Shipbuilding Law Blog

The progress of a shipbuilding project may be affected by events that could delay the contractual delivery date. Such delays are often classified as Permissible or Non Permissible delays.  Permissible Delays are those caused by Force Majeure or other Events that would entitle the Shipyard to an extension of time for delivery of the vessel. Some force majeure clauses require Shipyard “to take all necessary steps to recover the delay” but are silent on details and costs implications.   Does it mean that the Shipyard must take acceleration measures to recover the delay at its own expense?

Force majeure clauses are frequently seen in shipbuilding [1] and other contracts. Recent attempts by parties to invoke economic crisis as a force majeure events excusing performance has met with little success. In Tandrin Aviation Holdings Limited v Aero Toy Store LLC and others [2], the court held at paragraph  40   “…under English law that a change in economic / market circumstances, affecting the profitability of a contract or the ease with which the parties’ obligations can be performed, is not regarded as being a force majeure event.  Thus a failure of performance due to the provision of insufficient financial resources has been held not to amount to force majeure - see The Concadoro [1916] AC 2 AC 199; and likewise a rise in cost or expense - see Brauer & Co. (GB) Ltd. v. James Clark (Brush Materials) Ltd. [1952] 2 All ER 497 and generally the discussion in Chitty on Contract, 30 th Ed., para 14-148.” Adams on Contract Drafting [3] states inter al...