Force Majeure Request Due to Flood Impact on Chennai and Thoothukudi Ports

Force Majeure Request Due to Flood Impact on Chennai and Thoothukudi Ports

Subject :Economy

Section: Fiscal Policy

1. Unprecedented Rains and Floods:
   • Chennai and Thoothukudi ports faced heavy losses and disruptions in maritime trade due to unprecedented rains in Tamil Nadu.
2. Force Majeure Appeal:
   • Trade members involved in port operations have urged the Chennai Port Authority and VOC Chidambaranar Port Authority to declare Force Majeure at Chennai and Thoothukudi ports, respectively.
3. Federation of Association of Stevedores Appeal:
   • The Federation of Association of Stevedores has requested the VOC Port Authority to consider December 11, 12, and 13 as non-working days due to the impact of heavy rains.
4. Force Majeure Situation:
   • The association emphasized that the heavy rain and its consequences have created a Force Majeure situation, preventing stevedores from working and causing delays and penalties.
5. Challenges Faced:
   • Reduction in migrant labor essential for stevedores.
   • Delays in deliveries and receipts affecting ship turnaround.
   • Industries shut down, leading to challenges in receiving or delivering goods to/from the port.
6. Tuticorin Stevedores Association’s Perspective:
   • Unprecedented rainfall starting on December 16 and subsequent floods.
   • Vessel operations suspended from December 17.
   • Industries shut down, hindering goods transportation.
   • Request to consider the situation as an Act of God and declare Force Majeure until normalcy is restored.
7. Demurrages and Storage Issues:
   • Accumulation of demurrages due to delayed pick-up and delivery.
   • Inability to fulfill contracts and pay demurrage and storage costs.
8. Process for Force Majeure Declaration:
   • While the port authority itself cannot declare Force Majeure, it can recommend it to the Ministry.
   • The Ministry, upon recommendation, will issue a Gazette Notification.

About Force Majeure

Force Majeure is a legal term that refers to unforeseeable circumstances or events beyond the control of parties involved in a contract that may excuse non-compliance with the contractual obligations. These events are often considered “acts of God” or “acts of nature.”

Force Majeure clauses are typically included in contracts to address situations where performance becomes impossible or impractical due to unexpected and uncontrollable events.

Key points about Force Majeure:

1. Unforeseeable Events: Force Majeure events are those that could not have been anticipated or controlled by the parties when entering into the contract. These events are often outside the reasonable control of the affected party.
2. Excusing Performance: When a Force Majeure event occurs, the affected party may be excused from performing its contractual obligations, either temporarily or, in some cases, permanently.
3. Contractual Provision: Force Majeure is usually addressed in a specific clause within a contract. This clause outlines the types of events that qualify as Force Majeure, the obligations of the parties during such events, and the potential remedies available.
4. Examples of Force Majeure Events: Common examples of Force Majeure events include natural disasters (such as earthquakes, floods, hurricanes), wars, strikes, acts of terrorism, and government actions that impact contractual performance.