Lawyer Li Xuwei | The Force Majeure System under FIDIC Contract Conditions

Notwithstanding any other provision of this Clause, if any event or circumstance outside the control of the Parties (including, but not limited to, Force Majeure) arises which makes it impossible or unlawful for either or both Parties to fulfil its or their contractual obligations or which, under the law governing the Contract, entitles the Parties to be released from further performance of the Contract, then upon notice by either Party to the other Party of such event or circumstance: (a) the Parties shall be discharged from further performance, without prejudice to the rights of either Party in respect of any previous breach of the Contract, and (b) the sum payable by the Employer to the Contractor shall be the same as would have been payable under Sub-Clause 19.6 [Optional Termination, Payment and Release] if the Contract had been terminated under Sub-Clause 19.6. Above, I have quoted verbatim Clause 19 (hereinafter “Clause 19”) of the 1999 FIDIC Silver Book (EPC/Turnkey Contract). One purpose is to provide readers with a complete reference; however, the true intent is to highlight that, in international engineering contracts—especially complex EPC/Turnkey contracts or similar arrangements—the force majeure clause is typically extensive and highly intricate. Under EPC/Turnkey contracts or analogous agreements, force majeure remains one of the few risk-allocation provisions where the Employer retains responsibility (particularly from the perspective of Chinese contractors). Thus, in volatile regions such as the Middle East, force majeure issues are invariably extremely complex professional matters (and cannot even be reduced merely to “legal issues”). They are certainly not as simple or straightforward as many current market articles suggest—e.g., “promptly issue a force majeure notice and/or claim notice.” In my personal view and professional advice: do not take things for granted, jump to conclusions, offer recommendations, or make commercial decisions blindly.

Clarifying the Force Majeure Rules Before and After the Implementation of the Civil Code

【Issue One】 Should the legal effect of Party B’s unilateral, email-based demand—imposing an indefinite delay in performance of the disputed contract—be upheld? 【Legal Analysis】 In the cross-border goods trade contract dispute I handled, the first step was to characterize Party B’s statements contained in its email. These were determined to constitute an expression of intent to indefinitely postpone performance—not an expression of intent to terminate the contract. Accordingly, Party B did not invoke the statutory right to terminate the contract under Article 94 of the former Contract Law (“A party may terminate the contract under any of the following circumstances: (i) where, due to force majeure, the contractual purpose cannot be achieved…”), but rather sought to exercise the statutory right to modify the contract based on the doctrine of change of circumstances, pursuant to Article 26 of the Supreme People’s Court’s Interpretation (II) of the Contract Law (“Where, after formation of a contract, objective circumstances undergo major changes unforeseeable at the time of contracting—changes neither caused by force majeure nor constituting ordinary business risks—and continued performance would render the contract manifestly unfair to one party or frustrate its purpose, the affected party may petition the people’s court to modify or terminate the contract; the court shall determine whether to modify or terminate the contract based on the principle of fairness and the specific facts of the case.”) However, Article 26 of the Interpretation (II) explicitly requires that the major change must be “not caused by force majeure.” It does not address whether parties may invoke the statutory right to modify the contract when such major changes *are* caused by force majeure. Indeed, prior to the implementation of the Civil Code, China’s contract-related laws had not clarified the relationship between the force majeure doctrine and the doctrine of change of circumstances. This ambiguity directly prevented contracting parties from seeking legal remedies through the statutory right to modify contracts when major changes arose from force majeure. With the entry into force of the Civil Code, Article 533 expressly removes the prerequisite qualifier “not caused by force majeure” from the definition of major change: “After a contract is formed, if a material alteration occurs in the foundational conditions of the contract—unforeseeable at the time of contracting and not attributable to ordinary business risk—such that continued performance would render the contract manifestly unfair to one party, the adversely affected party may renegotiate with the other party; if no agreement is reached within a reasonable period, the party may petition a people’s court or arbitral institution to modify or terminate the contract. The court or arbitral institution shall decide whether to modify or terminate the contract based on fairness and the specific circumstances of the case.” Consequently, parties may now invoke the statutory right to modify or terminate the contract even where the major change results from force majeure. Moreover, pursuant to Article 2 of the Supreme People’s Court’s Provisions on the Application of the Civil Code of the People’s Republic of China with Respect to the Effective Date of the Civil Code (“For civil disputes arising from legal facts occurring before the entry into force of the Civil Code, where the then-applicable laws or judicial interpretations contain relevant provisions, those laws or interpretations shall apply—except where application of the Civil Code would better protect the lawful rights and interests of civil subjects, better maintain social and economic order, or better promote socialist core values.”), applying Article 533 of the Civil Code—rather than Article 26 of the Interpretation (II)—to issues involving change of circumstances clearly better protects the lawful rights and interests of parties, better maintains social and economic order, and better promotes socialist core values. Therefore, the doctrine of change of circumstances set forth in Article 533 of the Civil Code shall apply.

Kinder Morgan Lifts Force Majeure on US-Mexico Gas Pipeline

23 hours ago

Kinder Morgan Inc. resumed natural gas shipments to Mexico on its Tennessee Gas Pipeline following repairs that caused a prior force majeure. This resolves supply anxieties for Mexico, which sources roughly 75% of its gas from the US.

bloomberg

2026-10-08

Kinder Morgan Lifts Force Majeure on US-Mexico Gas Pipeline

Kinder Morgan Lifts Force Majeure on US-Mexico Gas Pipeline

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