SPECIAL FILE : COVID 19 AND FORCE MAJEURE

23 Mar

Written By Josepha Nguelle

SPECIAL FILE COVID 19

FORCE MAJEURE: DEFINITIONS, CONCEPTS AND ANALYSIS IN THE CONTEXT OF THE COVID-19 HEALTH CRISIS.

1. INTRODUCTION

2. DEFINITIONS

3. CONCEPTS OF FORCE MAJEURE AND COVID-19

4. ANALYSIS & PERSPECTIVES OF THE CONCEPTS

5. EXAMPLE OF A FORCE MAJEURE CLAUSE IN A POWER PURCHASE AGREEMENT

1. INTRODUCTION

Covid-19 is confronting the world with an almost unprecedented multi-sectoral crisis. While its health impact promises to be contained by a vaccine in the near future, its legal impact is somewhat unresolved.

With thousands of contracts impacted or likely to be impacted, an old legal concept can help manage the impact of Covid-19: the notion of force majeure, which could address the following issues

- The modification or alleviation of contractual obligations;

- The elimination of penalties for late performance;

- Non-payment of damages due to delay or impossibility of performance.

The influence of the Covid-19 on the contractual, legal and judicial arena makes it relevant to analyse the notion of force majeure, which is nowadays essential in the management of this crisis.

This is why, in this dossier, we will define the notion of force majeure and that of Covid-19 (2), before presenting the relationship between these two concepts (3) and analysing the impact and possible solutions that seem relevant (4).

2. DEFINITIONS

2.1. Force Majeure.

Force Majeure refers to any event that may negatively affect the performance of a contractual obligation. It is characterised by the combination of three cumulative elements:

- The event's external nature: in that it is beyond the control or will of the persons subject to the contract;

- The unpredictability of the event: the event is beyond the control of the debtor of the obligation in that it could not by any means have been anticipated or foreseen at the time of the conclusion of the contract and ;

- The irresistibility of the event: the effects could not be avoided by appropriate measures, i.e. it was impossible to avoid the consequences of the event despite the fact that every effort was made to reduce or avoid them.

2.2. Covid-19.

Covid-19 refers to "Coronavirus Disease 2019". This infectious disease is caused by a virus of the Coronaviridae family. Its origin is still unknown, but it is believed to have emerged in December 2019 in the city of Wuhan, Hubei province in China.

Although it was on 11 March 2020 that the WHO, deeply concerned by the alarming levels of spread and severity of the disease, deemed that COVID-19 could be classified as a pandemic, it was in late December 2019 that it emerged in China.

It quickly spread throughout China and then abroad, causing a global epidemic that to date has more than 52.7 million cases, with 34.1 million cases cured and 1.29 million deaths.

In Cameroon, the number of infected people is estimated at 22,490, with the government having stopped giving further details on the extent of the pandemic.

3. CONCEPTS OF FORCE MAJEURE AND COVID-19.

3.1. Forms of force majeure.

Force majeure applies to any event, circumstance, or combination of events or circumstances, which occurs either in Cameroon or abroad or circumstances which are beyond the control of persons and are by their nature unavoidable while occurring either in Cameroon or abroad or which directly involve Cameroon or abroad.

Political force majeure will for example be caused by the government of the host country, or could be prevented or controlled by that government. This may include an act or state of war, invasion, armed conflict, embargo or revolution, riots, insurrections, civil war, acts of terrorism, change of law and social movements etc.

Natural force majeure may refer to an earthquake, cyclone, tidal wave, fire or natural explosion, chemical contamination, epidemic, landslide etc.

3.2 Considerations relating to the date of the contract.

The date in the case of force majeure is an important parameter. It makes it possible to determine the period from which the condition of unforeseeability must be retained.

In Cameroon, for example, if prior to the 13 measures taken by the Prime Minister, a company manager had planned to go abroad to fulfil an obligation binding his company on 19 March 2020, he would be able, before a Cameroonian court, to raise the clause or a case of force majeure, arguing that since 17 March 2020, the Cameroonian government had, for example, closed all national borders.

