Transit through the Azov-Don Sea Canal has in practice been stopped, and the market is already shouting force majeure. Under English law, however, the first step is not to panic but to open the contract.
There is no general doctrine of force majeure in English law. Force majeure exists only because, and only to the extent that, the contract says so. GAFTA 48 and 49 do contain such a clause, and closure of the ADMK may potentially fall within hostilities, blockade, or impediments to navigation.
That is how the event should be described in a notice, rather than as an export ban. But the event alone is not enough. It must actually prevent performance of your contract, not merely make the shipment more expensive or unsettle the market.
Timely notice and evidence matter: official notices, agents' letters, terminal correspondence, refusals of passage, and other proof. The arbitral question will not simply be whether the canal was closed, but why that closure prevented performance of this particular contract.
If the contract does not specify a particular loading port and its wording allows another port, arbitrators will likely ask why the goods could not be shipped via Novorossiysk or Tuapse. Freight and logistics difficulties do not by themselves excuse performance.
Tsakiroglou v Noblee Thorl made the English position clear long ago: if there is an alternative way to perform the contract, performance is still required.
Commercial inconvenience is not the same thing as legal impossibility. If, however, the loading port is expressly fixed in the contract, the seller has a stronger argument that performance at the agreed place has become impossible.
The position is usually stronger here. If the port is specified and access to it becomes impossible, the situation looks much closer to the prevention required by GAFTA. Even then, the contract does not terminate automatically. With a proper notice, performance is suspended.
If the force majeure event continues for 21 days after the end of the shipment period, the unaffected party may cancel the unfulfilled part. If it does not do so and the prevention continues for a further 14 days, the unfulfilled part is cancelled automatically.
Notice must be given within 7 consecutive days of the event or not later than 21 days before the beginning of the shipment period, whichever date is later. Miss that window and, for GAFTA purposes, it is as if force majeure never existed.
The dangerous move is to declare force majeure, stop performing, and relax. If the grounds are not there, arbitrators may treat that as a wrongful refusal to perform, allowing the counterparty to terminate and claim the market difference.
That is why the sensible strategy is boring: send a protective notice, cite the force majeure clause, describe the event accurately, identify the affected obligations, reserve rights, and avoid sudden moves. Sometimes the smartest step is to cancel nothing too early.
Closure of the ADMK does not automatically mean that force majeure has arisen. Open the contract. Check the basis, the loading port, and the force majeure clause. Then talk to the counterparty about extending time, changing port, or amending the contract.
But protect your legal position first. Only then start shouting force majeure in the group chat. Between saying the words and proving them there may be several million dollars. And before leaning too happily on GAFTA, make sure your Special Conditions have not rewritten half its rules.