BAHAMAS Law and Practice Contributed by: Richard Horton and Emma Van Wynen, Alexiou, Knowles & Co.
9. Implications of Non-Performance, IMO 2020, Trade Sanctions and International Conflict 9.1 Force Majeure and Frustration Non-performance of a shipping contract in The Baha - mas may be considered as force majeure, but only where the contract expressly includes a force majeure clause and the event qualifies, which will depend on the facts of each case and the precise wording of the clause. Typical force majeure events such as acts of God, labour strikes, war, pandemics and so forth may quali - fy; however, mere difficulty in performance, expense or delay will not automatically constitute force majeure. The party relying on force majeure bears the burden of proof to demonstrate that the event occurred, that it directly caused the non-performance, and that no reasonable steps could have been taken to avoid or mitigate its effects. Prompt notification to the other party is also usually required, and failure to provide timely notice may preclude reliance on the clause. A shipping contract will be considered frustrated only where performance is rendered objectively impossi - ble by an unforeseen, supervening event beyond the control of the parties, and where the risk of that event has not been contemplated by the contract. Bahamian courts will not find frustration where non-performance arises from foreseeable circumstances including self- induced difficulties or ordinary commercial hardship, which might include late delivery, slow loading or unloading, or non-arrival of a chartered vessel due to operational inefficiencies. Typical events that may give rise to frustration include the loss or total unavailability of a vessel, closure of a port by unforeseen government action or natural dis - aster, sudden regulatory or legal prohibition making a shipment illegal, etc. It is important to note, however, that standard contractual provisions will generally pre - clude a finding of frustration in The Bahamas. 9.2 Enforcement of the IMO 2020 Rule Limiting the Sulphur Content of Fuel Oil The Bahamas implements the IMO 2020 sulphur cap through its status as a state party to MARPOL
Annex VI, which regulates emissions from ships and applies to vessels of 400 gross tonnage and above on international voyages, as well as to any ship operat - ing in Bahamian territorial waters or calling at Baha - mian ports. The sulphur content of fuel oil must not exceed 0.50% m/m, except where a vessel uses an IMO‑approved equivalent compliance method (such as an exhaust gas cleaning system) or where a stricter limit applies within designated emission control areas (0.10% m/m). Compliance with these requirements in The Baha - mas is enforced by the BMA in its capacity as both flag state and port state authority, principally through port state control inspections and flag state oversight, including verification of bunker delivery notes, fuel sampling, record-keeping and certification. While the regulatory framework clearly empowers inspection, detention and sanction for non-compliance, there are no widely reported or publicly documented enforce - ment proceedings or sanctions in The Bahamas to date that are specifically attributable to breaches of the IMO 2020 sulphur content limitation. 9.3 Trade Sanctions The International Obligations (Economic and Ancil - lary Measures) Act, 1993 (as amended) (IOEAMA) provides for the imposition of economic sanctions and for taking ancillary measures to give effect to the international obligations of The Bahamas, such as UN international trade sanctions. The IOEAMA provides that, when the UN Security Council adopts a sanc - tions resolution, the text of that resolution (including annexes, schedules, amendments) has full force and effect as domestic law in The Bahamas from the date that the UN adopts it, without the need for separate enabling legislation for each resolution. As a result, UN-mandated sanctions are legally binding and enforceable in The Bahamas. Section 3A of the IOEAMA is regularly referenced in public notices issued by the Central Bank and the Securities Commission of The Bahamas as the legal basis for implementing updated UN sanctions lists and measures. The IOEAMA works alongside the Anti- Terrorism Act, 2018 and the Anti-Terrorism Regula - tions, 2019, which also provide legal authority for the automatic domestic implementation of UN Security
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