Quarantine for obligations
By order of the Government from 16.03.2020 No. 635-R was introduced temporary restrictions on the entry of foreign citizens for the period from 18.03.2020 on 01.05.2020 G. was Also suspended acceptance of documents, registration and issuance of invitations for entry to training and employment, work permits and all categories of visas except diplomatic, service, ordinary business visas to the persons referred to in paragraph 2 of the said order.
In addition, 19.03.2020 g. in all regions there is a ban on holding any sports, entertainment, public and other events. This kind of limitation was related to any events in excess of a certain threshold by the number of people. For Moscow, this threshold was 50 people, for the Moscow region – 5 000 people. for More information, see the decree of the Moscow Mayor dated March 5, 2020 No. 12-UM (as amended in accordance with the decree of the mayor of Moscow dated March 16, 2020 No. 21-UM) , the decision of Governor MO from 12.03.2020 No. 108-NG (as amended in accordance with the decision of Governor MO from 13.03.2020 No. 115-PG).
Such limitations in scope are unprecedented in the present situation have a significant impact on civil turnover.
Given the above, of interest is the question of what cases should be considered as the spread of coronavirus infection force majeure or force majeure in the context of the fulfilment of civil obligations.
As a General rule, a person is exempt from liability for breach of commitments if he proves that proper performance was impossible due to force majeure, ie extraordinary and unavoidable under the given circumstances (clause 3 of article 401 of the Civil Code of the Russian Federation (the “civil code”).
The similar norm contains in item 1 of article 7.1.7 of the UNIDROIT Principles 1994, 2004, 2010
Therefore, to qualify the circumstances as force majeure must meet the following two conditions:
A. Abundance – uniqueness, going beyond the normal, the mundane, the extraordinary to those or other life conditions that does not apply to life risk and cannot be considered under any circumstances (see resolution of the Presidium of the Russian Federation from 21.06.2012 N 3352/12 in the case N A40-25926/2011-13-230 the par. 2 p. 8 resolution of the Plenum of the Supreme Court of 24.03.2016 No. 7).
B. Neprijatnosti – the influence of objective factors which any participant of civil turnover, carrying out the same activities as the debtor could not avoid the occurrence of this circumstance or its effects (see par. 3 p. 8 resolution of the Plenum of the Supreme Court of 24.03.2016 No. 7).
The above factors suggest that the occurrence and cessation of force majeure occurs, regardless of the will of the person to whom such extraordinary circumstances affect, i.e. does not depend on subjective factors.
For example, to force majeure can not be attributed to business risks (illegal actions of third parties, revocation of the license of the Bank, the change in the exchange rate, devaluation of the national currency), since in this situation no sign of neprijatnosti.
In view of the above above, we believe that the most comprehensive definition of force majeure is the wording contained in the regulation on the procedure of witnessing chamber of Commerce and industry of the Russian Federation of circumstances of insuperable force (force majeure) (the Annex to the decision of the Board of the CCI of the Russian Federation from 23.12.2015 N 173-14)
So, under force majeure refers to an extraordinary, unforeseen and unavoidable circumstances that arose during the implementation of contractual (contractual) obligations that could not reasonably be expected at the conclusion of the agreement (contract) to either avoid or to overcome, and beyond the control of the parties to the agreement (contract).
In particular, such circumstances include: natural disasters (earthquake, flood, hurricane), fire, mass diseases (epidemics), strikes, hostilities, terrorist acts, sabotage, restriction of transportation, prohibitive state measures, the prohibition of trade operations, including with individual countries, due to the adoption of international sanctions and others not depending on the will of the parties to the agreement (contract) circumstances.
In the present circumstances to recognize that the spread of coronavirus infection and as a consequence of the introduction of a number of limitations, subject to certain conditions, to accept force majeure, which exempts parties from liability for breach or improper performance of obligations.
However, in this case, it is necessary that there was a direct causal link between the failure to fulfill civil obligations and restrictions imposed in virtue of the spread of coronavirus infection.
