News

US Supreme Court decides that the safe berth clause establishes a warranty of safety. A monumental, yet widely expected, decision.

“Free Trade Agreements and European Integration of SEE Countries”, Faculty of Law University of Belgrade
Master’s Program, Jean Monnet Project (sponsored by European Commission)
21 and 22 March 2020

http://jmm.ius.bg.ac.rs/files/2017/10/6.Institutional-framework-of-trade-liberalization-in-SEE-countries.pdf

It has been widely reported that LNG receivers in China have recently declared force majeure on LNG contracts due to disruptions caused by the 2019 novel coronavirus (2019-nCoV) which has now been given the official name COVID-19 (“novel coronavirus”). This was done after force majeure certificates were issued from the China Council for the Promotion of International Trade (“CCPIT”), with the approval of China’s Ministry of Commerce.

BIMCO rounded off 2019 by releasing an overhaul of the BIMCO Sanctions Clause. Owners previously held the right to ignore charterers’ orders based on owners’ “reasonable judgment”. That right is removed. This will be of some comfort to charterers, who will be pleased to see the back of a subjective test in owners’ favour.

This note reports on an interesting and important US federal court decision concerning sanctions enforcement and, significantly, a rare instance of a business challenging OFAC’s interpretation of a US sanctions regime. Exxon was successful in voiding a US$2 million sanctions penalty. However, for the rest of us this case demonstrates why caution around sanctions remains of paramount importance.