Miller Magazine Issue: 152 August 2022

76 ARTICLE MILLER / AUGUST 2022 disputes, it vividly illustrates the possible legal consequenc- es of the drought and thus might serve as a lodestar for the current circumstances. HIGH THRESHOLD FOR FORCE MAJEURE From the outset, the arbitrators noted two fundamental rules of English law on force majeure which laid the basis of their award. First, the tribunal emphasized that force ma- jeure is not ‘a term of art’ under English law. A party is al- lowed to use it as a defence only within the four corners of the agreed clause. This means that only those events that are expressly specified in the force majeure provision can constitute a ground for releasing a defaulter from liability. Any other ground which is not directly specified in the clause cannot protect a defaulting party from the unfortunate events impeding the contract performance. Second, it was established by the tribunal that the sell- er bore the burden of proving force majeure which was a rather high one. This is a direct consequence of a tradition- ally strict attitude of English law to the performance of con- tracts allowing the release from liability only in exceptional circumstances. The defaulting party must demonstrate that the force majeure event truly prevented the performance of the contract, it does not suffice to show that performance became merely burdensome or unprofitable. SYMPATHY TOWARDS THE DIFFICULTIES Having established these basic principles, the tribunal pro- ceeded with their application to the facts of the case. The arbitral panel noted that the drought, in general, could be treated as a force majeure event. In their opinion, the pro- longed dry conditions could fall within the notion of ‘Act of God’ or the catch-all phrase ‘any other event comprehended in the term “force majeure”’. As a next step after establishing the event of force majeure, the seller had to prove that this drought directly affected his ability to perform the contract. Accordingly, the arbitrators proceeded with analyzing the reports which were filed as evidence of force majeure. They acknowledged that these reports showed “catastrophic damage to the corn crop” in the specified farms and the “ex- tremely serious” effect of the drought. Although the reports did not represent a formal certificate, they were accepted by the tribunal as proper evidence of force majeure. This deci- sion was explained by the fact that the GAFTA clause does not require the tender of formal certificates to prove force majeure (it merely refers to ‘satisfactory evidence’). In this way, the arbitrators have taken a flexible approach making emphasis on the content of evidence rather than its form.