MUR Shipping BV v RTI Ltd [2022] EWCA Civ 1406 (27 October 2022)

MUR Shipping BV v RTI Ltd [2022] EWCA Civ 1406 (27 October 2022)

Acceptance of payment in euros, with conversion to US dollars at no detriment to MUR, would have overcome the force majeure event within the meaning of clause 36.3(d) of the contract. The clause does not require strict contractual performance if the adverse consequences of the event are fully avoided by reasonable endeavours. Therefore, MUR was not entitled to rely on the force majeure clause to suspend its obligations.

Citation
[2022] EWCA Civ 1406
Parties
Claimant/respondent: MUR Shipping BV; Defendant/appellant: RTI Ltd
Jurisdiction
England and Wales
Judgment Date
27 October 2022
Procedural Posture
Appeal From Arbitration Award (commercial Contract) / Court of Appeal (civil Division)
Outcome
Appeal allowed (by majority); arbitration award restored.
Legal Topics
Force Majeure Clauses, Contractual Performance, Payment Obligations, Sanctions, Arbitration Appeals
Commercial Law Contract Law Shipping Law Force Majeure Clauses Contractual Performance Payment Obligations Sanctions Arbitration Appeals

Case Brief

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Parties

MUR Shipping BV

Claimant/respondent

RTI Ltd

Defendant/appellant

Procedural Posture

Appeal From Arbitration Award (commercial Contract) / Court of Appeal (civil Division)

Legal Issues

  1. 1 Whether a force majeure clause suspends contractual obligations when payment in the contractually specified currency is impeded by sanctions but payment in an alternative currency is offered without detriment to the receiving party.
  2. 2 Whether 'reasonable endeavours' in a force majeure clause require acceptance of non-contractual performance if it achieves the same result without detriment.

Ratio Decidendi

Acceptance of payment in euros, with conversion to US dollars at no detriment to MUR, would have overcome the force majeure event within the meaning of clause 36.3(d) of the contract. The clause does not require strict contractual performance if the adverse consequences of the event are fully avoided by reasonable endeavours. Therefore, MUR was not entitled to rely on the force majeure clause to suspend its obligations.

Court Disposition

Appeal allowed (by majority); arbitration award restored.

Orders

  • The appeal is allowed.
  • The award of the arbitrators is restored.