Sucden Middle-East v Yagci Denizcilik - The Muammer Yagci

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Sucden Middle-East v Yagci Denizcilik Ve Ticaret Limited Sirketi - (The “Muammer Yagci”)

English Commercial Court: Robin Knowles J: [2018] EWHC 3873 (Comm): 2 November 2018

Judgment Available on BAILII @

Simon Rainey QC and Andrew Carruth (instructed by Holman Fenwick Willan LLP) for Sucden (Charterers)

Robert Bright QC and Rani Noakes (instructed by Hill Dickinson LLP) for Yagci (Owners)



On an appeal against a partial final award on a question of law, the High Court held, in allowing the appeal, that a cargo seizure by the local customs authorities at the discharge port following the presentation of false documents to obtain inward clearance and assess duties on the cargo – which led to a four and a half month delay in discharge – was a loss of time caused by ‘government interferences’ within the meaning of clause 28 of the Sugar Charter Party 1999 form. In consequence, that time was excepted from laytime.

Case note contributed by Jim Leighton, LLM (Maritime Law), LLB (Hons), BSc (Hons), Solicitor of England & Wales, LMAA Supporting Member and International Contributor to DMC’s Case Notes


Owners chartered "Muammer Yagci" to Charterers for a voyage with a cargo of sugar to Annaba, Algeria. The charter included at clause 28 an exception provision, entitled “Strikes & Force Majeure”, which stated:

“In the event that whilst at or off the … discharging place the … 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 the terms and conditions of employment of the Officers and Crew, time so lost shall not count as laytime or time on demurrage or detention …”

As part of Charterers’ obligations under the charter, to discharge the cargo ashore at Annaba within the agreed laytime (or, otherwise, to pay demurrage, as liquidated damages, for any delay in discharging the cargo beyond the laytime so agreed), Receivers (acting on Charterers’ behalf) submitted import documents to the local customs authorities in relation to the cargo for discharge at Annaba.

The documents were submitted to obtain inward clearance of, and for the assessment of duties on, the cargo. In the event, the documents were false (submitted to achieve an illegal transfer of capital abroad in breach of foreign exchange regulations). Having discovered that to be the case (as there was noted to be a discrepancy between the invoice price and the authorised or market price), the local authorities responded by seizing the cargo, in exercise of their powers under customs laws and regulations. A delay to discharging the cargo of four and a half months ensued.

Owners claimed demurrage from Charterers for the resulting delay. The arbitrators had held that Owners were entitled to demurrage for the delay and that there had been no ‘government interferences’, on which Charterers could rely, within the meaning of clause 28 of the charter, to avoid the time counting (as laytime or as time on demurrage). The arbitrators had found that the steps taken by customs were ordinary, as being only to be expected under the circumstances.

Charterers appealed the partial final award on a question of law, pursuant to section 69 of the Arbitration Act 1996, that question being: "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?".


The judge noted that the phrase “government interferences” denoted an actor and act(s), where the most important word in this case was “interferences”. The judge considered that the question put to the court expressly and only concerned seizure of cargo by local customs authorities at the discharge port. The judge was of the view that the ordinary meaning of the word “interference” was apt to include an intervention of this specific type, being an act of government through its appropriate arm or agency, acting in its sovereign capacity.

The judge was not minded to accept Owners’ view that the question was not whether the government was involved but whether the government was “interfering”. Owners had highlighted that the clause in question concerned laytime, a process that would entail the involvement of government agencies, in that – for example – documents had to be submitted to the government as part and parcel of the process of discharging the cargo. The judge considered that the arbitrators had placed a gloss on the words of the clause when they had asked themselves whether all the steps taken were “ordinary” and had concluded that they were.

While the arbitrators had pointed out that the seizure of cargo was to be expected when false documents were presented, the view of the judge was that expected consequences are not the same as ordinary actions. The judge did not consider that, during the normal course of things, cargo is seized and property rights invaded in that way, even if seizure is experienced frequently or is predictable when there is a suspicion of forged documents. The judge considered the fact that the seizure of the cargo stemmed from forged documents reinforced the point.

