pi_circular Compliance & regulationOperational risk Skuld
Credit to: Kateryna Kon / Shutterstock.com On 12 March, the World Health Organization declared the Covid-19 outbreak to be a pandemic as the virus spread around the world. The number of infections continues to escalate, and the governments of more countries are imposing strict measures to try and contain the spread of the disease. The result of these measures has had a significant impact on the shipping industry. Lockdown of workers and businesses has slowed down activities at countless ports and at production facilities, leading to substantial delays at both loading and discharge ports. Demand for certain goods has reduced, and a shortage of storage capacity for some bulk and liquid cargoes has developed. We have recently heard of stevedores refusing to go to work due to their fear of coming into contact with the virus. The situation continues to change day by day and new measures are adopted by governments and port authorities at a very rapid rate, often without sufficient time for a full analysis of their potential impact. In this article, we consider the contractual difficulties facing Skuld's charterer and trader Clients as a result of such delays and how Skuld can assist. Force Majeure Many charterers will identify that the circumstances arising are likely to amount to "force majeure" and indeed they may be on the receiving end of force majeure notices from suppliers, subcontractors or ports. Whilst some (civil) legal jurisdictions recognize a general concept of force majeure, English law does not. This means that, if a charterparty or contract is subject to English law, a party can only claim protection based on force majeure, if that charterparty or contract includes a force majeure clause. The scope of the protection which a party can claim will depend on the terms of the force majeure clause: The clause will list the circumstances, in which it can be triggered: for example, this may include disease / epidemic, shutdown of mines or production facilities, sh
COVID-19: Force majeure, frustration and exclusion clauses
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