MUR Shipping BV v RTI Ltd [2024] UKSC 18

15 May 2024

Ø   Force majeure clause

Ø   Duty to overcome force majeure event

Ø   US OFAC sanction and ensuing inability to pay in US dollars

Ø   Offer to pay the equivalent sum plus conversion charges in a different currency

Lord Hamblen and Lord Burrows (with whom Lord Hodge, Lord Llyod-Jones and Lord Richards agreed) held:

·             A party invoking a “force majeure” clause must show the subject event was beyond its control and could not be avoided or mitigated by using reasonable endeavours.

·             That means the use of “reasonable endeavours” to overcome or avoid the force majeure event and not to overcome or mitigate the “effects” or “consequences” of the force majeure event.

·             The obligation to use “reasonable endeavours” to overcome the force majeure event does not require the party invoking the force majeure clause to accept a non-contractual performance in mitigation of the force majeure event.

·             Hence, when a contract requires payment in US dollars and the paying party is sanctioned by US such that it could not make any payment in the US dollars, a force majeure event occurs.

·             The receiving party is entitled to invoke the force majeure clause, and it is not open to the paying party to say that it offered, in mitigation of the force majeure event, payment of the equivalent sum in another currency and the costs of converting the payment from that currency to the US dollars so that there will no detriment to the receiving party if it accepts the offer.

·             The receiving party has a right to insist of the contractual performance and to refuse the offer of a non-contractual performance.

·             The principles of “certainty” and “predictability” are important in English commercial law.

·             The “freedom of contract” includes the freedom not to contract and to refuse non-contractual performance.

·             A contractual right is not foregone absent very clear words.

Great Lakes Reinsurance (UK) Plc v RAV Bahamas Ltd [2024] UKPC 11

21 May 2024

Ø   Theft of vessel from marina

Ø   Whether operator of marina owed a duty of care in tort to prevent theft

Ø   Whether operator under a contractual duty of care

Lord Burrows held:

·             “it has become well-established that, for a duty of care to arise grounding liability for a failure to confer a benefit, restrictive principles going beyond foreseeability and proximity must be applied”.

·             “To establish liability for a failure to confer a benefit, which is the exception rather than the rule in the common law, one of the recognised exceptional principles must be established”.

·             “just as there was no assumption of responsibility for the purposes of the tort of negligence, we agree with the Court of Appeal that there was no contractual duty of care to prevent theft of the vessel. There was no express duty of care on RAV to prevent theft of a vessel in the lease agreement and there is no basis for implying such a term”.