The coronavirus has a huge impact on trade between international parties. Closure of production facilities, logistical restrictions and unavailability of staff can make it difficult to fulfil your contractual supply obligations in time. You may then invoke the force majeure clause in your contract. Depending on the definition of force majeure, the coronavirus may or may not be considered a circumstance of force majeure. Contracts under Russian law almost standard include a force majeure clause. Dutch law contracts not always.
But even if you have no force majeure provision in your supply contract, there can be a way out. Contractual non-performance (e.g. non-delivery) is not always attributable to the debtor. A non-performance cannot be attributed to the debtor if he is not to blame for it nor accountable for it by virtue of law, a juridical act or generally accepted principles (common opinion) (Article 6:75 Dutch Civil Code). In principle, performance of a contractual obligation cannot be required from a party that is subject to circumstances of force majeure. Nor can compensation be claimed.
It is however required that the circumstances of force majeure are so serious that contractual performance is considered impossible for the non-performing party. This means that performance is absolutely / physically impossible, or that performance is so burdensome that it cannot reasonably be demanded from the non-performing party. The debtor will have to demonstrate this by appealing to all circumstances of the case. If the other party disagrees with this, the debtor will have to apply for a decision of an arbitration institution or court.
In Russia, too, the burden of proof lies with the debtor *. The Russian government has the right to recognize special circumstances as force majeure for state transactions and certain currency transactions**, but has not done this so far for the COVID-19 virus.
Would you like to know more about the obligations of a debtor and force majeure under Russian law? We can help you obtain a certificate from the Chamber of Commerce to proof that you are not liable for non-performance of obligations. This can save you a lot of money for damages and (in Russia commonly used) fines for non-compliance.
You may refer to the RVO website for other information (in Dutch) https://www.nederlandwereldwijd.nl/landen/rusland/reizen/reisadvies .
* Paragraph 5 of the Decision of the Plenum of the Supreme Council of the Russian Federation dated 24 March 2016, Nr. 7.
** Art. 111 of the Federal law of 5 April 2015 Nr. 44-FZ “On the contract system in the area of purchases of goods, works and services for state and municipal needs.
