Sucden Middle East v Yagci Denizcilik ve Ticaret Ltd Sirketi (mv Muammer Yagci)
| Jurisdiction | England & Wales |
| Judge | Knowles J. |
| Judgment Date | 02 November 2018 |
| Neutral Citation | [2018] EWHC 3873 (Comm) |
| Date | 02 November 2018 |
| Court | Queen's Bench Division (Commercial Court) |
[2018] EWHC 3873 (Comm)
Queen's Bench Division (Commercial Court).
Knowles J.
Simon Rainey QC and Andrew Carruth (instructed by Holman Fenwick Willan LLP) for the claimant charterers.
Robert Bright QC and Rani Noakes (instructed by Hill Dickinson LLP) for the defendant owners.
The following case was referred to in the judgment:
ED&F Man Sugar Ltd v Unicargo Transportgesellschaft GmbH (The Ladytramp) [2012] EWHC 2879 (Comm); [2012] 2 Ll Rep 660.
Shipping — Sugar Charter Party — Force majeure — Government interference — Seizure of cargo — Delay — Demurrage — Vessel chartered on Sugar Charter Party 1999 form — Charterparty providing delay to discharge caused by ‘government interferences’ not counting as time on demurrage — Local customs authorities seizing cargo at discharge port after submission of false import documents — Whether charterers liable for demurrage — Whether delay caused by ‘government interferences’ — Whether seizure of cargo amounting to ‘government interferences’ — Arbitration Act 1996, s. 69.
This was an appeal by charterers on a question of law under the Arbitration Act 1996, s. 69, namely whether a seizure of cargo by local customs authorities, which caused a delay to discharge, was time lost due to ‘government interferences’ within the meaning of cl. 28 of the Sugar Charter Party 1999 form.
The owners' vessel, mv MUAMMER YAGCI, had been chartered on the Sugar Charter Party 1999 form to transport a cargo of sugar for discharge in Algeria. Clause 28 of the charterparty was headed ‘Strikes and Force Majeure’ and provided that in the event that discharging the vessel was delayed by ‘government interferences’, time so lost would not count as laytime or time on demurrage.
At the discharge port, the local customs authorities considered that the cargo receivers had submitted false import documents and, with the involvement of higher level government agencies, decided to seize the cargo. A delay of four-and-a-half months in discharging the cargo ensued.
The owners alleged that the charterers were liable for the delay in the form of demurrage and commenced arbitration proceedings. The charterers denied any liability for time lost due to the delay, arguing that the seizure of the cargo by local customs authorities amounted to ‘government interferences’ for the purposes of cl. 28.
The tribunal held that the charterers could not rely on cl. 28 to avoid liability for the delay, because the seizure of the cargo did not amount to ‘government inference’; rather, seizure was an expected or ordinary consequence of presenting false import documentation.
Held, allowing charterers' appeal:
The ordinary meaning of the word ‘interference’ was apt to include an intervention by way of seizure. The action by the local customs authorities to seize the cargo was the action of government through its appropriate arm or agency. Seizure was a significant exercise of executive power, and could not be regarded as routine or ordinary, even if it might expected when false documents were presented. Construing ‘interference’ to include an intervention by way of seizure did not produce an outcome which offended commercial common sense, nor was it a construction that was difficult to apply. The seizure of the cargo by a customs authority that was a state revenue authority acting in a sovereign capacity fell within cl. 28. The result would have been the same even if there had been no involvement by higher level government agencies: parties should not have to investigate how high up the chain of government command the action was authorised.
Knowles J:
1. The question of law on this appeal under section 69 of the Arbitration Act 1996 has been framed in this way:
‘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?’.
2. In giving permission to bring the appeal on this question, Butcher J identified the question of law as one of general public importance relating as it does to a standard form contract in wide commercial usage.
3. Clause 28 of the Sugar Charter Party 1999 form has a side heading: ‘Strikes and Force Majeure’. The clause itself is in these...
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