Construction Law/Force Majeure
If a fire breaks out in one of the factory supplying cement which consequently disrupts concrete supply to the project. Can this be considered as Force Majeure under FIDIC form of contract.
Thank you for this question.
Under the FIDIC red book form of contract, for example, the list of potential events categorised as force majeure is open, an event must satisfy four criteria (sub-clauses 19.1(a)-(d) inclusive) to be considered as a force majeure event.
In the present case I consider that the issue you complain of, which is non-availability of cement, might fulfil the criteria; however it is a grey issue and will depend upon the circumstances. Could this have been provided against beforehand? Quite possibly; in which case the matter would not satisfy all four listed criteria.
If you are buying cement to site batch concrete, then the effect may be more dramatic than if you are obtaining concrete from an external batching plant. When buying from an external batching plant t is usual to have one, or more back up suppliers. The questions for consideration are then: are all the local suppliers affected by the fire; and what is the effect overall?
Referring to sub-clause 19.2 the event must prevent the contractor from performing one, or more of its obligations; if it does not the event is not considered as a force majeure event.
I would appreciate you providing more information so that I can consider this further.
I hope that this assists you.
Follow me on Twitter: @CernoOrg
For my weekly industry newsletter e-mail to firstname.lastname@example.org, stating SUBSCRIBE in the subject line
Training and consulting services are available, bespoke to companies and individuals.
John Dowse can be contacted by e-mail to email@example.com (When e-mailing, please include “AllExperts” in the subject line.)