On 30 January 2020, the World Health Organization declared the outbreak of the novel coronavirus (2019-nCoV) (the Virus) to be a Public Health Emergency of International Concern. It seems clear that the Virus is also having an impact on economic activities not only in China, but also in the 23[1] countries outside of China where it has been recorded at the time of writing.
The implications for shipowners and charterers could be substantial if there is no mechanism to deal with potential issues arising out of the spread of the Virus. Owners and charterers alike will need to consider, inter alia, whether a port will be deemed safe, validity of notices of readiness if tendered before free pratique is obtained, any implications of quarantine restrictions and delays, the effect of clauses such as force majeure or epidemics clauses and whether the doctrine of frustration could be invoked.
To read more about the ways in which charterparties are likely to be affected by the Virus’ impact on the economic activity, please see our client alert here.
If you have any questions, please contact one of the authors or your usual Reed Smith contact.
[1] World Health Organization – Novel Coronavirus (2019-nCoV) situation reports