High Court clarifies meaning of “unforeseeable” in force majeure clause

The High Court has held that the word “unforeseeable”, used to define a force majeure event in a sale contract, meant “of negligible probability”: ADM Industries Centers Ltd v Inerco Trade SA [2026] EWHC 1873 (Comm).

Force majeure clauses provide a mechanism for excusing a party’s liability for failure or delay in the performance of its contractual obligations arising from events or circumstances beyond its reasonable control. Under English law, force majeure is a creature of contract, and contracting parties will often specifically set out the events that constitute an event of force majeure, as well as the procedural requirements for invoking the clause. 

This decision highlights that the meaning of terms such as “unforeseeable” in a force majeure clause is not fixed but falls to be determined by reference to the relevant context. Rejecting the buyer’s argument that the threshold for foreseeability is very low (ie a "real risk" that is "not far-fetched"), the court held that the word must be read in light of the purpose of the clause in which it appears. In the context of a force majeure clause concerned with the allocation of residual contractual risk, it held that "unforeseeable" denoted an event "of negligible probability" - that is, one so unlikely to occur that it was commercially justifiable for the parties to disregard it when contracting.

The decision also underscores the importance of compliance with contractual notice provisions when invoking force majeure. In this case, the court held that timely notice was a condition precedent for reliance on the force majeure clause, based on the specific contractual language used amongst other matters. As the court observed, requirements such as time periods serve the desirable commercial purpose of enabling parties to know where they stand. 

For further information on the topic of force majeure see Force Majeure: An International Comparative Analysis, co-edited by Julian Copeman (Partner) and Richard Mendoza (Of Counsel).

Background 

The case concerned a contract for the sale of Ukrainian corn between the defendant seller and the claimant buyer. The contract incorporated GAFTA Form 48 (a standard form contract created by the Grain and Feed Trade Association), which contains a force majeure clause (clause 20) dealing with the prevention of shipment. Clause 20 lists the various events that constitute an event of force majeure including “unforeseeable and unavoidable impediments to transportation or navigation”. The clause also provides that, if the seller’s performance is prevented by a force majeure event, performance is suspended for the duration of that event provided that the seller serves notice on the buyer within seven consecutive days of the occurrence of the event. 

Following Russia’s invasion of Ukraine in 2022, the Black Sea Grain Initiative was established, requiring all vessels entering the Black Sea for the purposes of loading grain to be inspected. In May 2023, while the vessel nominated by the seller to carry the corn was waiting to be inspected, Russian inspectors unexpectedly ceased inspecting all inbound non-Russian vessels. Inspections were halted for 11 days, meaning that the seller could not deliver the corn on time. 

The seller served a force majeure notice on the buyer nine days after inspections stopped, which the buyer rejected as invalid. Even after inspections resumed, the buyer continued to maintain that the force majeure clause did not apply and that the shipment remained due on the original contractual date. The seller treated that position as a renunciatory breach of contract, which they accepted, and resold the cargo. 

Arbitration proceedings were commenced, as provided for under the contract. A first-tier tribunal held that the seller had not established that they could rely on a force majeure event. The decision was overturned on appeal to the Board of Appeal (the “Board”), which awarded the seller damages of USD 3.12 million, plus costs.

The Board’s decision was appealed to the High Court under section 69 of the Arbitration Act 1996. Three points of law were in issue, two of which are of particular interest and shed light on the courts’ approach to force majeure clauses:

1. The meaning of “unforeseeable” in clause 20; and 
2. Whether compliance with the notice requirement in clause 20 was a condition precedent to the seller’s right to rely upon it.

Decision 

The High Court (Paul Stanley KC sitting as a Deputy High Court Judge) upheld the Board's decision on the meaning of "unforeseeable" but found that it had erred in law in finding that the notice requirement was not a condition precedent. It therefore remitted the award to the Board for further factual determination on that point. 

The meaning of “foreseeable” 

The High Court held that the Board had correctly construed the word “unforeseeable” as meaning “of negligible probability”.

The buyer argued that "foreseeable" is a term consistently used in ordinary life and in law simply to mean something that can be foreseen, even as a very remote possibility. Relying on cases concerning tortious liability, they suggested that the threshold for foreseeability is a very low one: a “real risk”, “one that is not far-fetched” even if extremely unlikely. 

The court disagreed, noting that words such as “foreseeable” have a range of connotations and that such words take colour from their context and from the purposes they serve in that context. They are words that naturally refer to a spectrum, or degree, and where precise boundaries are to be drawn in particular cases depends very much on context. 

Here, the relevant context was a force majeure clause concerned with the allocation of residual contractual risk. The major purpose of clause 20 was to cater for events which are so unlikely to occur that one could not expect the parties to have specifically allocated their risk exclusively to the seller. The other force majeure events expressly listed in clause 20 (such as “blockade” and “strikes”) – whilst rare and unpredictable – are not unforeseeable in the narrow sense that nobody would ever imagine they could happen. Therefore, to construe “unforeseeable” in the narrow sense advocated by the buyer would make the event stand out as an outlier from all or most of the others listed in the clause. 

Accordingly, the court held that “unforeseeable” did not mean more or less inconceivable or so far-fetched that nobody would ever imagine it happening. Rather, an event is “unforeseeable" for the purposes of clause 20 "if it is one whose probability appears, when the contract is concluded, to be so remotely likely to occur and affect its performance that it can be described as 'negligible'". 

On the facts, the Board had been entitled to distinguish between short inspection stoppages of one or two days (which had occurred from time to time and were therefore foreseeable) and a prolonged suspension of the kind that had occurred in May 2023, the probability of which the Board had found to be statistically negligible. In the court’s view, the Board properly directed itself and reached a conclusion that was, on the primary facts it found, rationally open to it. The Board made no legal mistake. 

Notice as a condition precedent

The High Court held that compliance with the notice requirement in clause 20 was a condition precedent to the seller’s right to invoke the clause, and that the Board's contrary conclusion was legally wrong. 

The Board had held that non-compliance was “irrelevant”, characterising it as a matter of "technicalities and literal interpretation" which could and should be excused in the absence of proven prejudice to the buyer. Rejecting that approach, the court noted that the words "provided that" in clause 20 were "unmistakeably the language of condition precedent". There was nothing in clause 20 that encouraged or justified any implied test based on substantial justice as suggested by the Board. In any event, leaving a contractual counterparty in prolonged ignorance of a contractually consequential force majeure event is almost inevitably prejudicial. The court further observed that the notice requirement was not particularly onerous and served the desirable commercial purpose of enabling the parties to know where they stand.

Because of the Board’s conclusion that the notice requirement was not a condition precedent, it had not needed to resolve whether the seller’s notice was given in time. This depended on precisely when the force majeure event commenced. The buyer argued that the event commenced on the date the inspections stopped, meaning the seller’s notice was late, whereas the seller argued that it commenced two days later, given that the Board had held that a suspension of one or two days would not be unforeseeable whereas a longer suspension would be. As no definitive finding existed on this point, the court remitted the award to the Board. If the Board was to determine that the event began on the date the inspections stopped (or the day after), the proper conclusion as a matter of law would be that the seller had not properly invoked the force majeure clause and their claim should have failed. If the event began on a later date, the rest of the award would stand.