Force majeure is new 'abracadabra' amid Covid-19

But lawyers warn that it is not a 'get out of jail free' card for energy players, despite low prices and soft demand

Annabeth Leow

Published Sun, Mar 1, 2020 · 09:50 PM

Singapore

"FORCE majeure" has become a new watchword, with energy supply chain players scrambling to weigh their legal options as Chinese buyers get leery of prior purchase commitments, in the fallout from Covid-19.

Weaker demand for products like oil and liquefied natural gas (LNG) has prompted some buyers to try to back out of what they had planned to purchase under long-term, fixed-volume contracts. China National Offshore Oil Corp declared force majeure on LNG deliveries from multiple suppliers, Reuters reported last month.

Reed Smith partner Dan Perera explained that, under some circumstances, commodities buyers could tur…