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Published 25 July 2022
With the ever increasing list of sanctions more critical than ever to global shipping, the recent decision of Laysun Service Co Limited v Del Monte International GMBH  has confirmed that a well-drafted force majeure clause can, when unforeseen events take place such as sanctions, provide relief from contractual obligations. The decision also provides some interesting lessons for those seeking to appeal an arbitral award.
Laysun Service (‘the Owners’) and Del Monte International (‘the Charterers’) had entered into a Contract of Affreightment (‘the COA’) for the carriage of refrigerated bananas from the Philippines to Iran. When the Charterers stopped delivering fruit for loading, the owners sued for their losses. The Charterers denied liability under the force majeure provision in the COA.
The arbitral tribunal held that the Charterers were entitled to rely on the force majeure clause to excuse performance finding, as a fact, that there had been two events triggering the force majeure clause in the contract: a payments issue, as payments from Iran to another country became impossible due to US sanctions; and an import permits issue, due to restrictions to import bananas into Iran.
The Owners appealed the matter to the High Court on the basis that the arbitral tribunal had erred in its findings on issues of law, as opposed to fact. The court disagreed, holding that the Owners were seeking to attack the tribunal’s findings of fact which could not be re-opened to challenge under Section 69 of the Arbitration Act 1996 (‘section 69’). Ultimately, no errors of law were established by the Owners and the appeal was constructed on a false factual premise.
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