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Litigation & Dispute Resolution 2021 Litigation & Dispute Resolution 2021 A practical cross-border insight into litigation and dispute resolution work 14th Edition Featuring contributions from: Arendt & Medernach Juris Ghana Legal Practitioners Poul Schmith BMG Avocats Kirkland & Ellis Rui Bai Law Firm Candia Advocates and Legal Consultants Kovalev, Tugushi & Partners SANDIVA Legal Network Cektir Law Firm Laude Esquier Champey Sárhegyi & Partners Law Firm Clayton Utz Linklaters LLP SCHWARZ advokáti s.r.o. Covington & Burling LLP Monereo Meyer Abogados Tadmor Levy & Co. Cozen O’Connor Munari Cavani The Law Society of England and Wales Delphi N. Pirilides & Associates LLC Umsizi LLP Dentons Eric Silwamba Jalasi and Linyama Nagashima Ohno & Tsunematsu Wakefield Quin Limited Florent Pinheiro Neto Advogados Wilhelm & Büchel Rechtsanwälte GrayRobinson, P.A. Potter Anderson & Corroon LLP Table of Contents Expert Chapters Resiling from Contractual Obligations under English Law: 1 Force Majeure and Frustration in Tumultuous Times Greg Lascelles & Alan Kenny, Covington & Burling LLP EU–UK Relationship Going Forward on Jurisdiction, Recognition and 6 Enforcement of Judgments in Civil and Commercial Matters Dr Helena Raulus, The Law Society of England and Wales Q&A Chapters Australia Kenya 13 Clayton Utz: Colin Loveday & Scott Grahame 148 Umsizi LLP: Jacqueline Oyuyo Githinji Bermuda Liechtenstein 22 Wakefield Quin Limited: Matthew Mason & 158 Wilhelm & Büchel Rechtsanwälte: Christoph Büchel Cristen Suess Luxembourg Brazil 166 Arendt & Medernach: Marianne Rau 29 Pinheiro Neto Advogados: Renato Stephan Grion & Thiago Del Pozzo Zanelato Netherlands 173 Florent: Yvette Borrius & Chris Jager China 38 Rui Bai Law Firm: Wen Qin & Juliette Zhu Russia 181 Kovalev, Tugushi & Partners: Sergey Kislov & Cyprus Evgeny Lidzhiev 44 N. Pirilides & Associates LLC: Kyriakos Karatsis & Tania Pirilidou Slovakia 189 SCHWARZ advokáti s.r.o.: Andrej Schwarz & Denmark Simona Uhrinová 51 Poul Schmith: Henrik Nedergaard Thomsen, Kasper Mortensen, Sigrid Majlund Kjærulff & Paw Fruerlund Spain 196 Monereo Meyer Abogados: Sonia Gumpert & England & Wales Michael Fries 60 Covington & Burling LLP: Greg Lascelles & Alan Kenny Sweden 203 Delphi: Tobias Hamrin & Emil Andersson France 72 Laude Esquier Champey: Olivier Laude, Switzerland Benoit Renard & Lucie Saadé-Augier 210 BMG Avocats: Rocco Rondi, Guillaume Fatio & Isabelle Baroz-Kuffer Germany 81 Linklaters LLP: Dr. Christian Schmitt & Turkey Dr. Kerstin Wilhelm 219 Cektir Law Firm: Berk Cektir & Nihal Sahin Ghana 88 Uganda Juris Ghana Legal Practitioners: Godwin Mensah 228 Candia Advocates and Legal Consultants: Sackey, Papa Yaw Owusu-Ankomah, Kwesi Papa Candia Emmanuel & Mindreru Hope Sarah Owusu-Ankomah & Felix Opoku Amankwah USA – Delaware Hong Kong 238 97 Potter Anderson & Corroon LLP: Jonathan A. Choa, Kirkland & Ellis: Kelly Naphtali & Jacky Fung John A. Sensing, Clarissa R. Chenoweth-Shook & Carla M. Jones Hungary 106 Sárhegyi & Partners Law Firm: Dr. András Lovas USA – Florida 246 GrayRobinson, P.A.: Leslie Arsenault Metz & Indonesia Emily L. Pineless 115 SANDIVA Legal Network: Allova Herling Mengko & Febry Arisandi USA – Pennsylvania 253 Israel Cozen O’Connor: Michael W. McTigue Jr. & 122 Tadmor Levy & Co.: Yechiel Kasher & Sivan Marie Bussey-Garza Wulkan-Avisar Zambia 260 Italy Dentons Eric Silwamba Jalasi and Linyama: 130 Munari Cavani: Raffaele Cavani & Bruna Alessandra Eric Suwilanji Silwamba, Lubinda Linyama & Fossati Joseph Alexander Jalasi Japan 139 Nagashima Ohno & Tsunematsu: Koki Yanagisawa & Hiroyuki Ebisawa Chapter 1 1 Resiling from Contractual Obligations under English Law: Force Majeure and Frustration in Tumultuous Times Greg Lascelles Covington & Burling LLP Alan Kenny Introduction When a force majeure clause will, and will not, apply 2020 has been a tumultuous year. Along with COVID-19, there A force majeure clause will usually set out what impact an event is have been a record number of natural disasters, extreme vola- required to have on the contract before it can be considered a force tility in commodity prices and, in Europe, continued uncer- majeure event. It is common for clauses to provide that the event tainty surrounding the UK’s exit from the European Union must “prevent performance”, or alternatively “prevent, hinder or delay (“Brexit”). In uncertain times it can become more difficult and performance” (or such similar formulation). The first formulation sometimes impossible for contractual obligations to be fulfilled, imposes a significantly higher burden than the second, requiring and parties may look to try to be excused from existing obliga- performance to be legally or physically impossible; whereas to tions and protect themselves from future ones. show hindrance or delay it may be