Sucden Middle-East v Yagci Denizcilik Ve Ticaret Ltd Sirketi Re: The MV Muammer Yagci

Under a contractual exception for government interferences, the seizure of cargo by a State customs authority acting in a sovereign capacity can interrupt laytime or demurrage. The relevant question is whether the governmental act constitutes an interference, not whether it was predictable or resulted from the ordinary application of pre-existing legislation. A seizure is not a routine discharge activity merely because it was an expected consequence of false documents. A marginal heading referring to force majeure cannot impose additional requirements where the clause itself contains a mixed list of events. The scope of the conclusion remains fact-specific and does not determine every circumstance falling within or outside the clause.

Charterers appealed under section 69 of the Arbitration Act 1996 against a partial final award concerning the meaning of clause 28 of the Sugar Charter Party 1999 form. The clause excluded from laytime, demurrage and detention time lost through specified events, including government interferences.

False import documents led Algerian customs authorities to seize sugar cargo at the discharge port. Discharge was delayed for approximately four and a half months. The arbitrators concluded that the seizure did not constitute government interference. The appeal concerned whether seizure by local customs authorities, acting through State revenue machinery and in a sovereign capacity, fell within clause 28.

1. Appeal allowed. The answer to the stated question was a narrow yes. Seizure of cargo by a customs authority that is a State revenue authority acting in a sovereign capacity may constitute government interference under clause 28.
2. The ordinary meaning of interference was apt to include intervention by seizure. The relevant governmental actor was acting through its appropriate agency and in a sovereign capacity. The clause was directed to the seizure itself, which caused the delay, even though the submission of false documents caused the seizure.
3. The arbitrators’ inquiry into whether the customs authorities’ actions were ordinary introduced an impermissible gloss on the contractual wording. A seizure is a significant exercise of executive power. It is not converted into a routine action merely because it is predictable or may frequently occur when false documents are presented.
4. The distinction between sovereign government interference and the expected routine application of legislation was not required by the clause. The marginal heading, “Strikes and Force Majeure”, could not restrict the operative words. Force majeure was a label for a list containing a mixture of matters, and was not a term of art.
5. The Ladytramp [2012] EWHC 2879 (Com), also reported at [2012] 2 Lloyd's Reports 660, provided examples of routine port-authority activity that might not amount to government interference. Those examples were not comparable to sovereign seizure.
6. The decision was deliberately confined to the facts identified: seizure of cargo by a customs authority acting in a sovereign capacity. The court did not determine all circumstances that might fall within or outside clause 28. Higher-level governmental involvement strengthened the case, but was not essential; the same conclusion would have followed without it.

• Arbitration: By a partial final award dated 23 March 2018, the arbitrators held that seizure of the cargo did not constitute government interference under clause 28.
• High Court (Commercial Court): Butcher J granted permission to appeal on a question of law of general public importance. Knowles J allowed the appeal and answered the question narrowly in the affirmative.