The manager in this case shall therefore demonstrate the link between the event he is supposed to go to and the impossibility for him to execute it because of the measures taken by the Cameroonian Government.

The date on which the case of force majeure occurs is therefore later than the day on which the unforeseeable event first occurred. What about irresistibility?

3.3 Considerations relating to the person claiming force majeure.

Cameroonian law defines force majeure as the combination of these three cumulative elements (exteriority, unpredictability and irresistibility), the case of force majeure must be assessed by reference to a prompt, prudent and diligent person who will have taken all conceivable precautions to avoid the consequences that occurred.

This means that a judge will always have to determine whether the person who invokes it has no link, even indirect, with the occurrence of the faulty event and that, in consideration of his qualities, prudential standards and diligence that a normal person should have set, the so-called unforeseeable and irresistible event occurred when he did everything possible to avoid its occurrence and could not in any way foresee it.

3.4. The effects of force majeure.

When the force majeure clause in the contract is activated, it allows the party invoking it to

- to release him from his obligation by allowing him not to perform an undertaking;

- to exempt him from his contractual liability by preventing him from being held liable for damages resulting from his non-performance.

Considering this, the force majeure clause allows to

- Suspend the performance of the contract by bilaterally agreeing to postpone the performance of the obligation for a given period of time; to this end, a new date is set within a reasonable period of time, notification of the postponement is sent to the other party and the contract is suspended until the scheduled date and any payments are retained

- To terminate the contract, i.e. to end or cancel it, in the knowledge that it will no longer have any effect for the future and that the parties will simply part ways;

- Rescind the performance of the obligation if the contract becomes null and void, useless, or if it results in a definitive impediment, which vitiates its purpose, for example. In this case it will be necessary to inquire into the extent of the performance of the contract in order to restore the parties to the status quo ante.

In either case, the three cumulative conditions indicated above must be met. A case-by-case assessment by the judges seized of the case is necessary to determine whether the causes of non-liability have been met.

3.2 Considerations relating to the date of the contract.

The date in the case of force majeure is an important parameter. It makes it possible to determine the period from which the condition of unforeseeability must be retained.

In Cameroon, for example, if prior to the 13 measures taken by the Prime Minister[1], a company manager had planned to go abroad to fulfil an obligation binding his company on 19 March 2020, he would be able, before a Cameroonian court, to raise the clause or a case of force majeure, arguing that since 17 March 2020, the Cameroonian government had, for example, closed all national borders.

The date on which the case of force majeure occurs is therefore later than the day on which the unforeseeable event first occurred. What about irresistibility?

3.3 Considerations relating to the person claiming force majeure.

3.4. The effects of force majeure.

When the force majeure clause in the contract is activated, it allows the party invoking it to

- to release him from his obligation by allowing him not to perform an undertaking;

- to exempt him from his contractual liability by preventing him from being held liable for damages resulting from his non-performance.

Considering this, the force majeure clause allows to

- To terminate the contract, i.e. to end or cancel it, in the knowledge that it will no longer have any effect for the future and that the parties will simply part ways;

3.5. Force majeure: Covid-19 or the restrictive measures arising from it?

Does Covid-19 constitute, strictly speaking, "the" case of force majeure that can affect a contractual situation, or should the restrictive measures taken against it be considered as force majeure?

In the example of the manager used above, does the case of force majeure relate to Covid-19 itself or to the circumstances and restrictive measures that it has generated?

If the judge grants the termination or suspension of the manager's contract, will it be on the basis of Covid-19 or because of one of the 13 measures put in place by the government?

In our view, it depends on what the manager's argument is based on. If he relies on the impossibility for him to move freely because of the restrictive measures, the case of force majeure will probably be recognised. On the other hand, if he invokes the pandemic itself as having affected the activities for which he was going to meet his partners, there is a chance that a court will find that the pandemic has rendered the fulfilment of his obligation pointless or impossible.

