Insights

Sanctions clause bites in respect of US secondary sanctions: Lamesa v Cynergy. In Lamesa Investments Limited v Cynergy Bank Limited [2019] EWHC 1877 (Comm) the English Commercial Court was asked to consider whether a party could be excused from contractual performance which could expose it to US “secondary sanctions”. The case is a useful reminder to consider the reach of relevant foreign sanctions and ensure contractual provisions are drafted with these in mind.

The Court of Appeal has overturned an earlier, somewhat controversial, decision of the Commercial Court in relation to force majeure clauses. The case grapples with two key questions: whether it is necessary to show “but for” causation in order to invoke a force majeure clause and whether the innocent party is entitled to damages even if the contract would not have been performed in any event...

The impact on charterparties and issues for consideration. The past few decades have seen a trend of globalisation and integration across the world with the breakdown of conventional borders both via expanding international trade and increasing digital connectivity.

The English High Court was recently called on in Eleni Shipping Limited v Transgrain Shipping BV (“The Eleni P”) [2019] EWHC 910 (Comm) to consider whether an act of piracy near, but outside, the region generally identified as the Gulf of Aden was sufficient to place the ship off-hire under a time charter. Although the dispute centred round particular rider clauses, this decision is a useful reminder of the process by which charterparties are construed by the courts and arbitral tribunals and the need for clear provisions to put a ship off-hire.

In response to industry-wide concerns as to whether there will be sufficient supplies of low sulphur fuel available after 2020, the IMO has made provisions in MARPOL. In the event of non-availability, ships are not required to deviate to find compliant fuel and may submit a fuel oil non-availability report, or “FONAR”. In this article we consider the extent of the protection afforded by these provisions and related contractual issues.