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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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Wednesday, 22 August 18
KOMIPO INVITES BIDS FOR 480K TONS OF BITUMINOUS COAL FOR BORYEONG POWER PLANT & SHIN BORYEONG POWER PLANTS
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Wednesday, 22 August 18
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Capesize
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Friday, 17 August 18
DO ARBITRATION AGREEMENTS IN BILLS OF LADING BIND THEIR HOLDERS? - WFW
KNOWLEDGE TO ELEVATE
Bills of lading are a crucial part of the security package traditionally sought by trade finance providers.
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Friday, 17 August 18
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According to the IEA’s Energy Access Outlook 2017 report, nearly all of those who gained access to electricity worldwide in the last 16 years ...
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- Binh Thuan Hamico - Vietnam
- Jindal Steel & Power Ltd - India
- Grasim Industreis Ltd - India
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- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
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- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
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- Ambuja Cements Ltd - India
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- Goldman Sachs - Singapore
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- Commonwealth Bank - Australia
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- Pipit Mutiara Jaya. PT, Indonesia
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- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
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- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
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- Economic Council, Georgia
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- Sindya Power Generating Company Private Ltd
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- Ministry of Finance - Indonesia
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- Straits Asia Resources Limited - Singapore
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- Kepco SPC Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- McConnell Dowell - Australia
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Posco Energy - South Korea
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Anglo American - United Kingdom
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- Indogreen Group - Indonesia
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Salva Resources Pvt Ltd - India
- The University of Queensland
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- Australian Coal Association
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- The Treasury - Australian Government
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- San Jose City I Power Corp, Philippines
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- Eastern Energy - Thailand
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- Miang Besar Coal Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
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- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
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- Interocean Group of Companies - India
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- Bulk Trading Sa - Switzerland
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- Banpu Public Company Limited - Thailand
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
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- SN Aboitiz Power Inc, Philippines
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- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- Planning Commission, India
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Coalindo Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- VISA Power Limited - India
- PowerSource Philippines DevCo
- Standard Chartered Bank - UAE
- Petrochimia International Co. Ltd.- Taiwan
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- White Energy Company Limited
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- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- CIMB Investment Bank - Malaysia
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Bharathi Cement Corporation - India
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