Alex Church’s Post

See my latest case note on the UKSC’s judgment in RTI v MUR, concerning the limits of a “reasonable endeavours” proviso in a force majeure clause in a shipping contract, exclusively at DMC’s Case Notes #shipping #maritimelaw #forcemajeure #arbitration #litigation

Clarification on the Scope of ‘Reasonable Endeavours’ in Force Majeure Clauses Force majeure clauses which relieve a party from performing its obligations under a contract during the occurrence of an extraordinary event beyond the control of the parties such as war, riot or sudden legal change (Force Majeure Event) have for many years been a perennial feature of construction, and often other services, contracts. Whilst precise terms vary, force majeure relief usually applies where a Force Majeure Event has occurred despite parties using reasonable endeavours to prevent the Force Majeure Event from affecting contract performance or to mitigate its effects where it does. The recent judgement by the Supreme Court in RTI Ltd v MUR Shipping BV [2024] UKSC 18 suggests however, that in the absence of further drafting, the obligation to avoid or mitigate is significantly narrower than previously thought. More on this in Len's blog 👇 https://lnkd.in/emSiBJtq Len Freedman Eileen Elizabeth Barr Lauren Little

The Supreme Court today unanimously allowed the appeal in RTI v MUR Shipping [2024] UKSC 18: a requirement to use reasonable endeavours to overcome force majeure does not incorporate a requirement to accept non-contractual performance. The appeal concerned the interpretation of a COA force majeure clause and whether a requirement to exercise reasonable endeavours to overcome force majeure necessitated accepting an offer of non-contractual performance (i.e. payment in Euros instead of USD in order to circumvent US sanctions). The Supreme Court treated the case as raising a “fundamental point of principle” that theoretically might affect all force majeure clauses, namely whether the availability of a non-contractual solution to the impasse could prevent a party declaring force majeure. The court was concerned that if non-contractual solutions had this effect, it would undermine contractual rights and commercial certainty.

Customs & Trade alert: AUKUS in focus In an industry replete with acronyms, the AUKUS acronym has gained significant use and attention across the last few years. With AUKUS now established and its members implementing legislative and administrative arrangements to facilitate the intended outcomes of the partnership, Andrew Hudson examines Australia’s commencement of legislating to facilitate AUKUS arrangements and some of its initiatives in our latest Customs & Trade alert. Read more >> https://bit.ly/45sO5RO If you are an individual or Australian business and would like to discuss any current trade or supply chain issues your business is facing, please contact a member of our Customs & Trade team below: Andrew Hudson, Partner, on 03 9321 7851 Alexander Uskhopov 文龙, Lawyer, on 03 9321 7806 A version of this article was first published in June 2024 by the DCN - Daily Cargo News. #RigbyCookeLawyers #customs #trade #internationaltrade #tradelaw #customslaw #auslaw

Following the successful appeal in MUR Shipping BV v RTI Ltd, the UK Supreme Court has confirmed the parameters of a “reasonable endeavours” provision in a force majeure clause, after sanctions were imposed on a contracting party. Katie Palms, James Carter, Sohail Ali, Dan Jewell, and Francesca Marsden explore how this decision highlights the significance the courts place on contractual sovereignty and certainty under English law. Click on the link below to read more. https://lnkd.in/eNF_neyY #SupremeCourt #Sanctions #ForceMajeure #Freight #Shipping #ContractLaw

#SANCTIONS - FORCE MAJEURE - NON-CONTRACTUAL PERFORMANCE ⚖ Will a contracting party be prevented from relying on a force majeure clause by reason of failing to accept an offer of non-contracted-for performance from the counterparty? The UKSupremeCourt said no, in a unanimous judgment in RTI Ltd v MUR Shipping BV, delivered on 15 May 2024. 👨⚖️ 👨⚖️ 👨⚖️ 👨⚖️ 👨⚖️ A detailed analysis of the case and its implications - including as regards sanctions aspects, #drafting of force majeure clauses, and the balancing of certainty and commercial pragmatism - can be read here: https://bit.ly/4e93SsM Thanks to Jonathan Kelly and Polina Lyadnova for working on this with me! 🙏 #FMCs #sanctions #forcemajeure #litigation #shipping #maritime #commerciallitigation #supremecourtruling #arbitration

The UK Supreme Court issued a landmark decision yesterday in RTI Ltd v. MUR Shipping BV [2024] UKSC 18  clarifying how a"reasonable endeavours" proviso within a force majeure clause should be interpreted. The Court did not delve into the particular wording of the clause, instead, it decided to give a general interpretation to such clauses within a force majeure provision. This is significant news for anyone involved in drafting or litigating. The case centred on a contract between RTI Ltd (RTI) and MUR Shipping BV (MUR) containing a force majeure clause with a "reasonable endeavours" provision. The contract stipulated payment in US dollars (USD) by RTI to MUR. When US sanctions hindered RTI's ability to pay in USD, MUR invoked force majeure. RTI countered by offering payment in Euros, covering the conversion cost to USD. MUR rejected this, leading to arbitration and subsequent appeals. The key question was whether the "reasonable endeavours" proviso obliged MUR to accept a non-contractual payment method (Euros). The Court held the following: (i) Focus on Contractual Performance: The Court emphasized that "reasonable endeavours" aim to uphold the agreed-upon performance, not find substitutes. Here, the focus was on USD payments as per the contract. (ii) Freedom of Contract: Parties have the right to refuse non-contractual performance. The Court highlighted the principle of freedom of contract, including the freedom not to accept alternatives. (iii) Certainty in Contracts: Clear and unambiguous terms are crucial, especially for "reasonable endeavours" clauses in unforeseen circumstances. Such terms are necessary for business certainty. The Court therefore prioritized honouring the specific agreement (USD payment) over unclear alternatives. Key Takeaways: (i) This case sets a precedent for interpreting "reasonable endeavours" in force majeure clauses. (ii) Contractual performance takes precedence over alternative solutions during force majeure events. (iii) Parties retain the right to reject non-contractual performance. (iv) Clear contract terms, especially within "reasonable endeavours" clauses, are essential for business certainty.

Shipping business is profitable but also risky. One of the biggest threats is the possibility of ship arrest due to violations committed by previous owners. In our new article, we explore how Due Diligence helps avoid financial losses and legal complications. You will learn about the importance of vessel checks, ways to minimize the risk of arrest, and how modern realities and new challenges impact the shipping industry. The Interlegal team will share their experience and explain how to avoid serious legal issues for your business. Read the full article here: https://lnkd.in/gkjumWd3

This case serves as a reminder of how important it is for owners to incorporate the Hague-Visby rules into their contracts. The ‘negligent navigation’ defence was key for the owners to be able to defend against all of charterers’ claims. Illegal anchoring in Malaysia is no small problem: just around Johor, our correspondents note there have been 117 vessels arrested since the beginning of 2022. In addition comes the vessels that quietly pay substantial fees in order to be released and to avoid further sanctions. These figures can easily exceed six figures, according to trade press reports. - Oliver Goossens, Kim Jefferies, and Adrian Moylan of Gard AS

In the world of business, contracts are still king. Dive into our analysis of the Supreme Court's ruling in RTI Ltd v. Mur Shipping BV to understand the implications for your organization. #LegalInsights #Trade #TradeLaw