In another example, if in a small town of 2,000 inhabitants, all are infected or bedridden because of Covid-19, it will be possible without the need to raise a possible governmental restrictive measure, to invoke force majeure, since it is impossible for them to go to work or to honour their obligations.

That said, it is on a case-by-case basis that Covid-19 or the restrictive measures arising from it may be raised as a case of force majeure.

4. THE USE OF FORCE MAJEURE.

4.1. In Cameroon.

Recourse to force majeure is enshrined in Cameroon, both legally and by case law.

Legally, if it is true that 'legally formed agreements take the place of law for those who have made them'[2] or that 'any obligation to do or not to do is resolved in damages, in the event of non-performance by the debtor'[3], Article 1148 of the Civil Code provides that "there shall be no damages where, as a result of force majeure or a fortuitous event, the debtor has been prevented from giving or doing what he was obliged to do, or has done what he was prohibited from doing".

In terms of case law, the Cameroonian administrative judge[4] has admitted the presence of three elements (externality, irresistibility and unpredictability) for an event to be qualified as force majeure. And in a long-standing case law, the sovereign appreciation by the trial judges of the reality of the alleged facts has been legitimised[5].

4.2 In France.

On the occasion of the discussions in the National Assembly on the 2021 Finance Bill, the French Minister of the Economy and Finance, Bruno Le Maire, declared on 28 February 2020 that "the State considers the coronavirus as a case of force majeure for companies".

Among several other regulatory and legal texts, the ordinance n° 2020-326 of 25 March 2020 relating to the personal and pecuniary liability of public accountants, allowed "due to the current situation constituting force majeure" not to bring into play the pecuniary liability of public accountants, justifying the inapplication of penalties in case of delay in the execution of contractual services.

Under the terms of Article 1218 of the French Civil Code: "There is force majeure in contractual matters when an event beyond the control of the debtor, which could not reasonably be foreseen at the time of the conclusion of the contract and the effects of which cannot be avoided by appropriate measures, prevents the performance of his obligation by the debtor. If the impediment is temporary, the performance of the obligation is suspended unless the resulting delay justifies termination of the contract. If the impediment is definitive, the contract shall be terminated ipso jure and the parties shall be released from their obligations under the conditions provided for in Articles 1351 and 1351-1. "

In concrete terms, in order to consider that there is force majeure, the French text requires that the event in question "is beyond the control of the debtor", that it cannot "be reasonably foreseen at the time of the conclusion of the contract" and that it is impossible to avoid its effects "by appropriate measures".

FRENCH CASE LAW

- Commercial contracts

Until now, the existing case law on disease and epidemics has been in the opposite direction, as the plague bacillus[6], the H1N1 flu epidemics in 2009[7], the dengue virus[8] or the chikungunya virus[9] have not been considered as health crises constituting force majeure events. In these cases, the judges considered either that the diseases were known, as well as their risks of spreading and effects on health, or that they were not (sufficiently) fatal and therefore ruled out their use as a reason for refusing to perform a contract[10].

But today, according to our latest figures, Covid-19 in France is 2,140,000 cases for 153,000 cures and 49,232 deaths. Given the evolution of the pandemic and the second reconfinement of the French, it is clear that the pandemic can already be considered as a force majeure.

In orders issued on 20, 26 and 27 May 2020, the Paris Commercial Court considered that the conditions of force majeure, as provided for in the contracts entered into by EDF with Total Direct Energie, Gazel Energie Solutions, Alpiq Energie France and Vattenfall Energies via the "regulated access to historical nuclear electricity" (ARENH) scheme, had been met. It thus ruled in favour of these energy suppliers who had wished to suspend their advance purchases of nuclear electricity produced by EDF at a fixed price because of the Coronavirus pandemic.

It should be noted that legally, the burden of proof of force majeure and its constituent elements rests on the debtor of the obligation; on the person who invokes it[11].

11] However, since contracts are the law of the parties, two decisions of the Paris Court of Appeal[12] concerning the invocation of the contractual force majeure clause in a case of downstream electricity purchases (when the Covid-19 crisis caused the price of electricity to fall by almost 40%), confirm the possibility of reversing the burden of proof; in these cases, considering the contracts in question, it is specified that the burden of proving the absence of force majeure on the part of the debtor rests rather on the creditor of the obligation.

