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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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Tuesday, 07 July 20
WHAT DOES THE PATHWAY TO A NET-ZERO ECONOMY LOOK LIKE FOR MINERS? - WOOD MACKENZIE
Wind, solar, electric vehicles, stationary storage and transmission are all central to achieving the Paris Agreement decarbonisation goals.
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Monday, 06 July 20
INDONESIAN COAL PRICE REFERENCE IN FREE FALL
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Monday, 06 July 20
SUPRAMAX: A 58,000-DWT FIXING DELIVERY VIETNAM TRIP VIA INDONESIA RE-DELIVERY WEST INDIA IN THE LOW $4,000S
Capesize
The Capesize market continues to go from strength to strength, as rates reach highs not seen since September last year. The rally is p ...
Thursday, 02 July 20
PRIVATE COAL MINING MAY SEE WEAK INVESTOR SENTIMENT: ICRA - LIVEMINT
The prospects of commercial coal mining in India may be dimmer than initially expected because of the expected shift in India’s energy mix fr ...
Wednesday, 01 July 20
THERMAL COAL OPTIONS TRADING LAUNCHED IN CHINA'S ZHENGZHOU - XINHUA
Thermal coal options started trading on the Zhengzhou Commodity Exchange (ZCE) in central China’s Henan Province Tuesday.
It i ...
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- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- The State Trading Corporation of India Ltd
- Deloitte Consulting - India
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Oldendorff Carriers - Singapore
- Leighton Contractors Pty Ltd - Australia
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- Mintek Dendrill Indonesia
- Central Java Power - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Romanian Commodities Exchange
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Central Electricity Authority - India
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Xindia Steels Limited - India
- VISA Power Limited - India
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- Krishnapatnam Port Company Ltd. - India
- Coal and Oil Company - UAE
- Sindya Power Generating Company Private Ltd
- Edison Trading Spa - Italy
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Wood Mackenzie - Singapore
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Coalindo Energy - Indonesia
- Australian Coal Association
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Dalmia Cement Bharat India
- Petron Corporation, Philippines
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Sojitz Corporation - Japan
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Mercator Lines Limited - India
- Bhatia International Limited - India
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Economic Council, Georgia
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- Pendopo Energi Batubara - Indonesia
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- White Energy Company Limited
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- Tata Chemicals Ltd - India
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- Barasentosa Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
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