The High Court has allowed a summary judgment application in relation to a breach of contract claim, finding that there was no realistic prospect of the defendants being able to rely on force majeure and change of trade sanctions provisions in the agreement: Litasco SA v Der Mond Oil and Gas Africa SA & Anor (Rev1) [2023] EWHC 2866 (Comm).
The decision considers the difference between force majeure clauses triggered when a force majeure event "prevents" performance (ie renders it impossible) and those triggered where performance is "hindered" (which require something less than impossibility). It suggests that the courts may be slow to allow a party to rely on force majeure to suspend payment of an accrued debt obligation on the basis that paying the debt has been made more difficult. Even in the context of a clause that is triggered where performance is hindered, the court commented that a significant degree of difficulty in performance would be required – perhaps approaching, albeit falling short of, impossibility.
The decision also clarifies the application of the "ownership and control" test under the UK sanctions regime, following recent obiter comments made by the Court of Appeal in Mints v PJSC National Bank Trust [2023] EWCA Civ 1132 (see our blog post on the decision here). It said the test requires an "existing influence" by a designated person over the relevant affairs of the company, not just one they may be in a position to bring about.
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