TSMP Law Corporate dispute resolution partner Kelvin Koh commented in a Business Times story published on 2 March 2020 on force majeure, as energy supply chain players scramble to weigh their legal options as Chinese buyers get leery of prior purchase commitments, in the fallout from Covid-19.
Acting on behalf of his client, Hontop Energy (Singapore), a trading unit of China Wanda that recently went into receivership, Kelvin said that it halted its trading activities in late January on the back of “muted demand and an industrywide liquidity crunch”.
Hontop supplies crude oil to a refinery in Shandong province that is operated by a related company, Tianhong Chemicals. But Kelvin said that the epidemic “has heavily impacted Hontop’s China-centric oil trading business”, as the strict measures taken to contain the outbreak affected logistics and hurt demand for oil products. Tianhong expects to resume its refinery operations in early March.