By Noor Kadhim
In July 2016, ExxonMobil declared force majeure on one of its key projects, in Qua Iboe (Nigeria), the country’s largest export stream. This allegedly followed a spate of destructive activity by a protest group, affecting Exxon’s project site. In these times of political instability, such declarations are becoming more frequent. Accordingly, to what extent has the force majeure clause evolved from being a bona fide justification for the impossibility of contractual performance to a back-door method of termination in times of economic difficulty or physical insecurity? In a post originally published on Kluwer Arbitration Blog, Noor Kadhim considers how force majeure is applied by the English courts and in ICC arbitral practice, focusing on the recent ICC award (1) Gujurat State Petroleum Corporation Ltd; (2) Alkor Petroo Limited; (3) Western Drilling Contractors Private Limited v (1) Republic of Yemen; (2) The Yemeni Ministry of Oil and Minerals(“Gujurat”) case. As the English case-law and Gujurat decision show, force majeure clauses are creatures of contract that must be interpreted and applied on their terms. Accordingly, each case will turn on three main elements: what is specifically included by the parties in their clause, the tribunal or judge’s perception of risk, and its evaluation of whether the evidence produced by the parties satisfies the requirements of the clause.
