In light of the unprecedented challenges faced by the shipping industry in recent years, BIMCO has recently released its long-awaited model force majeure clause for inclusion in charterparties and other shipping contracts.
Reed Smith first reported on the clause in January 2021 in our article ‘All eyes on BIMCO’s new clauses’ .
Now that the clause is finally here, what does it say and how can it support the industry?
BIMCO’s new clause aims to provide a comprehensive regime for parties to follow if certain circumstances arise, beyond their reasonable control, that prevent performance of a charterparty or other shipping contract. Force majeure clauses in carriage contracts are traditionally quite rare, with English law preferring to treat the issue as one of risk allocation.
A clearly drafted force majeure clause offers a party the flexibility to suspend performance, and potentially terminate a contract, without, in theory, facing a claim from the unaffected party for breach of contract.