The concept of force majeure in present-time Ukrainian export contracts

Iryna Moroz, a Partner at AGA Partners, one of the leading law firms in Ukraine, discusses the implications of the ongoing Russian-Ukrainian war on force majeure clauses in Ukrainian export contracts. She highlights the challenges faced by traders and the legal complexities arising from the conflict. Iryna delves into arbitration cases, underscoring the adaptability of contracts amidst the war. She also touches on the establishment of a temporary grain corridor, its impact on contract adaptations, and the broader effects on the market. Iryna emphasizes the need for a balanced approach to address the concerns of both buyers and sellers in this volatile environment.

Grain Accumulation and Port Issues:

Significant stocks of grain accumulated in Ukrainian ports due to various disruptions.

There were disputes over who should pay for storage and transshipment.

Contract Cancellations and Disputes:

Many contracts were canceled due to adapted force majeure clauses or special cancellation clauses.

Disputes arose on how to settle these issues, with some sellers taking back and reselling the cargo.

Arbitration Cases:

There are ongoing arbitration cases, especially for higher amounts of damages.

The complexity arises as buyers claim the right to cancel contracts based on various clauses, while sellers argue against unlawful cancellations.

Russian-Ukrainian War and Force Majeure:

The ongoing war is not considered a force majeure for export contracts from Ukraine.

Specific events linked to the war that directly impact contract performance can be considered for force majeure.

Proof of Force Majeure:

Proof should be specific and detailed, not just a general statement about the state of war.

Evidence from various sources, including police reports, port captains, and media, is needed to support force majeure claims.

GAFTA/FOSFA and Force Majeure Clauses:

Standard agreements often reference GAFTA/FOSFA, but their force majeure clauses are too general for the current Ukrainian market.

Sellers and buyers often adapt and amend these clauses to fit the specific situations and risks they face.

Temporary Grain Corridor:

The establishment of a temporary grain corridor is seen positively as it allows for the continuation of grain exports.

It might influence ongoing disputes and lead to the adaptation of contract terms to accommodate new risks and realities.