The six-day saga of Ever Given ended on the afternoon of March 29, when the 1,300-foot cargo ship was finally removed from the banks of the Suez Canal. However, with more than 300 ships waiting to pass through the canal, the impact on international shipping is expected to be in the last few months, and the cost of world trade has been estimated at over $ 50 billion.

The nautical congestion has and will continue to delay all aspects of the construction supply chain, from traditional building materials to heavy equipment and oil supplies. Significant project delays will follow shortly – especially for the largest industrial projects. Contractors and project owners (and, in turn, subcontractors and contractors) are likely to lead to disputes about these delays, and in these disputes contractors are likely to turn to force majeure provisions on construction contracts.

Force majeure provisions in construction contracts release a party from liability due to “force majeure” and other circumstances beyond the control of the party. Force majeure clauses can expressly include or explicitly exclude project delays and increased costs due to delays in the dispatch of materials. However, it is more likely that most clauses are silent on the specific question of whether shipping delays are excusable acts of God. In this case, the outcome will depend on the language of the general provisions of the contract relating to circumstances beyond the control of the party, as well as precedents in the relevant jurisdiction. Courts examining force majeure claims in similar contexts have generally found that exceptional shipping delays beyond the control of a contractor can constitute force majeure – even if caused by human error rather than weather events or other traditional “acts” God’s “related – but have also emphasized this. It is the burden of the applicant party to take all reasonable measures to mitigate the effects of the alleged force majeure. In this context, the mitigation measures required could include sourcing late material from another supplier or even working with the shipping company on alternative arrangements (e.g. some companies’ decision to reroute the Cape of Good Hope).
Source: Dorsey & Whitney LLP