Acts of terrorists not acts of God: High Court

When the contract says the principal shall render to Contractor and its personnel all feasible assistance and protection in cases of natural disasters, civil disturbances or epidemics, riots, strikes, war, insurgency, threat from militants but also contains a force majeure clause, the contractor can pin down the principal for compensation if he was prevented from working in view of terrorists threats. The principal cannot extricate himself from the liability by invoking the force majeure clause. The Delhi High Court in Oil & Natural Gas Corporation Ltd. V. Amtek Geophysical Pvt. Ltd therefore had no hesitation in upholding the arbitral award pursuant to which the contractor was held entitled to standby charges for the days it could not work due to terrorist threats in Assam.

The two clauses — force majeure and the one guaranteeing assistance and protection — were somewhat at odds with each other because the force majeure clause talked of acts of God, war, civil riots, fire, directly affecting the performance of the contract, flood and acts and regulations of respective Government. Both the arbitrator and the Court agreed with the Respondent that the petitioner could not take shelter behind the force majeure clause particularly the reference therein to civil riots because it had specifically agreed to give protection against threats from militants which was not the same as civil riots.