Law firms field force majeure queries

The West Asia conflict has disrupted trade through the Strait of Hormuz, prompting Indian companies to seek legal advice on force majeure clauses. The energy sector is particularly affected, with legal queries focusing on the applicability of these clauses and procedural requirements. Legal experts warn that sustaining such claims is difficult, especially if alternative solutions are available. Venkatesh Raman Prasad, partner at JSA Advocates & Solicitors, said if LNG can still be delivered through alternative routes or logistical arrangements, even if it becomes more expensive, companies may struggle to rely on the clause. However, if a contract lacks a force majeure clause, companies may rely on Section 56 of the Indian Contract Act, which provides that a contract is discharged if an unforeseen event renders performance impossible. Courts, however, apply this rule strictly and do not allow it if the contract has only become more expensive or difficult to perform. Read more