Force majeure and Shell - the legal angle

Another call for force majeure, and another question of whether it can be a valid claim. In this case, the fuel company, Shell, has declared force majeure on fuel deliveries in Gauteng province, due to a two-week strike by truck drivers, the company said last Friday. “There is fuel available across the country so the issue is not fuel supply but the challenge is delivering it safely to our retail sites,” the company said in an emailed response to questions. The report on this says that force majeure refers to a measure that covers the company and its customers should delivery of fuel not occur due to circumstances beyond their control. But are striking workers a force beyond your control? That was the question that FTW posed when Transnet Port Terminals (TPT) last month declared force majeure over a strike at its Pier 1 container terminal in Durban. But, when this happened, a number of voices in the private sector freight industry questioned whether they actually had the right to deny claims from contracted clients because of strike action by their own work force. And the two legal contacts of FTW, Quintus van der Merwe of Shepstone & Wylie and Andrew Robinson of Norton Rose – both specialists in the freight and trade areas of business – gave us their views on the force majeure issue. Both confirmed that the term force majeure within the context of SA law did not have any precise definition, nor was it recognised as any special doctrine. Its significance in respect of our law depends on its use as an express term in a contract. So, in both the case of TPT and that of Shell, the issue of a strike prohibiting delivery would have to be written into their contracts with their buyers. And it would have to be fall within the concept of “supervening impossibility of performance” – where an obligation cannot be performed due to a cause beyond the performer’s reasonable control. The three causes for this that are usually recognised are: Act of God, vis maior and casus fortuitus – all of which are, very distinctly, forces beyond one’s control. The main question was whether TPT/Shell could claim that the strike was out of their control – which effectively stated that they were not in control of their own work forces. The two lawyers were agreed. “It could be difficult for employers to declare force majeure when their own labour is on strike.” CAPTION The question is – are striking workers a force beyond your control?