Guidance note: responding to civil unrest in South Africa

map of Durban South Africa
Recent events in South Africa have brought the concepts of contractual performance and “force majeure”, once again, sharply into focus. Contracting parties, on both sides of the bargain, will need to be alive to the potential issues involved.

This note is intended to be a brief guide to enable supply chain stakeholders to navigate the legal principles involved. It is not intended to be a definitive statement of the law and, in any specific case, those affected should take their own legal advice and notify their usual claims contact in case of accidents which are likely to trigger cover with the TT Club or other insurer.

Kwa-Zulu Natal (KZN) has been particularly hard hit following widespread civil unrest, massive infrastructure damage (including the destruction of storage facilities, warehousing, distribution centres and cold stores) and looting. The landside logistics network has been seriously impacted. Many ports are effectively at a standstill. Currently there are both serious fuel and food shortages. The major road and rail networks have been comprised. The airports in KZN are also affected as staff are unable to get to work. As a consequence, many businesses have declared "force majeure".

South African law does not have a standalone principle of "force majeure" as such, but the Courts do recognise "force majeure" clauses where these are expressly incorporated into the relevant contract. To determine the effect and scope of such a clause, the Court will need to interpret the language used. Of course, any shortcomings in the language are likely to be read against the party seeking to rely upon the clause. Accordingly, whether seeking to rely upon a "force majeure" clause or, indeed, challenging a contractual counter party's right to do so, parties will need to give very careful consideration to the precise language used.

In situations where a contract is silent on "force majeure", it may still be possible for either party to seek to avoid performance of its contractual obligations, based upon the legal principle of "supervening impossibility of performance". In essence, this is very similar to "force majeure" and it refers to a situation where performance was possible at the time the contract was concluded, but subsequently became objectively and permanently impossible through no fault of the parties. The impossibility must be beyond the control of the parties and must be caused by either "vis major" or "casus fortuitus".

These are distinct legal concepts, although there is no practical distinction between the two. "Vis major" is akin to an 'act of God' or an irresistible force that includes events such as a natural catastrophes; "casus fortuitous" is a fortuitous or unavoidable accident, which no ordinary care or oversight could prevent, such as an act of the State, for example, new legislation or a declaration of war.

One must always bear in mind that whether a party is excused performance of its contractual obligations depends on the precise circumstances of the particular case and the nature of the impossibility. The rule will not help a party if the impossibility is self-created or if the impossibility is due to his or her fault. Another key point is that the event must render performance absolutely or objectively impossible. Mere personal incapacity to perform, or where performance has simply been made uneconomical for a party, does not mean that performance has become impossible.

There are clearly arguments in favour of the view that the civil unrest will fall within the ambit of "casus fortuitous" making performance of a contract impossible. That said, every case will need to be determined on its own facts and the onus of proving the impossibility will lie upon the party taking this position.

As always, the Club is here to provide guidance and support to its Members and the wider industry where possible and recipients of this email are encouraged to get in touch if further clarification is required. Our thoughts are with all those affected by this crisis.

Kind regards,

Justin Reynolds

Regional Claims Director Europe, Middle East & Africa

TT Club

Justin Reynolds

TT Club