Owners drew a distinction between “(i)… a government entity interfering in a manner that is unanticipated, officious and beyond the control of the parties and their proxies”, and (ii) “the expected and routine application of pre-existing legislation to the cargo and cargo documents”. While the judge could see the distinction, he considered that not to be one the wording of the clause required. He also considered that point (ii) under-described the circumstances to which the question on this appeal was directed (i.e. seizure of cargo by local customs authorities at the discharge port).

The judge considered that the conclusion he had reached on the language did not produce an outcome that in any way offended commercial common-sense; nor was the conclusion difficult to apply (a consideration to which he attached real importance). The judge did not consider that the same could be said of Owners’ view that:

“… only time lost because of seizure by customs, … as a result of matters outside the ordinary workings out of the application of law and regulations pre-existing the conclusion of the fixture, will constitute ‘government interference’ within the meaning of Clause 28 ...”.

The judge viewed Owners’ approach as not easy to apply, nor was that approach a formulation that could be derived from the words “government interferences”.

Owners argued that a conclusion that seizure of the cargo fell within the clause was a conclusion that offended commercial common sense. Such a seizure was, they said, to be considered as a “run of the mill” event. The judge viewed that as a call to view a seizure in the same way as a vessel being ordered off the berth by reason of poor weather or as an administrative re-scheduling of the cargoes due to a fire. The judge did not view that as being comparable to seizure.

Owners also relied on the submission of the false documents as the cause of the delay rather than the seizure by local customs authorities. The judge did not consider that further argument assisted the question on this appeal. The clause and the question were directed to the seizure. To the judge’s mind the seizure caused the delay, even if the submission of the false documents caused the seizure.

On the above basis, the judge allowed the appeal on a narrow “yes” (concerned only with the seizure of a cargo by a customs authority that is a state revenue authority acting in a sovereign capacity).


The judge has commercial law experience but lacks shipping law pedigree, making this judgment an aberration from familiar shipping law principles:

(1) A restrictive approach is taken to applying laytime and demurrage exceptions given charterers’ obligation to discharge the cargo within the laytime;

(2) The party seeking to rely on an exception should not be responsible for the circumstances brought about and relied on within the defined exception;

(3) The party seeking to rely on an exception must take reasonable steps within a reasonable time to seek to mitigate the situation (if practicable); and

(4) A less literalistic (last-in-time) approach is taken to assessing causation, by seeking to identify the dominant and effective cause of the incident.

There is, unfortunately, understood to be no appeal from the judgment being pursued, for reasons unrelated to the merits on the clause 28 question.

The appeal court authorities have made tolerably clear that the following factors are to be considered in an objective manner taken as a whole (fn.1):

(i) The natural and ordinary meaning of the words used;

(ii) The overall purpose of the term and of the contract;

(iii) The relevant background knowledge of the parties; and

(iv) Where appropriate, commercial common sense.

The limitation, from the appeal court authorities, is that commercial common sense and the surrounding circumstances should not be used illegitimately.

What that means is the importance of the language used in the contract should not be undervalued, so greater effect is to be given the clearer the language used.

The judge here fell short by inadequate consideration of (i) and placing too much emphasis on the perceived severity and abnormality of “seizure” for (ii) to (iv).

The judge here chose to use “intervention” (which can often have a positive connotation based on the context) as the synonym for “interference”.

But, the word “interference” (which includes amongst its synonyms “meddling”, “intrusion” and “obstruction”) ordinarily means wrongful action.

So, the ordinary meaning of “interference”, which the judge did not explore in any real depth, is not so clear as to justifying undermining (ii) to (iv).

Footnote 1: Arnold v Britton [2015] UKSC 36; Actavis UK Ltd v Eli Lilly & Co [2017] UKSC 48, Kason Kek-Gardener Ltd v Process Components Ltd [2017] EWCA Civ 2132 – Lewison LJ at [15]; and NHS Commissioning Board v Silovsky [2017] EWCA Civ 1389 – Gross LJ at [39]