Export bans, port closures, extreme weather. Sellers reach for force majeure first — and tribunals cut through it fast. What the clause actually requires, and what it doesn't cover.
GAFTA 100 — the standard CIF grain contract — contains a prohibition clause that excuses performance where shipment is prevented by certain specified events. It exists because grain traders operate in environments where governments impose export restrictions, ports close without notice, and weather creates genuine impossibility.
The clause is not there to help sellers escape from bad commercial decisions.
"In case of prohibition of export, blockade or hostilities, restrictions on trading, or of any executive or legislative act done by or on behalf of the government of the country of origin or the country from which the goods are to be shipped, restricting export, whether partially or otherwise, any such restriction shall be deemed by both parties to apply to this contract..."
The event must be within the specified categories. Not every government action qualifies. Licensing requirements, inspection delays, bureaucratic obstruction — these are frequently raised and frequently rejected.
The event must prevent performance of this specific contract. A partial export ban may only excuse the portion of the cargo affected. "Prevented" means prevented, not inconvenienced or made more expensive.
Notice must be given promptly. GAFTA 100 requires the seller to give notice within a specified time after the occurrence of the force majeure event. Miss this window, and the protection may be lost regardless of whether the underlying event was genuine.
GAFTA tribunals have seen every variation of force majeure argument over decades. They look for evidence: official government decrees, port authority communications, contemporary correspondence showing the seller genuinely believed performance was impossible.
What they are sceptical of: force majeure claims that happen to coincide with a sharp increase in the commodity price. The clause is not a price hedge. If shipment was prevented by rising market prices rather than by a government act, that is a commercial problem, not a force majeure event.
In CIF string trades — where the same cargo is sold and resold along a chain of buyers — a force majeure event at the origin affects everyone in the string. Failure to pass the notice correctly at any point can leave a middle buyer or seller exposed even where the original event was genuine.
If an export restriction partially restricts export, the allocation of available export licences among open contracts becomes a live issue. If you have limited availability and multiple contracts, document your allocation methodology carefully and apply it consistently.
Force majeure under GAFTA 100 is a narrow defence with strict procedural requirements. The moment you believe a qualifying event has occurred, give notice immediately and start building the evidence file: official documents, internal communications, records of alternative options considered and rejected. A legitimate event poorly documented will not save you.