By Kian Mellett
A dispute arose from the sale of Ukrainian corn after the sellers invoked force majeure when Black Sea Grain Initiative inspections were suspended during the shipment period. The High Court, on appeal under section 69 of the Arbitration Act 1996, considered whether the force majeure event was “unforeseeable,” whether timely notice was a condition precedent to relying on the clause, and how the force majeure and shipment extension provisions interact.
In May 2023, inspectors at the Joint Coordination Centre in the Black Sea stopped inspecting inbound non-Russian vessels. A vessel nominated to load 60,000 metric tonnes of Ukrainian corn had to wait for eleven days. When inspections resumed, the commercial fallout had already begun. The resulting dispute, ADM Industries Centers Ltd (t/a ADM Israel) v Inerco Trade SA [2026] EWHC 1873 (Comm), has now produced an important High Court decision on the meaning of “unforeseeable” in force majeure clauses, and a firm reminder about the consequences of late notice.
The contract was on GAFTA Form 48 terms, the standard form widely used in the international grain trade. Clause 20, headed “Prevention of Shipment”, lists the events that constitute force majeure. Among them, at sub-paragraph (k), are “unforeseeable and unavoidable impediments to transportation or navigation”. The clause suspends the seller’s obligation for the duration of the force majeure event, provided that the seller serves notice on the buyer within seven consecutive days of the occurrence of the event.
The sellers (Inerco) served their force majeure notice on 16 May 2023, nine days after the inspection stoppage began. The buyers (ADM Israel) rejected the notice and, even after inspections resumed on 18 May, maintained that the force majeure clause did not apply and that the shipment remained due by the original contractual date. The sellers treated this as a repudiatory breach, accepted the repudiation and resold the cargo.
A first-tier GAFTA tribunal found in favour of the buyers. That decision was overturned on appeal to the GAFTA Board of Appeal, which awarded the sellers approximately US$ 3.12 million in damages. ADM Israel then appealed to the High Court under section 69 of the Arbitration Act 1996 on three points of law. Two of those points are of particular significance.
The meaning of “unforeseeable”
The central question was what “unforeseeable” means in the context of clause 20. ADM Israel argued that the word should carry the meaning it bears in tort law. Where the threshold for foreseeability is famously low, requiring only a “real risk” that is “not far-fetched”. On that basis, since inspection stoppages had occurred before under the Black Sea Grain Initiative (albeit for shorter periods of one or two days), any stoppage, however long, was foreseeable.
The High Court (Paul Stanley KC, sitting as a Deputy High Court Judge) rejected that argument. ADM Israel’s approach would have imported a test developed for an entirely different purpose, determining whether a defendant owed a duty of care, into a contractual mechanism concerned with the allocation of commercial risk. The judge observed that words such as “foreseeable” carry a range of connotations and take colour from the context in which they appear. A force majeure clause exists to cater for events so unlikely that the parties could not reasonably be expected to have specifically provided for them. Applying the tort law threshold would have collapsed that function.
The court’s reasoning exposed a tension in ADM Israel’s position. The other events expressly listed in clause 20 (including “blockade”, “acts of terrorism” and “hostilities”) are all rare and unpredictable, but none of them is unforeseeable in the sense that nobody could ever imagine them happening. If “unforeseeable” in sub-paragraph (k) were given the narrow meaning the buyers advocated, it would stand out starkly from the other force majeure events alongside which it sits, demanding a threshold of virtual impossibility where the clause as a whole plainly contemplates something less extreme.
The court was equally careful to mark the other end of the spectrum, expressly declining to endorse the view that it is sufficient if an event is simply “unlikely”: there are events that are unlikely but whose probability is more than negligible. The negligible probability standard sits between these two poles.
This is a welcome clarification. The court identified a workable middle ground on a spectrum that practitioners have long navigated without much judicial guidance.
On the facts, the Board of Appeal had been entitled to distinguish between short inspection stoppages of one or two days (which had occurred from time to time and were therefore foreseeable) and the prolonged 11-day suspension in May 2023, the probability of which the Board had found to be statistically negligible. In the court’s view, the Board had properly directed itself on the law and reached a conclusion that was rationally open to it on the primary facts it found.
Notice as a condition precedent
The second significant point concerned the seven-day notice requirement. The GAFTA Board of Appeal had concluded that the notice requirement was not a condition precedent and that late notice could nevertheless be effective where the buyer had suffered no prejudice, characterising strict compliance as a matter of “technicalities and literal interpretation” that should yield to “commercial logic and natural justice”.
The High Court disagreed, and its reasoning is compelling. The judge held that the words in clause 20 are “unmistakeably the language of condition precedent”. There was nothing in the clause that encouraged or justified any implied test based on substantial justice, as the Board had suggested. The Board’s approach, excusing non-compliance where no prejudice was shown, would have introduced an uncertain, fact-sensitive enquiry into what ought to be a straightforward contractual mechanism. The notice requirement was not particularly onerous, and it served the commercially desirable purpose of enabling both parties to know where they stand. As the court observed, leaving a contractual counterparty in prolonged ignorance of a consequential force majeure event is almost inevitably prejudicial.
Because the Board had treated the notice timing as immaterial, it had not made an express factual finding on precisely when the force majeure event commenced. This mattered: if the event began on 7 May (when inspections stopped), the sellers’ notice on 16 May was outside the seven-day window and their claim would fail. The sellers, for their part, argued the event commenced two days later, once it became apparent that the stoppage was of the unusual and unforeseeable kind. The court remitted this question to the GAFTA tribunal for determination.
What this means in practice
The decision leaves those drafting and advising on force majeure clauses with several points to consider.
The “negligible probability” test is helpful, but it is not a bright line. As the court itself acknowledged, the assessment involves “finely balanced value judgements”. In a period of heightened geopolitical instability, where supply chain disruptions, sanctions regimes and armed conflicts are no longer background risks but active features of the commercial landscape, the boundary between a foreseeable (if unwelcome) disruption and an unforeseeable one will often be contested. The more frequently an event occurs, the less likely it will be characterised as unforeseeable. The court drew the distinction between foreseeable short inspection stoppages and an unforeseeable prolonged one. Taken to its extreme, the current political climate and turmoil may render some previously unforeseeable events more foreseeable in the future.
On notice, the practical message is straightforward but important: serve your force majeure notice within the contractual timeframe. The court’s treatment of “provided that” as the language of condition precedent is consistent with orthodox principles of contractual construction. Commercial teams dealing with an unfolding disruption may understandably focus on operational responses before turning to contractual formalities. This decision makes clear that delay carries real legal risk.
Perhaps the most interesting unresolved question is when a force majeure event begins for the purposes of a notice obligation. On the facts of this case, there is a plausible argument that the event was not the cessation of inspections on 7 May, but rather the point, perhaps two days later, at which it became apparent that the stoppage was of an unusual and unforeseeable duration. The GAFTA tribunal will need to grapple with this on remittal. The answer matters, because in many real-world scenarios the difference between a routine disruption and a force majeure event only becomes clear with the passage of time. A notice clock that starts running before the party could reasonably have known it was dealing with a qualifying event would sit uneasily with the court’s own analysis of what “unforeseeable” means.
The decision arose in the specific context of GAFTA commodity trading, but its reasoning on the meaning of “unforeseeable” and the effect of notice requirements has broader application. Anyone drafting, negotiating or relying on force majeure clauses in commercial contracts would do well to take note.
Kian Mellett is a Solicitors Qualifying Examination (SQE) student who earned his LL.B. Law, with honors, from University of Leeds in 2024. While completing his studies, Kian works as a paralegal/trainee at Duane Morris in London.