THE COVID-19 PANDEMIC – AN IMPEDIMENT IN PERFORMANCE OF CONTRACTS
Mohammed Zaheeruddin
College of Law, United Arab Emirates University (UAEU), Al Ain, United Arab Emirates, P.O. Box No. 15551
DOI: https://doi.org/10.31410/Balkans.JETSS.2020.3.2.177-185
Mohammed Zaheeruddin
College of Law, United Arab Emirates University (UAEU), Al Ain, United Arab Emirates, P.O. Box No. 15551
DOI: https://doi.org/10.31410/Balkans.JETSS.2020.3.2.177-185
Balkans Journal of Emerging Trends in Social Sciences, (2020) , Vol 3, No 2
ISSN: 2620-164X
ISSN: 2620-164X
Abstract: The COVID-19 pandemic has created unprecedented situation all over the world, compelled the governments to declare lockdown, closing of businesses, industries, commercial activities, ban on certain imports and exports. Under these circumstances, an obligor may not be able to perform his contractual obligations, consequently may result in breach of contract. In case of claim of damages by the obligee for breach of contract, the obligor may seek exemption from damages under the law of impediment or force majeure. According to Article 79 of the UN Convention on Contracts for the International Sale of Goods 1980 (CISG), a party is not liable for damages due to non-performance, delay or defect in performance, if he can prove that the failure was due to an impediment beyond his control. The COVID-19 situations are beyond the control of the parties to the contract, must be considered as an impediment or force majeure and the non-performing party is entitled for exemption from damages under Article 79 of CISG.
Keywords: COVID-19, UN CISG, Impediment, Force majeure, Damages.
JEL Classification K12
REFERENCES
Christoph Brunner. (2008). Force Majeure and Hardship under General Contract Principles: Exemption
for Non-performance in International Arbitration, International Arbitration Law
Library, Vol. 18, Kluwer Law International, p. 246.
Christoph Brunner. (2019). Commentary on the UN Sales Law (CISG), Kluwer Law International,
pp. 560-591.
Christoph Brunner. (2019). Impediment excusing a party from damages, Commentary on the UN
Sales Law, Kluwer Law International, p. 584.
Ingeborg Schwenzer. (4th ed., 2016). Commentary on the UN Convention on the International Sale
of Goods (CISG), Oxford University Press, p. 1149.
Jennifer M. Bund (1998). Force Majeure Clause: Drafting advice for the CISG Practitioner, 17 J.L.
& Com. 381.
Larry A. DiMatteo. (2015). Contractual Excuse under the CISG: Impediment, Hardship, and the
Excuse Doctrines, 27 Pace Int’l L. Rev. 258.
Lisa M. Ryan. (1995). The convention on Contracts for the International Sale of Gods: Divergent
interpretations, 4 Tul. J. Int’l & Comp. L. 99.
Mark B. Baker, A Hard Rain’s A-Gonna Fall. (2004). Terrorism and Excused Contractual Performance
in a Post September 11th World, 17 Transnat’l Law 1.
Mercedeh Azeredo Da Silveira. (2014). Trade Sanctions and International Sales: An Inquiry into
international Arbitration and Commercial Litigation, Kluwer Law International, p.242.
Michael Bridge (2nd ed., 2017). The International Sale of Goods, Law and Practice, Oxford University
Press, p. 596.
Cases:
Bulgarian Chamber of Commerce and Industry (Coal case), Bulgaria, 24 April 1996 Arbitration
Case 56/1995, available at: http://cisgw3.law.pace.edu/cases/960424bu.html.
Caviar case, Hungary 10 December 1996, Budapest Arbitration Proceedings, CISG-database,
available at http://cisgw3.law.pace.edu/cases/961210h1.html.
CLOUT Case No. 104, ICC Arbitration, 1992, Court of Arbitration of the International Chamber
of Commerce, Case No. 7197, 1992, available at http://cisgw3.law.pace.edu/cases/927197i1.
html.
CLOUT case No.166, Germany 21 March 1996, Hamburg Arbitration proceeding (Chinese goods
case) available at: http://cisgw3.law.pace.edu/cases/960321g1.html.
CLOUT Case No. 596 Germany 2 February 2004, Germany 2 February 2004 Appellate Court
Zweibrücken (Milling equipment case), available at: http://cisgw3.law.pace.edu/cases/
040202g1.html.
Harriscom Svenska, AB v. Harris Corporation, 3 F ed 576 (1993).
Hungary 10 December 1996, Budapest Arbitration Proceedings, CISG-database, available at
http://cisgw3.law.pace.edu/cases/961210h1.html.
Malaysia Dairy Industries Pte. Ltd. v. Dairex Holland BV, Netherlands 2 October 1998 District
Court ‘s-Hertogenbosch, available at http://cisgw3.law.pace.edu/cases/981002n1.html.
PPG Industries, Inc. v. Shell Oil Company, 919 F. 2d. 17 (5th Cir. 1990).
Raw Materials, Inc. v. Manfred Forberich GmbH & Co., KG, 2004 U.S. Dist. Court [Illinois], July
6, 2004), available at http://cisgw3.law.pace.edu/cases/040706u1.html.
