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Thursday, 28 May 20
COVID-19: A FORCE MAJEURE EVENT? - KYPRIANOU
KNOWLEDGE TO ELEVATE
While seeing the unexpected COVID-19 outbreak expanding worldwide and the first cases being identified in Cyprus, the commercial sector does not remain unaffected. Emergency measures such as travel restrictions, citizens placed on quarantine and self-isolation are only some of the factors that started to impact parties to commercial transactions that render contract performance physically or commercially impossible. May a party invoke contractually agreed force majeure clauses or, the doctrine of frustration in an attempt to protect themselves from being unable to meet its contractual obligations?
Force Majeure
The concept of “force majeure” (meaning "superior force"), is used commonly in contracts as a clause that essentially releases both parties from liability or obligation when an unexpected event or circumstance beyond the control of the parties, prevents one or both parties from fulfilling their obligations under the contract.
Determining whether the Corona-virus outbreak constitutes a force majeure event, is a matter of construction and will depend on the specific wording and the scope of the clause.
It is the case that force majeure clauses often contain a list of events that qualify as force majeure events. For instance, terms such as “epidemic”, “pandemic”, or more generic terms such as “disease” and “illness” are often expressly listed as events of force majeure. In such cases, it will be easier to claim force majeure protection, as COVID-19 is likely to qualify as a force majeure event. Also, terms such as “acts of government” or “national or regional emergency” may be listed so as to cover emergency measures taken by the government such as travel bans or placing citizens in quarantine in case of this novel outbreak.
Additionally, under common law, a party seeking to invoke that its ability to perform the contract has been prevented by a force-majeure event, has the burden to prove certain elements. These are:
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that the event was unforeseeable;
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that it has taken all reasonable steps to avoid or mitigate the effects of the force majeure event; and
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that the event was beyond its control and thus impossible to overcome.
Most importantly, there must be a causal connection between the force majeure event that made it physically or legally impossible to perform the contractual obligations. With the COVID-19 case, the affected party has to show that due to the outbreak of Corona-virus and its resulting governmental measures, no alternative measures exist for performing its duties under the contract.
Frustration
In case the contract does not include any force majeure clause, the affected party may attempt to excuse its failure to perform its contractual obligations under the doctrine of frustration. Subject to Section 56(2) of the Contract Law Cap.149, as amended, “a contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful. As interpreted by Cyprus courts, section 56(2) is only applicable to an impossibility which destroys the foundation of the contract, which requires a high threshold for proof of frustration of a contractual undertaking.
Recommended actions
If you have executed a contract or are considering entering into new contract during this period, you should review the force majeure clauses carefully in order to understand the circumstances under which you can declare a force majeure and whether the Corona-virus outbreak and the resulting emergency measures may fall under its scope.
By Andria Kouloumi
Further, notification processes and deadlines should be also reviewed carefully, in order to ensure that your ability to claim force majeure protection is not precluded. Importantly, if you intend to enforce such force majeure clauses, you should consider your obligation to take all the reasonable measures to mitigate the effect of non-performance, otherwise your failure to perform your obligation may not be excused. If in doubt regarding how a force majeure provision applies and whether force majeure protection may cover you, it is recommended to seek legal advice prior to taking any action or sending notices.
Michael Kyprianou & Co LLC is ready to assist and advise you in relation to issues you may face, including by providing advice as to your options and requested objectives, enabling you to make an informed decision.
The content of this article is valid as at the date of its first publication. It is intended to provide a general guide to the subject matter and does not constitute legal advice. We recommend that you seek professional advice on your specific matter before acting on any information provided. For further information or advice, please contact Andria Kouloumi, Associate, at Andria.Kouloumi (at) kyprianou.com
If you believe an article violates your rights or the rights of others, please contact us.
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Friday, 05 January 24
BANGLADESH’S 2023 COAL-FIRED POWER OUTPUT TRIPLED, EASING SHORTAGES - REUTERS
Bangladesh nearly tripled its coal-fired power output in 2023, a Reuters analysis of government data showed, helping it tide over the worst power s ...
Tuesday, 02 January 24
COAL TRADE CONTINUES TO HEAD EAST - BALTIC EXCHANGE
The global coal trade, once concentrated in the Pacific and Atlantic basins, is undergoing a significant transformation, as highlighted in the Inte ...
Tuesday, 02 January 24
COAL CARGOES: AVOIDING EXPLOSION AND SELF-HEATING - GARD
KNOWLEDGE TO ELEVATE
Despite its contribution to greenhouse gas emissions, global coal consumption climbed to an all-time high in 2022 and is ...
Tuesday, 02 January 24
SINOPEC FORECASTS CHINA’S COAL CONSUMPTION TO PEAK AROUND 2025 - REUTERS
China Petrochemical Corp, or Sinopec, expects coal consumption to peak around 2025 at 4.37 billion metric tons, the state energy group said in an o ...
Thursday, 07 December 23
CHINA TO SET UP COAL PRODUCTION RESERVE TO STABILISE PRICES - REUTERS
China will establish a back-up coal production system by 2027 to stabilise prices and secure coal supply, the state planner said on Wednesday, even ...
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Showing 61 to 65 news of total 6871 |
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- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- OPG Power Generation Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Petron Corporation, Philippines
- London Commodity Brokers - England
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- Binh Thuan Hamico - Vietnam
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- Romanian Commodities Exchange
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- The University of Queensland
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Ministry of Mines - Canada
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- Orica Mining Services - Indonesia
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Borneo Indobara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- Edison Trading Spa - Italy
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Timah Investasi Mineral - Indoneisa
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Sakthi Sugars Limited - India
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Coal Council - USA
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Madhucon Powers Ltd - India
- Economic Council, Georgia
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- Larsen & Toubro Limited - India
- Makarim & Taira - Indonesia
- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- McConnell Dowell - Australia
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- Rio Tinto Coal - Australia
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