This results in the drafting of an 'adapted' force majeure clause, which goes against the grain of those provided for by the legal texts.

Consequently, when a force majeure clause is included in a contract, it must be examined to determine how it applies, how it is triggered and the consequences of its application.

This examination is crucial because a force majeure clause may provide the possibility to invoke force majeure in a case where the legal definition alone would not allow it. For example, a court recognised the Covid-19 crisis as a case of force majeure due to the existence of a force majeure clause modifying the condition of ineligibility by referring to the impossibility to perform the obligations "under reasonable economic conditions" (Paris Commercial Court, order of 20 May 2020).

On 28 July 2020, the Paris Court of Appeal upheld the aforementioned order by which the President of the Paris Commercial Court had ruled that the conditions of force majeure, as defined in a framework contract for the supply of electricity, were "manifestly met" in the context of the Covid-19 pandemic. This is one of the very first decisions in this area.

The force majeure clause provided that the contract could be suspended or terminated in the presence of an "external, irresistible and unforeseeable event making it impossible for the parties to perform their obligations under reasonable economic conditions.

Parties may therefore contractually opt, in the event of the occurrence of force majeure, for exclusions of force majeure including health risks or decisions taken by public authorities.

In short, the will of the co-contracting parties may distort the letter and spirit of a force majeure clause, the importance of which they are aware. This highlights the need either to refer strictly to the letter of the law, in particular Article 1218 of the French Civil Code, in order to be able to rely on the conditions laid down therein, the obligation to notify the co-contractor of the case of force majeure and, in the event of a dispute, to place the burden of proof of force majeure on the debtor of the obligation, or to seek the assistance of a professional.

Foreign law

The decisions handed down to date concerning the Covid-19 and which go in the direction of the characterisation of force majeure are however to be relativised because they concern the litigation of foreigners' law and not contract law.

Several decisions have thus been handed down by the Douai Court of Appeal, which considered :

- that the circumstances of the cancellation of the flight by the Italian authorities, to Naples, characterise force majeure and are not attributable to a lack of diligence on the part of the prefecture services (CA Douai of 4 March 2020, No. 20/00395);

- that "the closure of the Guinean consulate is a case of force majeure that is not attributable to the services of the prefecture" (CA Douai of 5 May 2020, no. 20/00660);

- In view of the situation of force majeure resulting from the sudden onset of a fatal epidemic preventing any safe movement of the detained person and justifying the use of videoconferencing which allowed communication with X without difficulty" (CA Douai of 26 April 2020, no. 20/00639, no. 20/00640, no. 20/00641);

- the cancellation of the flight of 20 March 2020 was the result of a case of force majeure following the health situation linked to COVID 19" (CA Douai of 23 April 2020, No. 20/00632).

- In two rulings dated 16 March 2020, the Colmar Court of Appeal emphasised that the region, which is made up of "particularly notable outbreaks of the epidemic, characterised by a significant degree of contagion and of such a nature as to run real and sufficiently serious risks to all the staff required to ensure the holding of the hearing in the presence of the detainee", in order to deduce that these circumstances "have the character of force majeure, being external, unforeseeable and unavoidable"[13].

- On 12 March 2020, the Colmar Court of Appeal handed down a decision qualifying the risk of contagion by Covid-19 as a case of force majeure in the context of a procedure to extend the administrative detention of a foreigner. In this case, the Colmar Court of Appeal was seized of the administrative detention of an individual likely to have frequented people infected with the virus. However, the Court of Appeal was required to render its decision within a specific legal timeframe and video-conferencing was impossible due to technical difficulties. The court therefore qualified the risk of contagion by Covid-19 as force majeure and had to render its decision in the absence of the person concerned.

