Interpretation Of Force Majeure Clause In Commercial Contract Under Epidemic Situation

On the evening of April 10th Beijing time, the International Chamber of Commerce organized a free online lecture entitled "force majeure clauses in commercial contracts under the epidemic situation", attracting nearly 2000 trade practitioners from all over the world. To help trade practitioners better understand, negotiate and invoke force majeure clauses, the Secretariat of the China National Committee of the International Chamber of Commerce has organized more than 240 domestic trade practitioners, academics, lawyers, etc. to participate in lectures and participate in online discussions.

This seminar is chaired by Angelika Zoder, an expert on International Contract Law of the Austria National Committee of the International Chamber of Commerce (ICC). The chairperson of Erc ICC ment Erdem and ICC arbitration and alternative dispute resolution Commission, South Asia director, Abhinav Bhushan, is chairperson.

Chairman Erdem introduced the major changes in force majeure and difficult situation clause 2020, which was recently released by ICC. Erdem chairman pointed out that the ICC has innovatively added a "force majeure clause" which is more convenient for small and medium enterprises, which covers the core issue of the force majeure clause.

Compared with "force majeure and difficult circumstances clause 2003", the terms of the 2020 edition were adjusted to make it simpler and easier to use. The scope of the presumption of force majeure events is simplified and expanded, and the new requirement that the party affected by the force majeure event shall notify the other party of the independent notice clause in time, and the contract can be terminated if the event of force majeure exceeds 120 days.

Erdem chairman specifically recommended that the parties to a commercial contract should take five steps under the current epidemic situation:

First, it is necessary to check whether a force majeure clause is stipulated in the commercial contract.

Second, if a force majeure clause is agreed, it should be judged according to this clause whether the epidemic is a force majeure event.

Third, if no force majeure clause is agreed, counsel should be consulted according to the applicable law to determine whether the epidemic is an event of force majeure.

Fourth, according to the force majeure clause or the applicable law in the contract, there is an epidemic in the country where it is located.

Fifth, do everything you can to reduce the loss and prepare for the refund.

Subsequently, Angelika Zoder analyzed whether the current epidemic situation constitutes an event of force majeure. Angelika Zoder pointed out that judging whether an event constitutes a force majeure event depends on circumstances. When the parties to a contract stipulate a force majeure clause in a commercial contract, they shall decide according to their agreement. In the absence of a force majeure clause, the parties shall decide on the relevant provisions of the applicable law of the commercial contract.

Angelika Zoder believes that some of the current trade is affected by the epidemic, and some trade is still proceeding smoothly under the epidemic. Therefore, whether the epidemic constitutes an event of force majeure should be determined according to the specific circumstances and can not be generalized.

Finally, the director of Bhushan introduced the relevant arguments to the force majeure clauses to the participants. Bhushan director thinks that the parties to a contract often make a dispute over whether a case is a force majeure event due to the fact that the terms of force majeure are not specified. At this time, the contract should be interpreted according to the applicable law and the basic principles of international law, including the seventy-ninth article of the United Nations Convention on Contracts for the international sale of goods.

In addition, the director Bhushan shared 3 arbitration cases relating to force majeure clauses heard by the ICC international arbitration court, and pointed out that arbitrators would judge whether they belonged to force majeure in the specific circumstances of the case.

During the free discussion session, the keynote speaker answered questions about the understanding and application of the force majeure clause. The participants said that through this online training, the identification of force majeure events and the use of force majeure clauses have been further understood.