Is it possible to rely on the COVID-19 pandemic to avoid liability for non-fulfilment of legal obligations?
It can happen that the disease itself as well as measures taken to prevent it ‒ such as quarantines, mass sick leave for employees & travel bans ‒ may impede contract fulfilment or frustrate it altogether.
To answer this question, it is first necessary to sort out a few other questions, like:
What law applies to relations between the parties?
What circumstances may relieve a party from liability under the applicable law? And under the agreement signed by the parties?
Do the regulations on force majeure stipulated in the agreement correspond with legislation?
What steps must a party take to rely on force-majeure provisions in the future?
As far as Belarussian law is concerned, in business relations force-majeure circumstances are often referred to as excusing fulfilment of an obligation without further liability.
Paragraph 3 of article 372 of the Civil Code of Belarus reads:
“Unless otherwise provided by law or agreement, a person involved in business activities that fails to fulfil their obligation in full or in part will be liable unless they prove that fulfilment of that obligation has been undermined by force majeure, i.e. extraordinary and unavoidable circumstances under the given conditions”.
As we can see, the terms ‘extraordinary’ and ‘unavoidable’ will be interpreted on a case-by-case basis.
Certain court practice has developed as to what can or cannot be regarded as force-majeure circumstances by Belarussian courts; however, pandemics and measures taken to control them have not been given scrutiny by courts so far.
It is also important to demonstrate precisely how the COVID-19 outbreak prevented or hindered fulfilment of a particular obligation. Here the standard of proof is expected to be quite high.
Hence, bnt Attorneys-in-CEE under the circumstances of COVID-19 pandemic stress the importance of keeping the paperwork related to how COVID-19 affects your business. Such paperwork might consist of: correspondence, internal company documents identifying and describing the unfavourable circumstances (e.g. illness of personnel crucial for performance of certain tasks) and so on. Companies should keep proper documentation on all circumstances related to the epidemic which relate to fulfilment of their contractual obligations and react promptly as the pandemic will go but the legal obligations will last.