- Similarly, the Bordeaux Court of Appeal ruled in similar circumstances on 19 March 2020, with the difference that it had to decide whether or not to admit a person to forced psychiatric care without consent. The court accepted the case of force majeure to justify the impossibility of physically disposing of the person concerned in court[14].

4.3 England.

English law applies a mechanism similar to that of force majeure in French law, that of frustration.

The doctrine of frustration applies when an unexpected event beyond the control of the parties makes performance of the contract materially or legally impossible or radically changes the obligations of the parties.

This event can be of a very varied nature: a fire which destroys a rented theatre (Taylor v Caldwell [1863]), the illness or death of the debtor (Condor v Baron Knights [1966]) or a change in legislation which makes the performance of a contract unlawful (Denny, Mott and Dickson v James B Fraser & Co Ltd [1944]).

In this case, it seems that the appearance of Covid-19 and the introduction of a containment policy is an unexpected event, beyond the control of the parties. But debtors are not relieved of all their obligations; only those that they cannot perform or that have been radically altered.

Thus, the nature of the obligation and the concrete consequences that the confinement has had on its performance must be taken into account.

If the conditions are met, the party is 'discharged' from its obligation. The Law Reform (Frustrated Contracts) Act 1943 provides for the restitution of sums already paid.

Contract frustration

The classic test for frustration of a contract is that there must be an event which :

- occurs after the formation of the contract ;

- is so fundamental that it must be regarded by the law as striking at the root of the contract and as going entirely beyond what was contemplated by the parties when the contract was made;

- is not due to the fault of either party; and

- makes further performance of the contract impossible, unlawful or radically different from that contemplated by the parties at the time the contract was concluded.

The effect of frustration is to terminate the contract and release the parties from their future obligations. Payments made, services rendered and expenses incurred prior to the performance of the contract will be treated under a statutory regime.

Parties should proceed with caution - an abuse of frustration could amount to a waiver of the contract and significant liability for damages.

Litigation - Force majeure and frustration in English law

In English law, there is no general doctrine on hardship or change of circumstances. Therefore, unless the narrowly confined common law doctrine of frustration applies, parties to English law contracts will have to turn to the express terms of the contract. The use of a contractual force majeure clause, if one exists, may be a way for parties to mitigate their exposure.

A force majeure clause relieves one or both parties from the performance of the contract in the event of the occurrence of one or more specified events beyond their control. There is no single definition of force majeure in English law. Whether the triggering of COVID-19 and/or its particular consequences constitute force majeure events will depend on the wording of the contract, interpreted in accordance with general principles of contractual interpretation.

Even if the terms of the clause appear to encompass the event in question (for example, because it refers to "pandemics" or "epidemics"), a declaration of force majeure by a counterparty should not be taken at face value. English law provides important limitations on force majeure:

Causation: the party invoking the clause must prove that the non-performance is the result of the relevant event which falls within the scope of the force majeure clause. The party may not rely on the force majeure clause if, but for the specified event, it would still not have been able to perform.

Restrictive interpretation: It is common for force majeure clauses to specify that the relevant triggering event must "prevent" (not merely hinder or delay) performance. If this is the case, performance of the contract must be legally or physically impossible, not just commercially difficult.

If you decide to rely on force majeure (or if you face a claim from your counterparty), the contractual notice provisions must be strictly adhered to. The English courts have repeatedly emphasized the need to comply with any express preconditions for invoking force majeure. A party invoking a force majeure clause must keep a detailed record of any steps it takes to mitigate loss.

Should frustration be invoked?

Force majeure and frustration both offer the contracting parties relief from their obligations. But there is a key difference: an event of force majeure cannot automatically result in termination of the contract (it merely relieves a party of the obligation subject to force majeure), whereas frustration results in automatic termination.

Historically, the courts have stressed that the doctrine of frustration is very narrow. It is generally considered extremely difficult to convince the courts that a contract has been rendered unenforceable (as there must have been an unforeseeable change in circumstances which made performance of the contract impossible). However, given the widespread effects of COVID-19, there may be circumstances in which parties can successfully make a frustration argument (for example, where a specific event has been cancelled).