Saltwater isolation tank case, Switzerland 26 April 1995 Commercial Court Zürich, available at:
http://cisgw3.law.pace.edu/cases/950426s1.html.
Scafom International BV v. Lorraine Tubes S.A.S, Hof van Cassatie, Belgium, 19 June 2009.
Tradax Export SA v. Andre & Cie SA, [1976] 1 Lloyd’s Rep. 416.
Websites:
http://www.euro.who.int/en/health-topics/health-emergencies/coronavirus-covid-19/news/
news/2020/3/who-announces-covid-19-outbreak-a-pandemic.
https://www.ilo.org/wcmsp5/groups/public/dgreports/dcomm/documents/briefingnote/
wcms_743146.pdf, visited on 18 May 2020.
Keywords: COVID-19, UN CISG, Impediment, Force majeure, Damages.
JEL Classification K12
REFERENCES
Christoph Brunner. (2008). Force Majeure and Hardship under General Contract Principles: Exemption
for Non-performance in International Arbitration, International Arbitration Law
Library, Vol. 18, Kluwer Law International, p. 246.
Christoph Brunner. (2019). Commentary on the UN Sales Law (CISG), Kluwer Law International,
pp. 560-591.
Christoph Brunner. (2019). Impediment excusing a party from damages, Commentary on the UN
Sales Law, Kluwer Law International, p. 584.
Ingeborg Schwenzer. (4th ed., 2016). Commentary on the UN Convention on the International Sale
of Goods (CISG), Oxford University Press, p. 1149.
Jennifer M. Bund (1998). Force Majeure Clause: Drafting advice for the CISG Practitioner, 17 J.L.
& Com. 381.
Larry A. DiMatteo. (2015). Contractual Excuse under the CISG: Impediment, Hardship, and the
Excuse Doctrines, 27 Pace Int’l L. Rev. 258.
Lisa M. Ryan. (1995). The convention on Contracts for the International Sale of Gods: Divergent
interpretations, 4 Tul. J. Int’l & Comp. L. 99.
Mark B. Baker, A Hard Rain’s A-Gonna Fall. (2004). Terrorism and Excused Contractual Performance
in a Post September 11th World, 17 Transnat’l Law 1.
Mercedeh Azeredo Da Silveira. (2014). Trade Sanctions and International Sales: An Inquiry into
international Arbitration and Commercial Litigation, Kluwer Law International, p.242.
Michael Bridge (2nd ed., 2017). The International Sale of Goods, Law and Practice, Oxford University
Press, p. 596.
Cases:
Bulgarian Chamber of Commerce and Industry (Coal case), Bulgaria, 24 April 1996 Arbitration
Case 56/1995, available at: http://cisgw3.law.pace.edu/cases/960424bu.html.
Caviar case, Hungary 10 December 1996, Budapest Arbitration Proceedings, CISG-database,
available at http://cisgw3.law.pace.edu/cases/961210h1.html.
CLOUT Case No. 104, ICC Arbitration, 1992, Court of Arbitration of the International Chamber
of Commerce, Case No. 7197, 1992, available at http://cisgw3.law.pace.edu/cases/927197i1.
html.
CLOUT case No.166, Germany 21 March 1996, Hamburg Arbitration proceeding (Chinese goods
case) available at: http://cisgw3.law.pace.edu/cases/960321g1.html.
CLOUT Case No. 596 Germany 2 February 2004, Germany 2 February 2004 Appellate Court
Zweibrücken (Milling equipment case), available at: http://cisgw3.law.pace.edu/cases/
040202g1.html.
Harriscom Svenska, AB v. Harris Corporation, 3 F ed 576 (1993).
Hungary 10 December 1996, Budapest Arbitration Proceedings, CISG-database, available at
http://cisgw3.law.pace.edu/cases/961210h1.html.
Malaysia Dairy Industries Pte. Ltd. v. Dairex Holland BV, Netherlands 2 October 1998 District
Court ‘s-Hertogenbosch, available at http://cisgw3.law.pace.edu/cases/981002n1.html.
PPG Industries, Inc. v. Shell Oil Company, 919 F. 2d. 17 (5th Cir. 1990).
Raw Materials, Inc. v. Manfred Forberich GmbH & Co., KG, 2004 U.S. Dist. Court [Illinois], July
6, 2004), available at http://cisgw3.law.pace.edu/cases/040706u1.html.
Saltwater isolation tank case, Switzerland 26 April 1995 Commercial Court Zürich, available at:
http://cisgw3.law.pace.edu/cases/950426s1.html.
Scafom International BV v. Lorraine Tubes S.A.S, Hof van Cassatie, Belgium, 19 June 2009.
Tradax Export SA v. Andre & Cie SA, [1976] 1 Lloyd’s Rep. 416.
Websites:
http://www.euro.who.int/en/health-topics/health-emergencies/coronavirus-covid-19/news/
news/2020/3/who-announces-covid-19-outbreak-a-pandemic.
https://www.ilo.org/wcmsp5/groups/public/dgreports/dcomm/documents/briefingnote/
wcms_743146.pdf, visited on 18 May 2020.
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