIEFING
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Monday, 01 October 18
A NO-DEAL BREXIT WILL UNDOUBTEDLY HAVE CONSEQUENCES FOR IMPORTERS AND EXPORTERS - KATE JONES, THE BALTIC BRIEFING
If you live in the UK, you might be finding it difficult to get away from the Brexit debate. “Hard Brexit”, “soft Brexit”, ...
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- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Oldendorff Carriers - Singapore
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Independent Power Producers Association of India
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Sojitz Corporation - Japan
- Billiton Holdings Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- IEA Clean Coal Centre - UK
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Mjunction Services Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- GMR Energy Limited - India
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- Orica Australia Pty. Ltd.
- Medco Energi Mining Internasional
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Metalloyd Limited - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Bhushan Steel Limited - India
- Carbofer General Trading SA - India
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indonesian Coal Mining Association
- VISA Power Limited - India
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- Binh Thuan Hamico - Vietnam
- Merrill Lynch Commodities Europe
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- Karaikal Port Pvt Ltd - India
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Posco Energy - South Korea
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Savvy Resources Ltd - HongKong
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- PTC India Limited - India
- Malabar Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Iligan Light & Power Inc, Philippines
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