The management of international commercial contracts at the time of coronavirus. Please discuss the hypothesis of force majeure and unforeseen change of circumstances in relation to the Pandemia and their differences
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Introduction 3
Part 1 The management of international commercial contracts at the time of coronavirus. 4
Conclusion 14
Bibliography 16
,It is very important to take into account the impossibility of using force majeure (special or other similar) circumstances by default - if the agreement does not contain relevant provisions that relieve the parties from liability for failure to fulfil under certain conditions, it will not be possible to invoke force majeure circumstances. That is why in contracts subject to English law, it is very important to detail the provisions on force majeure. The more specifically indicated or described force majeure special circumstance, the better. For example, in the case of impossibility of execution due to an epidemic or pandemic of a dangerous disease, a reference to act of God (natural occurrence) may be insufficient, since basically the wording of act of God refers only to natural anomalies, but not to the epidemiological situation and, moreover,Perhaps, the maritime industry is traditionally the most familiar to the influence of epidemics / pandemics and related prohibitive or restrictive measures. The history of contractual protection in the maritime business, primarily the interests of the shipowner, goes back to the Middle Ages, when plague and other dangerous diseases raged in Europe, the Middle East and North Africa. In many ways, such protection is based on the old principles of English law. For example, in the International Convention on the Unification of Certain Bill of Lading Rules (The Hague-Visby Rules), quarantine restrictions are explicitly indicated as events that relieve the carrier of liability. In almost any contract of carriage by sea, the carrier is exempted from liability to the charterer if non-performance or delayed performance was caused by epidemics or quarantine measures.Moreover, back in 2015, as a reaction to the outbreak of Ebola and the outbreak of SARS ten years earlier, BIMCO developed a separate clause on infectious or contagious diseases. The disclaimer is a fairly detailed and well-structured text with definitions, covering approximately 1.5 pages. The reservation was accepted in two different editions - for scheduled charters and time charters.Finally, a party that refers to force majeure or another special circumstance specified in the contract must successfully pass the so-called but for test (test if "not"). This is a test to verify the cause-and-effect relationship between an extraordinary unforeseen circumstance referred to by a party and a non-performance event. In short, it comes down to the answer to the question: if not for this fact, were the obligations fulfilled by the party? With regard to the topic of our article, this question could sound, for example, like this: if quarantine measures had not been introduced, would the goods be delivered (delivered within the time period specified in the contract)?Often force majeure or other special circumstances allow a party to only suspend the performance of an obligation for the period of their validity, but do not completely terminate such an obligation. Therefore, for a party affected by force majeure, it is important to fully comply with the procedure for notifying the other party of the occurrence of such circumstances. In case of violation of the notification procedure, the party affected by the circumstances of force majeure may be recognized as not having the right to refer to them, and accordingly the protective mechanism of the concept of force majeure may not work.Unattainability of contract objectiveThe concept of force majeure or exceptional circumstances should not be confused with the doctrine of futility / unattainability of the purpose of the contract (frustration). This doctrine has a long history. It is aimed at determining the objective possibility of achieving the goal of the contract, in the form in which the parties saw it initially. The simplest example of the futility / unattainability of the purpose of the contract is the irretrievable loss of property with which the contract is directly related (for example, the death of a chartered vessel) for reasons for which the parties cannot objectively be responsible.It cannot be ruled out that in certain circumstances associated with an unfavourable epidemiological situation, such actions as, for example, closing a supplier’s enterprise or placing a quarantine hospital on its territory by order of the authorities, may become the basis for terminating the contract due to its futility, especially if the supplier doesn’t an alternative opportunity to fulfil the obligation (for example, the supplier has no other manufacturer).An important difference between the concept of futility of an agreement and force majeure (special circumstances) is that futility "looks to the future" and its purpose is to terminate the agreement, but not to exclude liability for past failure.Finally, in the context of international treaties, it also makes sense to mention the third concept - hardship. A good example of the formulation of the difficulty and comments on it are the Principles of international commercial agreements developed by UNIDROIT (hereinafter referred to as the Unidroit Principles). They can be applied to concluded contracts if the parties to the agreement agreed to apply them in whole or in part, or if the text of the contract contains some formulations or concepts of the Unidroit Principles, or if the arbitral tribunal considered that they should or may apply to it.ConclusionThe similarity between difficulty and force majeure (force majeure (special circumstances) is obvious. In particular, there is a temporary criterion (the occurrence of events after the conclusion of the contract), an objective impossibility to take them into account when concluding and to control them. But there are several significant differences.Firstly, the parties have great freedom in determining what can and cannot be a difficulty for each of them.Secondly, the party that refers to the difficulty can only ask the other party to revise the contract, but cannot suspend the execution, and, accordingly, is not exempted from liability for unfulfilled.Thirdly, the main sign of difficulty is the overall economic effect - an imbalance in the contract (changes in the balance of contractual obligations). Accordingly, a reference to difficulty cannot be applied only when performance is difficult, but not impossible. In case of impossibility, the provisions on force majeure (special circumstances) should obviously apply.In at least one difficulty is similar to the futility of the contract. Like the futility of the contract, the difficulty "looks to the future" and its purpose is to determine the possibility of changing the contract, but not to exclude liability for past failure.Without delving into the circumstances of the case and without analysing the concluded agreement, it is impossible to determine the legal remedies available to the relevant party to the agreement in conditions where the performance in the past or in the future is affected, or the adverse epidemiological situation in a country or the restrictive measures introduced in it can affect .When considering the possibility of legal protection and choosing the best tools, it is advisable to use the help of experienced lawyers and it is necessary to take into account a number of important factors. The most important of them is the law chosen by the parties to regulate relations between them. In addition, it is necessary to carefully analyse the degree of influence of the epidemic / pandemic or its consequences on the parties and their fulfilment of the contract, the causal relationship between the epidemic / pandemic and non-fulfilment or possible non-fulfilment, the expected time of the negative impact of the disease or its consequences, the possibility of changing the execution or provision algorithm alternative execution, and, of course, the willingness of the parties to negotiations in good faith.BibliographyDatabase of the complex Consultant plus, [Electronic resource], access mode: http://www.consultant.ru, circulation date: 05/14/2020
1. Database of the complex Consultant plus, [Electronic resource], access mode: http://www.consultant.ru, circulation date: 05/14/2020