Laysun Service Co Ltd v Del Monte International GmbH [2022] EWHC 699 (Comm) (Calver J) – 28 March 2022

In December 2017, Del Monte entered into a contract of affreightment (COA) with Laysun to transport refrigerated bananas from the Philippines to Iran. The agreement was for 36 voyages from January 1, 2018 – December 31, 2018. The terms stated Del Monte was responsible for all risks and costs of cargo loading and unloading. The force majeure clause of the COA provided for “any circumstances beyond the reasonable control of that party that prevents such party, practically or legally, from performing any or all of its obligations under this Agreement …”

After 17 shipments, Del Monte stopped providing cargos. Laysun sought arbitration for Del Monte’s failure to supply the remaining cargos. Del Monte claimed force majeure due to US Sanctions against Iran, which prevented payment to an Iranian bank, and stricter import restrictions.

The tribunal ruled for the charterer, stating that the force majeure clause was triggered when Iran ceased issuing import permits, resulting in Del Monte’s inability to perform its obligations under the terms of the COA. With no third party named for delivery, Del Monte was within its rights to stop the shipments. Laysun appealed the award, citing error of law under section 69 of the Arbitration Act 1996.

The Court upheld the arbitration decision and dismissed Laysun’s appeal. The claims of error of law were deemed not legal in nature but rather posed a challenge to the tribunal’s findings.

The force majeure provision was applicable because the cargo could not clear customs and subsequently be unloaded without bills of lading. The purchasers could not receive the shipments because they could not obtain new import permits. The duty of the charterer was to discharge the cargo at the destination; since Del Monte could not complete this through reasonable measures, force majeure was valid.