5. PRESENTATION OF THE IMPACT OF COVID-19 IN AFRICA AND CAMEROON

5.1 ECONOMIC IMPACT OF COVID-19 IN AFRICA

According to World Bank projections, the Covid-19 pandemic will push at least 71 million people into extreme poverty (below the international threshold of $1.90 per day)[15].

The Economic Commission for Africa predicts that economic growth (GDP) will fall from 3.2% to 1.8%, and globally from 2.9% in 2019 to 2.4% by 2020.

According to the Executive Secretary of the Economic Commission for Africa (ECA), Vera SONGWE, "the interconnection of the continent with the affected economies of the European Union, China and the United States has had a knock-on effect"[16]. This is confirmed by the UNDP, which has stated that the Covid-19 crisis threatens to hit developing countries disproportionately - income losses in Africa are expected to exceed $220 billion and nearly half of all jobs could be lost.

5.2 IMPACT OF COVID-19 IN CAMEROON.

5.2.1. At the macroeconomic level.

- Growth prospects for 2020 are revised downwards by 5.1 points. This growth is currently at 1.1% as against 4% in the initial Finance Law;

- 768.6 billion (-21.1%) of the internal revenue mobilisation objectives, notably due to the 14.3% reduction in oil revenues;

- 542.6 billion (-11%) of the State budget;

- Deterioration of the overall budget balance to 4.5% of GDP in 2020 against 2.1% initially.

5.2.2. At the microeconomic level.

- Among businesses: 90% of businesses believe they will be negatively impacted by the restrictive measures;

- Decrease in demand (94.2%), difficulty in domestic supply (76%), difficulty in external financing (76%);

- Decrease in production (82.6%), Decrease in turnover (94.2%) and Reduction in the number of employees (52.8%);

- Among households: 78% of households are aware of and worried about the consequences of the pandemic;

- Strong concern about the future of children due to the disruption of the school calendar with the temporary closure of schools;

- Decrease in activity for 65% of households; decrease in income for 74% of households.

5.3. Response measures in Cameroon

The latest figure given by the Cameroonian government on the number of people infected (22,490) by Covid-19 suggests that, in general, the health crisis is being well managed; the recovery rate is reportedly 85%. However, with fears of a second wave of the disease being confirmed around the world, awareness-raising among the population has been stepped up, and Cameroonian citizens are being asked to respect distance measures and health rules and are even obliged to wear masks in public places and services.

Previously, other measures have been put in place in this direction. These are

- The implementation of the 13 restrictive measures of 17 March 2020: closure of borders, suspension of the issuing of entry visas, closure of pubs, restaurants and places of entertainment from 6pm, requisition of private health facilities, hotels, vehicles..., closure of educational establishments...

- The relaxation measures of 30 April 2020: The lifting of the measure reducing the regulatory number of passengers in all public transport by bus and taxis; the suspension for the 2nd quarter of 2020 of general accounting audits, the granting of moratoriums and deferred payments to businesses directly affected by the crisis, support for business cash flow through the allocation of a special envelope of CFAF 25 billion, for the clearance of stocks of VAT credits awaiting reimbursement; the postponement to September 30, 2020 of the deadline for payment of the property tax for the 2020 fiscal year...

5.4. DETAILS AND STRENGTHS OF FORCE MAJEURE AS A RESPONSE TO COVID-19

When force majeure occurs, a disaster or pandemic is already in place; people and property are already suffering the effects. Force majeure therefore comes into play as a remedy for the unforeseen (but defined) effects of overcoming the hopefully temporary situation.

Whether at the level of the company or the household, the institution or the State, including such a clause in one's contract is an asset that promotes prevention and the need to draft one's contracts properly. This is why:

- Clauses must be included in contracts that exhaustively define cases of force majeure, define the modalities for notifying the co-contracting parties and foresee the consequences, both positive and negative, that will result from them;

- Amend the laws in the light of developments in the case law relating to the Covid 19 issue;

- Have recourse to lawyers, courts or, better still, to Alternative Dispute Resolution in the event of disputes;

- Increase communication and awareness-raising activities to inform litigants about the importance of this notion as a contractual clause.

