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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, 02 February 24
DRY BULK MARKET: THE DOWNWARD REVISION IN THE GROWTH OF CAPESIZE TONNE DAYS IN JANUARY WITH THE BCI DROPPING - MARIA BERTZELETOU
In the last week of January, the dry freight market sustained weakness in the Capesize segment, while the number of ballasters in the Southeast (SE ...
Friday, 02 February 24
COAL INDIA ACHIEVES NEARLY 80% OF ITS FY24 PRODUCTION TARGET IN TEN MONTHS - CNBCTV18
For the month of January, the company’s production grew by 9.1% from the same period last year to 78.4 Million Tonnes (MT), from 71.9 MT last ...
Thursday, 01 February 24
CHINA'S WIND, SOLAR CAPACITY TO OVERTAKE COAL IN 2024 - INDUSTRY BODY, REUTERS REPORTED
China’s installed wind and solar capacity is expected to overtake coal for the first time this year, according to industry forecasts.
&nb ...
Thursday, 01 February 24
ANTI-DEDUCTION CLAUSES: CAN A CHARTERER WITHHOLD HIRE WITHOUT AN OWNER'S CONSENT? - SKULD
KNOWLEDGE TO ELEVATE
Summary
In The Anna Dorothea, the Court found that where a charterparty provides that no deduction from hire may be m ...
Thursday, 01 February 24
INDIA REBUILDS COAL STOCKS TO ENSURE ELECTRIC RELIABILITY - REUTERS
India’s electricity supply is much more comfortable at the start of 2024 than in either 2023 or 2022 as coal production has ramped up and the ...
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- Samtan Co., Ltd - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- Vedanta Resources Plc - India
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- Karaikal Port Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Central Electricity Authority - India
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- Grasim Industreis Ltd - India
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Altura Mining Limited, Indonesia
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- International Coal Ventures Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- Intertek Mineral Services - Indonesia
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Pendopo Energi Batubara - Indonesia
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- Formosa Plastics Group - Taiwan
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- Manunggal Multi Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Coalindo Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
- Kideco Jaya Agung - Indonesia
- Ind-Barath Power Infra Limited - India
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- Sojitz Corporation - Japan
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Sree Jayajothi Cements Limited - India
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Gujarat Sidhee Cement - India
- Carbofer General Trading SA - India
- GMR Energy Limited - India
- MS Steel International - UAE
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Bhatia International Limited - India
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- The State Trading Corporation of India Ltd
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- GVK Power & Infra Limited - India
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Marubeni Corporation - India
- Savvy Resources Ltd - HongKong
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Ministry of Transport, Egypt
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Planning Commission, India
- Minerals Council of Australia
- Australian Coal Association
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
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