Chinese shipyards are likely to be forced to issue more warnings to shipowners that they will not be able to deliver new ships when planned due to the impact of the coronavirus crisis, a leading German shipping lawyer has warned.

Stefan Rindfleisch said he had seen a proliferation of "force majeure" contract clauses invoked in relation to the Covid-19 outbreak.

“We have seen many force majeure moves, and I am sure we will see more of it,” the Ehlermann Rindfleisch Gadow partner said.

“In the last two weeks, I’ve seen more force majeure clauses than in the last 20 years,” he told the opening of the Marine Money conference in Hamburg.

China slowdown

China’s clampdown on travel, in an attempt to slow the spread of coronavirus, has restricted yards from gearing back up after the New Year slowdown.

Some migrant workers at yards on the coast have been slow to return from their homes inland, although the Chinese authorities are now trying to accelerate the return to work in essential industries.

Yards involved in newbuildings and those doing retrofits for equipment such as scrubbers have invoked force majeure because of their inability to hit scheduled delivery slots.

Force majeure clauses are present in most contracts but are only invoked in rare occasions under exceptional circumstances outside the parties’ control.

Coronavirus now looks likely to have greater impact than the SARS epidemic in the early 2000s and ebola in Africa in recent years, said Reed Smith partner, Jeb Clulow.

But he cautioned that just because force majeure notices were being issued it did not mean they would have automatic effect.

"People have been sending force majeure notices, but it doesn't mean they do anything," he told the conference.

"The event and the manner in which you act still have to comply with the contract," he said.

Attempts to use the more severe English law term 'frustration' to get out of contractual commitments are likely to end in failure, since the threshold of disruption required is far higher than being seen at present, Clulow added.

Over the past day, countries including South Korea, Australia and Taiwan have ramped up preparations for the Covid-19 outbreak becoming a pandemic and the number of infections outside China exceeded those inside for the first time.

Marine Money Hamburg went ahead as planned, although keynote speaker Thomas Strobel, the senior economist from Italy's UniCredit Bank was unable to attend.

Italy has Europe's largest outbreak of coronavirus with over 400 cases and 12 deaths so far.