In addition, the Economic Commission for Africa advises African governments to review and revise their budgets to reprioritise spending to mitigate the expected negative effects of COVID-19 on their economies. This means that if Africa plays its cards right, the chance to save its economy from the consequences of the 2019 coronavirus disease is still there.

6. EXAMPLE OF A FORCE MAJEURE CLAUSE IN A POWER PURCHASE AGREEMENT.

0. FORCE MAJEURE

0.1. Force majeure events.

A force majeure event means any event or circumstance or combination of events or circumstances:

(a) which is beyond the reasonable control of the affected party;

(b) which could not have been prevented or avoided or overcome by the affected party acting in accordance with best industry practice; and

(c) which prevents, hinders or delays the performance by the Affected Party of its obligations or the enjoyment by the Affected Party of its rights under this Agreement or any Project Agreement, or which renders performance so impractical that it can reasonably be regarded as impossible in the circumstances.

Force majeure events are either political force majeure events or ordinary force majeure events, but do not include any event caused by:

(a) the negligence or wilful act, errors or omissions of the Affected Party, or the failure of the Affected Party to comply with any applicable law, or its breach or default of this Agreement;

(b) economic hardship of the affected party or changes in market conditions (unless caused by a change in law);

(d) delay or failure in performance by a contractor, vendor and/or supplier (unless such delay or failure is itself caused by an event of force majeure);

A force majeure event occurring in Cameroon and related to the plant, to the extent that it affects the contractor ... or the contractor ..., will allow the producer to claim that its performance has been affected by a force majeure event, provided that the producer and such a contractor has complied with its obligation to mitigate in accordance with Article 0.3.1(b).

0.2. Notification of a Force Majeure Event

0.2.1. Upon the occurrence of a Force Majeure Event, the affected Party shall:

(a) notify the other Party in writing, as soon as reasonably practicable but not later than five (5) Business Days after becoming aware of the Force Majeure Event (or as soon as reasonably practicable after the resumption of any means of notification between the Parties), of such Force Majeure Event:

(i) indicating the potential duration of the Force Majeure Event affecting the performance of the Party's obligations

(ii) indicating the expected consequences of the force majeure event; and

(iii) indicating the methods by which the party affected by the force majeure event proposes to mitigate its impact;

(b) use all reasonable efforts to remedy and mitigate the effects of the Force Majeure Event on its ability to perform and resume full performance hereunder as soon as possible;

0.3 Consequences of an Event of Force Majeure.

0.3.1 Subject to notice being given in accordance with Article 19.2.1(a):

(a) no Party shall be liable or deemed to be in breach hereof by reason of any failure or delay in the performance of its obligations under this Agreement which it is unable to perform solely by reason of one or more events of Force Majeure or the effect(s) thereof or any combination thereof (other than its obligation to make payment when due and payable)

(b) the time allowed for the performance by the Parties of such obligation(s) (and any milestone date, including the start date of the Extended Shutdown, the TCOD and the Extended COD) shall be extended on a day-to-day basis for so long as one or more Force Majeure Events continue to affect the performance by the Affected Party of such obligation(s) under this Agreement or any Project Agreement and for so long as the affected Party does everything reasonably possible to remedy its inability to perform and to resume full performance.

0.3.2 In the event of the occurrence of a Force Majeure Event, the Affected Party shall take all reasonable steps to mitigate and, if both Parties agree on what can reasonably be expected of the Affected Party, to attempt to overcome as soon as possible the impact of the Force Majeure Event that has affected the performance of the Affected Party's obligations.

0.3.3 Notwithstanding Article 0.1.1, the Parties shall perform their obligations under this Agreement to the extent that the performance of such obligations is not impaired by the Force Majeure Event, and no relief shall be granted to the affected Party under this Article 0.1 to the extent that such failure or delay would nonetheless have been suffered by the affected Party if such Force Majeure Event had not occurred.

