3
He 50032/07
PP F C O
GRPS 510
CYPHER/CAT A
FM HONG KONG Ø71045Z
CONFIDENTIAL
RECEIVED IN
REGISTRY NO. 51
-7 FÉ81974.
JORITY
COPY
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TO PRIORITY F C O TELNO 174 OF 7TH FEBRUARY, 1974.
MY 2ND 1.P.T.
aubustion
дек
of 16
FOLLOWING IS EXTRACT FROM DRAFT RECORD OF MEETING ON
'FORCE MAJEURE' ON 5TH FEBRUARY:-
چے
12
MR NEWBIGGING SAID THAT THE CONSORTIUM ACCEPTED THE STEERING
GROUP'S VIEW THAT ''UNFORESEEN CIRCUMSTANCES'' AND ''COST ESCALATIONS'' WERE NOT WITHIN THE AMBIT OF FORCE MAJEURE'' AND
GAVE AN ASSURANCE THAT THE CONSORTIUM HAD NO INTENTION OF REVISING
THE CEILING PRICE SHOULD SUCH FACTORS ARISE. HOWEVER, THE CONSORTIUM'S CONCERN WAS THAT IT SHOULD BE OFFERED SOME PROTECTION
IN THE EVENT OF POSSIBLE INTERNATIONAL DISASTERS WHICH COULD
AFFECT THEIR FULFILMENT OF THE CONTRACT OR ITS COMPLETION ON TIME. THE CONSORTIUM, THEREFORE, WAS KEEN TO ENSURE THAT, SHOULD AN INTERNATIONAL CRISIS DEVELOP, THE STEERING GROUP WOULD BE
PREPARED TO DISCUSS THE MATTER. THE CONSORTIUM FELT IT WOULD
BE PREFERABLE TO EXPLAIN THE POSITION RELATING TO ''FORCE MAJEURE''
ACROSS THE TABLE RATHER THAN ATTEMPT AN DEFINITION BEFOREHAND.
MR NEWBIGGING STRESSED THAT, IF THIS ''UNDERSTANDING'' WAS ACCEPTED BY BOTH PARTIES AND RECORDED IN THE MINUTES, IT WOULD BE SATISFACTORY, SINCE DETAILED DEFINITION OF THE ''FORCE MAJEURE**
CALUSE COULD THEN BE DEALT WITH DURING THE NEGOTIATION OF THE
CONTRACT. MR HADDON-CAVE FELT THAT THE ''FIDIC"' DEFINITION
OF 'FORCE MAJEURE'', WHICH WAS WWIDEELY ACCEPTED, COULD BE ADOPTED AS A STARTING POINT FOR DETAILED DISCUSSION ALTHOUGH,
BECAUSE OF THE MAGNITUDE OF THE PROJECT AND THE LONG PERIOD OF CONSTRUCTION, IT WAS CLEAR THAT THE "FIDIC" DEFINITION IN
ITSELF WOULD NOT SUFFICE. THE STEERING GROUP WAS PREPARED TO
INCLUDE A CLAUSE STIPULATING THAT THE TWO SIDES COULD CONSULT IN
THE EVENT OF THE OCCURRENCE OF A MAJOR INTERNATIONAL DISASTER
OR SOME SIMILAR CIRCUMSTANCE. THE GROUP ALSO AGREED THAT IT WOULD NOT BE WISE TO HOLD UP THE LEEETTER OF INTENT BECAUSE THE 'FORCE MAJEURE'* CLAUSE HAD TO BE RESOLVED: AND, FINALLY, THE STEERING GROUP HAD NO WISH WHATSOEVER TO BE UNFAIR TO THE CONSORTIUM IN THE DEFINITION OF FORCE MAJEURE**. MR HADDON-CAVE ADDED THAT THE MAIN PROBLEM WOULD APPEAR TO BE TO DISTINGUISH BETWEEN WHAT WERE ''DIFFICULTIES*' AND WHAT CONSTITUTED ''DISASTERS' E.G.
A STRIKE BY THE CONSORTIUM'S WORKMEN WAS CLEARLY NO REASON FOR CLAIMING 'FORCE MAJEURE'', WHEREAS A GENERAL STRIKE IN HONG KONG WAS ANOTHER MATTER. MR TANABE ENQUIRED IF, IN THE STEERING GROUP'S VIEW, ''DIFFICULTIES'' WOULD BE TO THE CONSORTIUM'S ACCOUNT BUT DISASTERS' WOULD BE TO THE CLIENT'S ACCOUNT. MR HADDON-CAVE CONFIRMED THAT THIS WAS THE CASE BUT RE-ITERATED THAT THE MAJOR PROBLEM LAY IN DEFINING PRECISELY WHAT CONSITITUTED ''DIFFICULTIES'' AND WHAT **DISASTERS''
MACLEHOSE
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