We illustrate this example in the context of the already introduced restrictions. In a mixed agreement containing a condition about the supply of high-tech equipment manufactured in a foreign enterprise, contains a condition about the necessity of erection and commissioning only by certified specialists of the manufacturer. The agreement contains an agreed schedule of delivery and adoption of these works. However, after partial performance of the contract in terms of delivery of the equipment restrictions on the entry of foreign citizens, which in turn, allows to perform the obligation to perform work in the stipulated time. This fact may lead to losses for the buyer. However, in case of judicial dispute, the seller may be exempt from civil liability, if you provide proof:
• The presence of restrictive measures (restrictions on entry of foreign specialists);
• Timely notification of the buyer about the presence of force majeure;
• Impossibility of performance of named works of other experts.
It is obvious that the spread of coronavirus infection and the restrictions imposed as a consequence satisfy the criteria of extreme. So in the example the key point to release the seller from civil liability is the inability to perform erection supervision and commissioning works, and the lack of such specialists in Russia, as otherwise the circumstances would not meet the sign of neprijatnosti.
A similar example is also found in the jurisprudence. For example, the regulation of FAS northwestern district from 27.06.2014 in the case of N F07-6569/2013 the court refused to admit the food embargo to force majeure, because the plaintiff has not proved that its main counterparties are foreign legal entity and he did not have the possibility of purchase of goods in the territory of the Russian Federation. In this case, the circumstances cited by the applicant do not meet the criterion of neprijatnosti in the absence of evidence to the contrary.
As noted above, equally important is also the fact of notifying the counterparty of the occurrence of force majeure. Thus in the current Treaty practice of the parties, as a rule, fix the terms and the procedure for sending such notification, which must be observed by the parties. Failure to comply with the order and notice periods established by the contract, the courts do not take into account the existence of force majeure: see resolution of the Federal far East district from 25.11.2009 N F03-6172/2009 in the case of N A59-6781/2008, the Regulation of FAS Moscow district on 11.03.2013 in case N A40-78213/12-155-714 the Decision of Arbitration court of the Volga district from 15.02.2018 N Ф06-29367/2018 in the case of N A72 1268/2017.
In the absence of the contract regarding the manner and timing of notice, the courts take into account the correspondence of the parties and the submission of evidence of “force majeure”: see the Decision of the Eighth arbitration appeal court from 15.06.2017 in the case of N A46-15971/2016, the Decision of Arbitration court of the Ural district from 04.12.2017 N F09-6458/17 in the case of N A07-4281/2017, the Decision of Arbitration court of the Volga district from 23.06.2015 N Ф06-24737/2015, Ф06-25301/2015.
IMPORTANT! Party to the contract that refers to the existence of force majeure circumstances, must prove the existence of such circumstances in the case that the court does not recognize the said fact is well known in the part 1 of article 69 of the APC, part 1 of article 61 of the RF CPC.
Summarizing the above, we would like to emphasize that, by themselves, force majeure events do not exempt the parties from liability for breach or improper performance of obligations.
Therefore, in this situation the most important is the presence of criteria, pertinent to the circumstances of force majeure, the direct impact of such circumstances on the performance of specific obligations and compliance with the order notifying the counterparty of the occurrence of such circumstances.
Thus, the algorithm of actions of the party that can not fulfill adequately the obligation as follows:
1. To examine the state of the agreement on a qualifying clause on force majeure, on the order and timing of the notification to contractor of such circumstances.
2. In the presence of such clauses to comply with a condition on the order notification and to send a specific proof of force majeure within the established deadlines.
3. In the absence of a clause on force majeure shall promptly make the notification in a free form addressed to the head contractor, to indicate the presence of force majeure circumstances, attach supporting documents and send to the address of the company.
4. If technically possible, to ensure the receipt of such notification, in the shortest possible time, and, therefore, it is advisable to duplicate the notification of known e-mail addresses.
5. It is important to record the fact of notification by inventory investment.