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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, 29 May 20
KOMIPO ON BEHALF FIVE KOREAN GENCOS INVITED COAL BIDS FOR 5,700 & 4999 NCV COAL FOR AUGUST 2020 LOADING
COALspot.com: South Korea’s Korea Midland Power Co.,Ltd (KOMIPO) on behalf five (5) Korean Gencos has Issued an International Tender for tota ...
Friday, 29 May 20
DRY BULK SHIPPING: NO QUICK RECOVERY FOR THE DRY BULK MARKET AS COVID-19 DIGS DEEPER
The outlook is poor for dry bulk, as the negative demand shock and overcapacity come together to send rates to multi-year lows, even a return to wo ...
Thursday, 28 May 20
OIL DEMAND RECOVERED BY 20% IN MAY AGAINST APRIL: RUSSIAN ENERGY MINISTER - TASS
Oil demand remains at a low level but the demand in May increased by 20% against April, Russian Energy Minister Alexander Novak said, cited by the ...
Thursday, 28 May 20
MARKET INSIGHT - INTERMODAL
Earlier in May, China’s top leaders convened for the annual National People's Congress, following over two months of delays due to the co ...
Wednesday, 27 May 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.94 PCT - XINHUA
China Taiyuan coal transaction price index stood at 125.03 points Monday, up 0.94 percent week on week.
The index, released by China ...
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- Timah Investasi Mineral - Indoneisa
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
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- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- Australian Coal Association
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- South Luzon Thermal Energy Corporation
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- Global Green Power PLC Corporation, Philippines
- Africa Commodities Group - South Africa
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
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- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
- India Bulls Power Limited - India
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- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Petron Corporation, Philippines
- Indogreen Group - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Gujarat Sidhee Cement - India
- Deloitte Consulting - India
- Interocean Group of Companies - India
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- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Wilmar Investment Holdings
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- SMC Global Power, Philippines
- London Commodity Brokers - England
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- LBH Netherlands Bv - Netherlands
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Indian Energy Exchange, India
- MS Steel International - UAE
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Electricity Authority, New Zealand
- Kepco SPC Power Corporation, Philippines
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- AsiaOL BioFuels Corp., Philippines
- Chamber of Mines of South Africa
- IHS Mccloskey Coal Group - USA
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Baramulti Group, Indonesia
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Marubeni Corporation - India
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Coalindo Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- ICICI Bank Limited - India
- Lanco Infratech Ltd - India
- Commonwealth Bank - Australia
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- Uttam Galva Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- The University of Queensland
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Borneo Indobara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Carbofer General Trading SA - India
- Vijayanagar Sugar Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- McConnell Dowell - Australia
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- Larsen & Toubro Limited - India
- White Energy Company Limited
- Aditya Birla Group - India
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- CIMB Investment Bank - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
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- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
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