Helen Conybeare Williams, counsel and solicitor advocate at the Haynes and Boone London office, was featured in a Mealey’s International Arbitration Report article about how global economic events have led to an increase in filings.
Here is an excerpt:
Mealey’s: What, if any, events had an impact on the global economy that have led to increased filings?
Williams: The COVID-19 pandemic has put even greater pressure on the upstream oil and gas industry which is still absorbing the effects of market collapses in 2008 and 2014 and low oil prices. In the maritime and offshore construction sector, as a result of global lockdowns and repercussions on international supply chains, many companies issued or received force majeure notices suspending performance based on the COVID-19 outbreak, where their contractual force majeure clauses included specific wording covering the pandemic.
There appear to have been relatively few contract cancellations, where such contracts also provided for termination for force majeure, resulting in London arbitration referrals. There may be less appetite for disputes in this sector in the context of the general economic downturn. Also, terminations based on force majeure require special consideration in English law, including about the causative significance of such event. These force majeure issues may still play out in the context of project construction disputes in case of late delivery of ships or offshore vessels. In relation to charter parties, the impact of the pandemic has given rise to a number of legal issues, and potential for disputes up the contractual chain depending on whether the provisions are back to back. Again, parties have looked to see if their charter terms include force majeure clauses which can be relied on to excuse non-performance or cancellation of the charter or whether the English law doctrine of frustration applies meaning that the charter is automatically brought to an end.
These disputes may give rise to complex issues of fact and law. If these mechanisms are not available, terminations for convenience with the associated early exit payments can be the only option if a party is not able to fulfill the charter terms. These types of dispute have resulted in new London arbitration references arising out of the ongoing pandemic, alongside the usual diet of construction disputes in the energy sector.
To read the full article, click on the PDF below.
Conybeare-Williams-Mealey's-Report-Nov2020.PDF