Force majeure and the possible consequences for F1 in Bahrain

21/02/2011

As we await news as to whether the Bahrain Grand Prix will go ahead as planned, a leading motorsport lawyer looks at the situation.

"Obviously, the safety of participants and spectators has to come first," says Charles Braithwaite, a partner with leading motorsport law firm Collyer Bristow. "However, the recent situation in Bahrain and the cancellation of GP2's Asian second round throws open an interesting discussion about the use of force majeure in sporting event contracts.

"A force majeure clause is included in most commercial contracts in one form or another," he continues. "The clause essentially frees a party from liability or obligation when an extraordinary event or circumstance beyond their control prevents performance of the contract - often taken to mean natural disaster or war but, depending how the clause is drafted, potentially also covering things such as infrastructure failures, government sanctions, riots and industrial disputes. The clause usually gives the parties a right to terminate the contract should a force majeure event occur or should it continue for a certain period of time.

"So, GP2's Asian second round has been cancelled under force majeure because no one could have foreseen, at the time of signing contracts, that civil unrest would make it unsafe to host the event. With the F1 season set to open in Bahrain in just a couple of weeks, a number of people may be looking at the force majeure clause in their contracts to see whether it covers their interests. The race organisers will be looking to see whether they can invoke the clause to avoid liability should they need to cancel the race. Participants will be looking to see whether they can invoke the clause to avoid liability should they decide it is too risky to attend or participate.

"It will not be an easy decision," he admits. "Teams have already spent money on shipping equipment to Bahrain, sponsors have signed contracts on the back of the season timetable and drivers are expecting to undertake a certain number of races over the coming months.

"With a swathe of civil unrest currently sweeping northern Africa and the Middle East, it will be interesting to see whether the force majeure clause is rewritten for future years," Braithwaite concludes. "While the situation in Bahrain could not have been foreseen when the original F1 contracts were signed, it may be that future contracts have to take into account more closely the civil and political situation in the country in which the event is being hosted."