Sanctions can allow party to invoke Force Majuere clause despite offer to pay in Euros

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In an interesting, recent English court judgment dealing with a s. 69 appeal of an arbitration award, the High Court confirmed that sanctions preventing Charterer's from making U.S. dollar payments as prescribed in ?the contract does entitle ship owner to invoke the Force Majuere clause despite the charterer's offer to pay in Euros.

?In allowing the appeal, the court confirmed the arbitrator's finding that sanctions did have an impact on the counterparty's ability to make US dollar payments but rejected the tribunal's findings that the 'reasonable endeavours' clause in the contract required the owners to accept the offer to pay in Euros.

?The court held "the exercise of reasonable endeavours did not require the Owners to sacrifice their contractual right to payment in US$, and with it their right to rely upon the force majeure clause. If there was a contractual right to payment in US$, and a contractual obligation to pay in that currency, then this was a right and obligation which formed part of the parties' bargain. The exercise of reasonable endeavours required endeavours towards the performance of that bargain; not towards the performance directed towards achieving a different result which formed no part of the parties' agreement." Jacobs, J. at para 131 of MUR Shipping BV v RTI Ltd [2022] EWHC 467 (Comm)

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