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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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Friday, 22 March 24
INDONESIA APPROVES 922.14 MLN T COAL PRODUCTION QUOTA FOR 2024, ABOVE TARGET - REUTERS
Indonesia has approved coal production quotas totalling 922.14 million metric tons for 2024, Bambang Suswantono, a senior official at the mining mi ...
Friday, 22 March 24
CHINA COAL INDUSTRY GROUP EXPECTS OUTPUT GROWTH TO SLOW IN 2024 - REUTERS
China’s coal output is expected to increase 36 million metric tons, or 0.8%, to about 4.7 billion tonnes in 2024, a Chinese coal industry gro ...
Monday, 18 March 24
THREE KEY TAKEAWAYS FROM OUR EUROPE GAS MARKETS SHORT-TERM OUTLOOK Q1 2024 - WOOD MACKENZIE
European gas prices are currently back to pre-crisis levels, but with a complex series of factors affecting future supply and demand, are they set ...
Wednesday, 06 March 24
INDONESIA AIMS TO FINISH MINING OUTPUT QUOTAS APPROVAL BY END-MARCH, OFFICIAL SAYS - REUTERS
Indonesia’s has approved the mining production quotarequests from more than 120mineral companies and aims to complete the approval process th ...
Monday, 04 March 24
IS YOUR GUARANTEE A GUARANTEE? NOTE TO SHIPOWNERS - GARD
KNOWLEDGE TO ELEVATE
The law of guarantees is not always obvious or easy to understand without proper guidance. This article clarifies the dif ...
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- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Attock Cement Pakistan Limited
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Sical Logistics Limited - India
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
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- Orica Australia Pty. Ltd.
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Aditya Birla Group - India
- Maharashtra Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- VISA Power Limited - India
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- London Commodity Brokers - England
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- New Zealand Coal & Carbon
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- White Energy Company Limited
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Pendopo Energi Batubara - Indonesia
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Sindya Power Generating Company Private Ltd
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
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- Petron Corporation, Philippines
- Planning Commission, India
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- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- CNBM International Corporation - China
- Simpson Spence & Young - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Mercator Lines Limited - India
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Riau Bara Harum - Indonesia
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- Malabar Cements Ltd - India
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- Indian Energy Exchange, India
- Goldman Sachs - Singapore
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- Anglo American - United Kingdom
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
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