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Partner @ Triumph & Co. | Licensed lawyer across the UAE

RTI Ltd v MUR Shipping BV: The Supreme Court has reached a verdict on the force majeure case, addressing a "fundamental point of principle." This decision holds significant importance within the legal realm. 15 May 2024 OVERVIEW The Supreme Court, in its ruling on RTI Ltd v MUR Shipping BV [2024] UKSC 18, which was delivered on Wednesday, May 15, 2024, has granted MUR's appeal, thereby reinstating the verdict of Jacobs J. The court, in complete agreement, has determined that the force majeure clause contained within the parties' Charter Party Agreement (COA) allows MUR to temporarily halt its selection of vessels for performance due to anticipated delays in RTI's payment of freight in US dollars, as stipulated by the COA. These delays are a direct result of the sanctions imposed on RTI's parent company. The primary matter presented to the Supreme Court concerned the correctness of the Court of Appeal's decision to support the tribunal's ruling in the underlying arbitration. The tribunal has come to a conclusion that MUR is unable to invoke force majeure as it has failed to meet the requirements outlined in clause 36.3(d). According to this clause, an event or situation can only be deemed force majeure if it cannot be "overcome by reasonable endeavors (sic)." The Court of Appeal, in line with the tribunal, contended that a problem or situation is deemed resolved only when all its adverse effects have been completely averted. Nevertheless, the Supreme Court adopted a distinct perspective, acknowledging the appeal as a profoundly significant principle with the potential to be universally applicable to all force majeure clauses. The central issue being considered is whether the existence of an informal solution to a contractual deadlock might impede a party from invoking force majeure. The court raised concerns about the potential consequences of non-contractual solutions, as they could weaken the importance of the parties' contractual rights and overlook the essential role of certainty in commercial agreements. #arbitration. #Force_Majeure

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