In ADM Industries Centers Ltd v Inerco Trade SA [2026] EWHC 1873 (Comm), the English Commercial Court provided important guidance on the meaning of the term “unforeseeable” in a force majeure clause, holding that the term required the probability of the relevant event to be “negligible”; that is, so small that it could, in commercial terms, be disregarded.
As noted in our alert earlier this year,1 the conflict in the Middle East over the last 8 months has brought significant disruption to key trade routes and site operations across the region. Force majeure clauses remain at the forefront of commercial strategy for parties trading in, and through, the region.
The decision in ADM Industries Centers Ltd v Inerco Trade SA [2026] EWHC 1873 (Comm) is of particular relevance to parties operating in that context who may be negotiating or seeking to invoke force majeure clauses under English law.
Background
Inerco Trade SA (the “Sellers”) agreed to sell Ukrainian corn to ADM Industries Centers Ltd (the “Buyers”), scheduled for shipment between 15 April and 15 May 2023. The contract incorporated Grain and Feed Trade Association (GAFTA) Form 48, including its force majeure clause dealing with “Prevention of Shipment”, and was governed by English law.
At the time, vessels entering the Black Sea to load grain were subject to inspection under the Black Sea Grain Initiative. The Sellers’ nominated vessel was awaiting inspection when, on 7 May 2023, Russian inspectors stopped handling inbound non-Russian vessels. On 16 May 2023, the Sellers notified the Buyers that they were invoking the force majeure clause. The Buyers rejected that notice. The Sellers treated the Buyers’ rejection as a renunciation of the contract, accepted that renunciation, and resold the cargo.
Procedural history
A GAFTA first-tier tribunal found in favour of the Buyers, holding that the Sellers had not established a force majeure event. On appeal, the GAFTA Board of Appeal reversed that decision, holding that the Sellers had validly invoked force majeure and awarding the Sellers damages and costs. The Buyers appealed to the High Court under section 69 of the Arbitration Act 1996 on points of law.
Key legal issue: the meaning of “unforeseeable”
Clause 20 of GAFTA Form 48 (Prevention of Shipment) defined, in the version in force at the relevant time, an “Event of Force Majeure” to include, at sub-paragraph (k):
“unforeseeable and unavoidable impediments to transportation or navigation”
The Buyers argued that the threshold for foreseeability was very low, namely any “real risk” that was not “far-fetched”, even if extremely unlikely, relying on the Privy Council’s approach in Overseas Tankship (UK) Ltd v The Miller Steamship Co Pty Ltd (The Wagon Mound) (No 2) [1967] AC 617 (PC). The Buyers argued that the GAFTA Board of Appeal had departed from the correct interpretation.
Court’s conclusion
The Court rejected the Buyers’ argument. It held that words such as “foreseeable” and “unforeseeable” described a spectrum, or degree, and took their precise meaning from context. The Wagon Mound threshold was developed in the context of tort liability. That context was different to the one concerning force majeure under a sale contract.
The Court explained that the other events listed in Clause 20, such as blockades, hostilities, acts of terrorism, strikes and riots were “rather rare and unpredictable events” but not events that “nobody would ever imagine could happen”. To construe “unforeseeable” in that sense would make sub-paragraph (k) of the force majeure clause “stand out starkly from all or most of the other events with which it jostles shoulders”.
It also noted that “unforeseeable” was linked in the clause to “unavoidable”, each colouring the other, so that the provision should be read as applying to impediments “so unlikely that nobody would expect the sellers to guard against them”.
On that basis, the Court held that an event was “unforeseeable” for the purposes of Clause 20 “if it is one whose probability appears, when the contract is concluded, to be so remotely likely to occur and affect its performance that it can be described as ‘negligible’”. The Court took this to mean “so small that in commercial terms it could be disregarded”. The Court declined to endorse the Sellers’ suggestion that mere unlikelihood would suffice since “there are things that are unlikely but whose probability is more than negligible”. On this issue, the GAFTA Board of Appeal had, therefore, made no error of law. However, the Court separately held that the Board had erred in law in finding that the Clause 20 notice requirement was not a condition precedent to reliance on the force majeure clause and remitted the award to the Board to determine whether the Sellers’ notice had in fact been given in time.
Conclusion
While the court’s finding ultimately depended on the interpretation of the contract in question, it offers useful guidance on how, under English law, “unforeseeable” might be construed where the term is left undefined, including in its context and for the purpose which it serves in that context.
As the term “unforeseeable”, like with other words that describe a spectrum (e.g., improbable, unlikely), necessarily calls for an evaluative, fact-sensitive judgment, parties who want greater certainty may consider at the contracting stage whether to expressly define or otherwise set out what is meant by unforeseeability rather than leaving the term to be construed contextually.
By way of example, in the NEC4 Engineering and Construction Contract, the provisions dealing with force majeure require the event to be one which “an experienced contractor would have judged at the Contract Date to have such a small chance of occurring that it would have been unreasonable to have allowed for it”. The FIDIC Red Book 1999, on the other hand, requires the event or circumstances to be “exceptional” and, among other things, one “which the affected Party could not reasonably have provided against before entering into the Contract” (as considered further in this client alert).2
1 When the unexpected strikes: Force Majeure under the 1999 FIDIC Red Book
2 When the unexpected strikes: Force Majeure under the 1999 FIDIC Red Book
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