Force majeure

Force majeure is the situation-based doctrine under which a supervening event may excuse liability for non-performance, provided the supervening event is unforeseeable, uncontrollable, and makes the performance of an obligation impossible – thus qualifying as a “force majeure event”. Force majeure events may include natural disasters¹ or man-made constraints (e.g. war,² civil unrest,³ or coup d’Etat⁴). See also Investment arbitration and pandemic.

The defence has been accepted by international tribunals since the 19^th century when it was frequently argued. States’ invocations of force majeure have become rarer and have not been upheld to date in investment treaty arbitration.

Force majeure, like necessity and distress, is a defence available where supervening events affected the continued performance of the State’s international obligation. The essential difference is volition. Under necessity or distress, the non-performance results from a decision by its author having evaluated that such conduct was the only way to, respectively, avoid a grave and imminent peril to the State’s essential interest or save lives entrusted to the author, whereas force majeure involves an involuntary conduct.⁵

Force majeure should also be distinguished from supervening impossibility of performance under Article 61 of the 1969 Vienna Convention. The former excuses non-performance of the obligation for so long as the event exists, while the latter justifies the termination or suspension of the treaty providing the obligation.

Force majeure is available under both customary international law⁶ and many domestic laws. It may also derive from the contract between the investor and the State.

Force majeure is recognised by general international law in relation to the non-performance of international obligations.⁷ It is codified as a circumstance precluding responsibility in Article 23 of the ILC Articles on State Responsibility,⁸ to which international tribunals refer.⁹

Force majeure is recognised as general principle of law.¹⁰ However, there may be differences among national laws as to its conditions – e.g. the nature of events that qualify,¹¹ or the degree of impossibility required¹² – and its consequences, notably the extent of its exonerating effect.¹³ In common law, force majeure is not codified and must be included in a contract to be invoked as defence.

Investor-State contracts usually contain a force majeure clause designed to excuse performance of contractual obligations.¹⁴ It will typically provide for identification criteria, and/or a list of events qualifying as force majeure, as well as the effects on liability and on the continuation of the contract, and an obligation of notification.¹⁵

At time of writing no investment treaty contains a provision on force majeure as an excuse for non-performance. The few treaties mentioning the notion contemplate it in the context of a standard of no less favourable treatment in the compensation for investment losses due to certain contingencies including – with one exception¹⁶ – force majeure.¹⁷

Whatever the applicable law, three elements are generally required for an event to qualify as force majeure.¹⁸ These elements are described as follows.

An event is unforeseeable when it could not be foreseen at the time the agreement laying down the obligation breached was concluded.¹⁹

The event must have been “beyond the control” of,²⁰ or “external” – non-attributable – to,²¹ the party asserting force majeure. The party must not have caused or induced the event.²²

Contrary to a private actor,²³ a State cannot invoke an act of government as a force majeure event²⁴ – a clause providing otherwise has been narrowly construed.²⁵ Could a State entity rely on force majeure in respect of the acts of its parent State? The case law does not exclude it.²⁶

The event must render the obligation impossible to perform.²⁷ Impossibility is sometimes conflated with irresistibility,²⁸ which general international law, as codified, regards as a discrete criterion alternative to unforeseeability.²⁹

Should impossibility to perform be absolute? Yes:³⁰ this standard is generally interpreted as requiring the demonstration that no alternative measures were available to achieve performance.³¹ Some tribunals have been less demanding on this point.³²

Economic difficulties for instance, be they severe, thus do not suffice to excuse performance of an obligation of payment;³³ only the total financial collapse of the State,³⁴ or a technical impediment to payment,³⁵ could qualify as force majeure. 

The force majeure exception is not self-judging. The party invoking it must prove that its conditions are met.³⁶

Is the standard of assessment of the force majeure criteria objective or subjective? No case law has emerged. The analysis looks to the party concerned, to the circumstances in which the party finds itself, but this does not entail subjectivity.³⁷ Decisions regarding impossibility suggest that the standard is objective, assessing whether by reasonable judgment any person in the same circumstances and in relation to the same obligation would have found it impossible to perform.³⁸ The same goes for uncontrollability, linked to due diligence.³⁹

If successfully asserted, force majeure will, under general international law, preclude the wrongfulness of the conduct coerced by the supervening event.⁴⁰

No general obligation to compensate or mitigate the losses caused by force majeure events exists in international law.⁴¹ Damages could be obtained from the State affected in case it failed to provide the standard of protection.⁴²

In contracts, effects of force majeure will usually be provided. Beyond the sole obligation affected,⁴³ the contract itself may be suspended as long as the force majeure conditions prevail.⁴⁴ Except provided otherwise, it is only when such suspension has jeopardized its viability that the contract may be terminated.⁴⁵

Antonmattei, P.H., Contribution à l’étude de la force majeure, LGDJ, Paris, 1992, p. 316

Augenblick, M. and Rousseau, A., Force Majeure in Tumultuous Times: Impracticability as the New Impossibility, Journal of World Investment & Trade 13, 2012, pp. 59-75.

Bjorklund, A., Emergency Exceptions: State of Necessity and Force Majeure, in Muchlinski, P., Ortino, F. and Schreuer, C. (eds.), The Oxford Handbook of International Investment Law, O.U.P., 2008, pp. 459-522.

Böckstiegel, K.H., Hardship, Force Majeure and Special Risk Clauses in International Contracts, in Horn, N. (ed.), Adaptation and Renegotiation of Contracts in International Trade and Finance, Kluwer Law International, 1985, pp. 159-172.

Brunner, C., Force Majeure and Hardship under General Contract Principles: Exemption for Non-Performance in International Arbitration, Kluwer Law International, 2009, xxxii + 589 p.

Carpentieri, L., The Invocation of State Defenses in Times of Conflict: Force Majeure, Necessity and the Libyan Example, International Journal of Arab Arbitration, 2019, Vol. 11, pp. 7-29.

Chapter 10: Defenses, in Doak Bishop, R., Crawford, J.R., Reisman, M.W. (eds.), Foreign Investment Disputes: Cases Materials and Commentary, 2^nd ed., Kluwer Law International 2014, pp. 897-964.

International Law Commission, Draft articles on Responsibility of States for Internationally Wrongful Acts, November 2001, Supplement No. 10 (A/56/10), pp. 31-143, sp. pp. 76-78 (Article 23 – Force majeure). 

McKendrick, E., Force Majeure and Frustration of Contract, 2^nd ed., Lloyd’s of London Press, 1995, p. 363.

Paddeu, F., Justification and Excuse in International Law, Cambridge University Press, 2018, xliv + 556 p., sp. pp. 285-333 (Part II, Section 7 – Force majeure).

Paddeu, F., A Genealogy of Force Majeure in International Law, The British Yearbook of International Law, Vol. 82, No. 1, 2012, pp. 381-494.

Paparinskis, M., Circumstances Precluding Wrongfulness in International Investment Law, ICSID Review, Vol. 31, No. 2, 2016, pp. 484-503. 

Szurek, S., Force Majeure, in Crawford, J., Pellet, A., Olleson, S. (eds.), The Law of International Responsibility, Oxford University Press, 2010, pp. 475-480. 

Szurek, S., La force majeure en droit international, Thèse de doctorat, Université Paris II Panthéon-Assas, 1996, 645 p.

U.N. Secretariat, ‘Force majeure’ and ‘fortuitous event’ as circumstances precluding wrongfulness: survey of State practice, international judicial decisions and doctrine, U.N. Doc. A/CN./4/315, Yearbook of the International Law Commission, 1978, Vol. II(1), pp. 61-227.