0.3.4 In the event of a Dispute between the Parties concerning the assessment of the impact of the Force Majeure Event under this Article 0.1, either Party may submit the Dispute to the Expert in accordance with Article ...

0.3.5 The provisions of this Agreement, the effects of which have been suspended due to a Force Majeure Event, shall automatically resume all their effects with respect to the Parties after the cessation of the Force Majeure Event.

0.3.6 As soon as notification by the Party concerned of the occurrence of a Force Majeure Event is provided pursuant to Article 0.2.1(a), the Parties shall together examine in good faith possible ways of terminating the Force Majeure Event or mitigating its effects.

0.4. Payments during a Force Majeure Event.

0.4.1. Upon the occurrence and for the duration of any political Force Majeure Event that prevents (in whole or in part) the Generator from generating electrical energy or delivering electrical energy to the Delivery Point, the provisions of the [Licence Agreements] shall apply.

0.4.2. In the event of the occurrence and for the duration of any ordinary Force Majeure event affecting the Buyer and preventing (in whole or in part) the Generator from delivering Electrical Energy to the Delivery Point, the Buyer shall pay the Generator for the Energy deemed to have been delivered in accordance with Article ...

1] Special Statement on 17 March 2020 by the Prime Minister of Cameroon, Head of Government on the Government's strategy to respond to the coronavirus pandemic (Covid-19).

2] Article 1134 of the Civil Code

3] Article 1142 of the Civil Code

4] Tribunal Administratif de l'Ouest, judgment of 14 March 2016, Etablissements ENACAM v Etat du Cameroun.

5] SC, Order No. 59 of 29 April 1969, bull. des arrêts No. 20, p. 2469.

6] Paris, 25 Sept. 1996, No. 1996/08159.

7] Besançon, 8 Jan. 2014, No. 12/0229.

8] Nancy, 22 Nov. 2010, No. 09/00003.

9] Basse-Terre, 17 Dec. 2018, n° 17/00739.

10] Contracts and coronavirus: a case of force majeure? It depends... Dalloz. Actualité, by Ludovic Landivaux on 20 March 2020.

11] Com, 17 March 1998, n° 95-21.547; RJDA, 7/98, n°753; Paris, Pôle 6, ch. 12, 17 March 2016, n° 15/04263.

12] Paris, Pôle 1, ch. 2, 28 July 2020, nos. 20/06689 and 20/06675)

13] Thus, the Court ruled that: "in view of the Covid-19 pandemic underway and the containment measures taken by the public authorities, while (the) department of Haut-Rhin constitutes a major focus of the epidemic, characterised by a significant degree of contagion and of such a nature as to run real and sufficiently serious risks to all the staff required to ensure the holding of the hearing in the presence of the person held in the waiting zone, the case will be ruled on without the presence of the latter (...), the above-mentioned circumstances characterising a case of force majeure)."

14] The Bordeaux Court of Appeal thus ruled that: "Because of the current coronavirus pandemic, following the instructions of the Minister of Justice to activate the courts' business continuity plans and to retain only essential activities (...), today's hearing took place when X was unable to travel. The aforementioned continuation plan (...) does not provide for a hearing to be held on the hospital's equipped premises. (...) The use of video-conferencing was not possible for two reasons. (...) It is not legally possible to postpone the examination of the appeal raised by X (...). The above-mentioned elements characterise force majeure and constitute insurmountable circumstances which justify X's absence from today's hearing (...)".

15] Financing for Development in the Era of VIDA-19 and Beyond, VIDA-1P Response, United Nations.

16] Globalisation and COVID-19: What is the Impact on the African Economy, 15 April 2020, NEPAD, Africa Renewal.

Josepha Nguelle

SPECIAL FILE : COVID 19 AND FORCE MAJEURE

Lynda Amadagana fait l’objet d’un article dans le magazine Cameroon CEO.

Circular N°00000242/C/MINFI of 30 December 2020 on instructions relating to the Execution of Finance Laws, the Monitoring and Control of the Execution of the State Budget

Amadagana & Partners