sufficient if performance has This chapter looks at the principles of force majeure and of frus- become substantially more difficult, albeit it remains possible. tration,1 and when these concepts can be relied upon to bring English case law is clear that it is exceedingly difficult for a about the suspension or termination of contractual obligations, party to rely on a force majeure provision simply because an unfore- looking at recent potential force majeure and/or frustrating events seen event has made it much more expensive, or even uneco- to provide context, namely the COVID-19 pandemic and Brexit. nomic, for it to perform its obligations, or has affected the ease with which the obligations can be performed (unless the clause Force Majeure includes “explicit terms” to this effect). A party will generally not be able to rely on a force majeure What is force majeure? clause if performance is only temporarily prevented or only one means of performance is prevented (unless this is the only Very generally, force majeure refers to an event that is external to means allowed under the contract). the contracting parties, unforeseen at the time of contracting, Generally, where a force majeure provision provides that a party and which has unavoidable effects on contractual perfor- is to be automatically discharged from future performance if a mance. In civil law jurisdictions, there are codified principles force majeure event occurs, there is no need for the party to prove that dictate the impact of such events on contractual obliga- that they could have performed, but for the event. However, tions. Under English law, there is no such generally applicable where the provision serves only to excuse the party from its principle; whether and the extent to which a force majeure event non-performance, and only suspends performance obligations, impacts on contractual obligations depends on whether the they may have to prove that they could have performed, but for contract contains a force majeure provision, and precisely what it the event, in order to rely on the provision. This is especially so says. As force majeure clauses are a common feature of English if the clause provides that the disruption must “result from” the law contracts, case law provides guidance on the normal require- event, or that the event must “directly affect performance” (or similar). ments for a valid clause. Invoking force majeure Force majeure clauses and force majeure events It is common for force majeure clauses to set out what a party is In general, a force majeure clause will set out a list of events, often required to do in order to invoke force majeure. Normally, a party followed by a catch-all general provision (e.g. “any other event will be required to serve notice of the force majeure event and beyond the parties’ control ”), and a description of what the effect of may be required to serve other documents, e.g. those required such events will be on the contract. to evidence that the force majeure event has or will affect perfor- Force majeure events are generally either natural (e.g. fires, explo- mance. Often, the clause prescribes when the notice must be sions, natural disasters, pandemic/epidemic) or human (e.g. war, served (normally within a short period after the occurrence riot, strikes, changes in law, terrorism). These events must be of the force majeure event, even if performance has not yet been expressly stated: a clause that is too vague, for example one affected), to whom, and the precise format. The English courts providing that the contract is “subject to force majeure conditions”, may generally interpret notice requirements strictly, so parties should be considered void for uncertainty. make every effort to comply and to document their compliance. Force majeure events must generally be supervening, i.e. not Further obligations may also be imposed on the party foreseeable or predicted at the time the contract was entered invoking the clause, for example, to provide periodic updates on into, although there is no absolute rule to this effect. their (in)ability to perform, or to try to mitigate the losses arising Litigation & Dispute Resolution 2021 © Published and reproduced with kind permission by Global Legal Group Ltd, London 2 Resiling from Contractual Obligations under English Law from the force majeure event. In the absence of express wording, (ii) any supervening frustrating event(s) affecting perfor- the courts may imply wording to this effect. The steps required mance must have occurred after the contract was entered will depend on what is reasonable in the circumstances. In prac- into, and not be the product of the default of any party; and tice, this may require the party invoking force majeure to consider (iii) the contract must not
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