Worldwide there are approximately 3,000 merchant ports and the work of the Harbour Master can vary widely from country to country and from port to port even within the same country.
On 30 January, the China Council for the Promotion of International Trade released a statement confirming that the People’s Republic of China was offering force majeure certificates to local companies unable to fulfil their international contractual obligations due to the coronavirus outbreak. Relevant directives and certificates do not, for the time being, apply to Hong Kong law contracts where the counterparty is a non-Chinese entity.
The widening quarantine restrictions in China, together with airlines suspending and reducing flights to and from China and the closure of ports in Hubei province indicate disruption to import and export of crude, iron ore, soybean and steel, to name but a few. Given the importance of China, in addition to the human cost of novel coronavirus, the financial impact and disruption to global trade look set to continue.
Where parties are trading with Chinese entities, it appears that the Chinese state is endeavouring to facilitate the exercise of force majeure clauses in international sale contracts for local companies. The validity of claiming force majeure will be subject to the scope of the specific contractual provisions and evidence that alternative means of contractual performance were not available. In a statement issued by Hill Dickinson LLP on 5 February it was emphasised that the International Commercial Law Firm highlights the main issues which arise below.
In English law, force majeure is a contractual term that cannot be implied. It arises solely on the basis of provisions which are included in a contract and as such, there is no standard clause and force majeure provisions vary from contract to contract. The effect is usually to relieve a party from performance of their obligations when one of a defined number of events occur.
Whether the delay and disruption resulting from the novel coronavirus is a force majeure event will depend on the particular wording of a contract, and not the parties’ intentions. In circumstances where there is no specific reference to disease, epidemic or quarantine, the same may be caught by ‘Acts of God’, ‘Acts of Government’ or by general wording such as ‘other circumstance beyond the parties’ control’.
If a force majeure event can be identified, then it must be the only effective cause of default.
In Classic Maritime Inc v Limbungan Makmur SDN BHD  EWCA Civ 1102, the charterers argued that they should be relieved of their obligations to provide cargoes for shipment following a dam collapse. The Court of Appeal held that the clause was not a true force majeure clause, but was instead an exception clause and further that the charterers would not have been able to perform in any event. As such, a party may not be excused performance of its obligations under the contract despite the occurrence of an unexpected and extraordinary event, when it would not have been able to perform its obligations even in the absence of such an event.
The effect of a force majeure clause may vary from contract to contract. Some operate to suspend obligations during the period of the applicable event (for example the GAFTA ‘prevention of shipment clause’), some give rise to a right to terminate and some may relieve the non-performing party of liability. Almost all clauses require that notice be given of the force majeure event.
A force majeure clause usually requires the defaulting party to show that it used its reasonable endeavours to prevent, or at least mitigate, the effects of the force majeure.
In Channel Island Ferries Ltd v Sealink UK Ltd  1 Lloyd’s Rep 323, the Court of Appeal held that any clause which included language referring to events “beyond the control of the relevant party” could only be relied upon if all reasonable steps had been taken by aid party to mitigate its results.
If force majeure does not apply, then the doctrine of frustration may provide relief in circumstances where the issue goes to the root of the contract and renders it impossible to perform or the performance or essentially different to the contract envisaged. Whether frustration may apply is both fact and contract sensitive.
As disruption in China, a key market for import and export, is set to continue, traders and shippers alike should:
The information here was provided by Beth Bradley, Partner (London), Damien Laracy, Partner (Hong Kong) and John Agapitos, Paralegal, Hill Dickinson LLP.
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On 11 August the IMO reported that it had joined international efforts to assist the Government of Mauritius, following an oil leak from the bulk carrier mv Wakashio, which ran aground on 25 July off Pointe d’Esny natural area, south-eastern coast of Mauritius.
IMO and the United Nations Environment Programme (UNEP)/United Nations Office for the Coordination of Humanitarian Affairs (OCHA) Joint Environment Unit have jointly deployed an oil spill response expert. Due to COVID-19 travel restrictions and border closures in Mauritius, the expert was (on 11 August) awaiting onward travel via specially chartered UN flight from Nairobi, following COVID tests.
Approximately 3,894 tonnes of low-sulphur fuel oil, 207 tonnes of diesel and 90 tonnes of lubricant oil were on board the Wakashio. An amount of oil leaked following severe weather.
It is understood that the affected area is located in a very sensitive zone that includes the Blue Bay Marine Park, Iles aux Aigrettes, and the Ramsar sites.
At the time of writing (11 August) satellite mapping support was being sought from UNOSAT, to provide an indication of the extent of the spill and to inform the response effort.
A new Just In Time Arrival Guide which aims to provide both port and shipping sectors with practical guidance on how to facilitate Just In Time Arrivals has been released. This was reported by IMO on 11 August.
To download the Guide readers are invited to see IMO web link here: http://www.imo.org/en/OurWork/PartnershipsProjects/Documents/GIA-just-in-time-hires.pdf
This Guide has been developed by the Global Industry Alliance to support low carbon shipping (Low Carbon GIA), based on research and discussion amongst its membership, and the Guide documents the findings of a series of industry roundtables which brought together nearly 50 companies and organizations who are key stakeholders in the port call process.