UK Supreme Court · [2024] UKSC 18
The UK Supreme Court held that a reasonable-endeavours obligation in a force majeure clause did not require a party to accept payment in a...
Plain-English explainers, not legal advice. Use the linked official source for section-level detail, and get advice for your situation.
Get legal helpQuick read
Use this to check
Practical read
Useful next steps
MUR had agreed to carry monthly shipments of bauxite from Guinea to Ukraine. RTI had agreed to pay freight in US dollars. The contract included a force majeure clause and said the affected party had to use reasonable endeavours to overcome the event.
US sanctions were imposed on RTI's parent company in April 2018. The parties later agreed that banks were highly likely to delay RTI's dollar payments. MUR served a force majeure notice and suspended shipments.
| Decision-maker | Result |
|---|---|
| Arbitral tribunal | MUR should have accepted euros because the workaround avoided the problem without detriment. |
| High Court | Reasonable endeavours did not require acceptance of non-contractual payment. |
| Court of Appeal majority | RTI's offer overcame the event because it achieved the same result without detriment. |
| Supreme Court | MUR could insist on contractual performance and rely on force majeure. |
The Supreme Court favoured a clear rule. Contractual performance means performance according to the agreed terms. A reasonable-endeavours proviso ordinarily asks what can be done to achieve that performance, not whether a different performance would be commercially acceptable.
The judgment protects contractual certainty and the freedom not to accept a new bargain. A right to payment in a chosen currency can carry credit, banking, accounting and operational value beyond the immediate conversion cost.
The Court did not say that parties can ignore mitigation. MUR still had to show the force majeure event caused the failure and could not be avoided by reasonable steps that achieved the agreed performance.
What the court focused on
Define the event
Cover the risks that matter to the deal, including sanctions, banking restrictions and supply interruption where appropriate.
Define acceptable substitutes
State whether alternative currency, delivery locations, suppliers or methods can satisfy the mitigation obligation.
Allocate extra cost
Say who pays conversion, transport, compliance and implementation costs for an approved workaround.
Set the notice process
Require prompt notice, evidence of impact, mitigation updates and a clear route back to ordinary performance.
No. In this case the obligation did not require MUR to accept payment in euros when the contract required US dollars. Different wording can produce a different result.
Yes, if it says so clearly. Parties can define approved currencies, substitute delivery methods, change-control processes or temporary workarounds.
No. The Court treated the issue as one of general importance to force majeure and reasonable-endeavours clauses in commercial contracts.
Force majeure and post-employment restraint cases added
New explainers cover alternative performance under a force majeure clause and severance of an overbroad non-compete.