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11 June 2020, Gateway House

Invoking Force Majeure amidst COVID-19

Ambika Khanna, Senior Researcher, International Law Studies Programme, Gateway House, in discussion with Bharat Bhise, CEO and Founder, Bravia Capital; Greg Falkof, Partner, Eversheds Sutherland; Rutvik Patel, Head - Legal & Corporate Affairs, TBEA Energy (India) Pvt. Ltd. on invoking Force Majeure amidst COVID-19.

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The discussion addressed the concerns and issues of invoking Force Majeure amidst the COVID-19 pandemic.

In this Webcast, which was recorded earlier this week (June 4), the speakers make five main points:

a) Before invoking force majeure in a pre-COVID-19 contract, it is necessary to understand the complete scope of the existing force majeure clause in a contract, and assess the impossibility of fulfilling contractual obligations due to such an event. For negotiating new contracts during COVID-19, foreseeing another such event should be a factor.

b) Some persons and businesses are misusing the force majeure clause to renegotiate commercial contracts for favorable outcomes or to be excused from an inability to perform.

c) Force majeure should continue to be negotiated as part of private contracts, which are customised to the needs of the commercial entities in a contract. An overarching remedy in law is more prone to misuse.

d) As COVID-19 has impacted stakeholders across industries, mutual negotiation and resolution of disputes on force majeure is the recommended way forward. This will ensure continuity in commercial relationships and supply chains.

e) An all-encompassing, uniform, global or regional solution on force majeure is not recommended due to the involvement of multiple stakeholders and the varied impact on each of them.