LAYSUN SERVICE CO LTD V DEL MONTE INTERNATIONAL GMBH

[2022] EWHC 699 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Calver, 28 March 2022

Contracts (contract of affreightment) – Interpretation of force majeure clause – Sanctions preventing discharge of cargo – Arbitration – Appeal on point of law – Questions of mixed fact and law – Arbitration Act 1996, section 69

The parties had entered into a contract of affreightment (COA) with the claimant as owners and the defendant as charterers, to carry refrigerated bananas from the Philippines to Bandar Bushehr in Iran from 1 January to 31 December 2018. There were to be 36 voyages but after 17, the charterers stopped providing cargoes and gave declarations of force majeure under clause 8 of the COA on 25 and 28 June 2018. This was following the impositions of sanctions on Iran by the US which, the charterers said, meant that payment for the bananas could not be made and import permits could not be obtained. The bananas were sold by the charterers’ sister company and the charterers had no involvement in receiving payment or arranging import permits; however, the COA specified that they were to bear the cost and risks of loading and discharge. The sister company’s buyers in the UAE sold the bananas on to Iranian buyers, who performed the unloading. In arbitration, the tribunal found as facts that the buyers were unable to make payments and that the sister company was unable to receive payments from April or May 2018; and that the government of Iran stopped issuing new import permits from the end of June until at least 31 July 2018. The charterers appealed on questions of law.