Force majeure might apply where the partial
performance, delayed performance or total non-performance of the
contract is as a result of unforeseeable and insurmountable
occurrences,wholly beyond your control.
But only if these came into being after the contract was concluded,
and if the goods were available on time.
Remember also that the burden of proof is on you, the shipper,
whereas in case of arbitration the final decision will in any event
rest with the arbitrators. In this respect it is well to recall
that all parties to a transaction must always exercise due
diligence: that is, they must be able to prove that at all
times they acted correctly…
Most buyers will cooperate in instances where delays are
inevitable. Amicable solutions are always the best. Of course
buyers are entitled to be kept fully up to date at all times and it
is in your best interests to ensure this is done.
The actual question is not whether you are entitled to claim force
majeure, but rather whether you will be in a position to make a
successful defense if you do so claim. Many details will have to be
provided if force majeure is to be claimed successfully. For
example: (1) Was shipping space requested well ahead of time,
especially if space problems were already public knowledge? (2) Is
there documented proof that the cargo was properly booked but that
subsequently it was refused, i.e. shut out? (3) Did you inform the
buyer of the situation? As soon as you yourself became aware of
it? This last point assumes of course that you did not
already know of the problem at the time the contract was
concluded…
There are important differences between the definition of
force majeure in the European and the US standard forms of
contract, and we recommend you familiarize yourself with
these.
For more information go to 04.03.04 and 04.05.08 (Link below). To
download the standard contracts themselves visit www.ecf-coffee.org (European
Contract) and www.green-coffee-assoc.org
(GCA Contract).
Amicable settlement of differences is always the best
solution. Arbitration should only be seen as a last
resort but if an amicable solution proves impossible then
arbitration is the only option. In the coffee trade disputes are
not taken to a court of law: they are resolved through
arbitration instead. Secondly, there is of course
no guarantee that the arbitrators will find in your favour. All
arbitrations are decided on the basis of the facts and the facts
only. We would also repeat that all parties to a transaction must
always exercise due diligence: that is, you must
be able to prove that at all times you acted
correctly.
How and where to apply for arbitration depends on the contract you
signed. If it was based on the standard form of
contract of the Green Coffee Association of New York, then
arbitration will automatically take place in New York under that
Association's rules. If the transaction was based on the European
Contract for Coffee then the place where arbitration will be held
should have been stated in your contract. Contact addresses for
coffee associations in Europe that conduct arbitrations can
be found at www.ecf-coffee.org
Go to 04.05.08 through 04.05.10 for more on claims and related
subjects.
Go to 07, Arbitration, for details of arbitration rules and
procedures in Europe and the USA. (Links below).
Posted 6 December 2004