A Corn Odyssey: Questions About Force Majeure

A dispute over a ship stranded in the Black Sea raised two interesting points on force majeure: the meaning of “unforeseeable” and whether a notice requirement was a condition precedent.

A grain deal gone wrong

Inerco agreed to sell Ukrainian corn to ADM Israel, due to be shipped between April and May 2023. A force majeure clause dealing with “prevention of shipment” covered “unforeseeable … impediments” and required notice “within 7 consecutive days of the occurrence”. A separate extension clause required notice “not later than the next business day” after the “originally stipulated period”. 

Due to the invasion of Ukraine, ships entering the Black Sea to load grain were inspected. In May, the Russian inspectors stopped inspecting inbound vessels. Inerco therefore invoked the force majeure clause. When ADM Israel rejected this, Inerco treated that as a renunciatory breach and terminated the contract.