Covid-19 Forced Cause Effect on Contracts in International Trade

The virus, which emerged in the Chinese state of Wuhan in March 2019, and was described as Covid-19, soon spread and affected the entire world. WHO On January 30, 2020, the World Health Organization declared Corona an "emergency for international public health" for the virus. Subsequently, on March 11, 2020, the pandemic was declared. So this is the case. Covid-19 force majeure Will it affect its acceptance?

The Covid-19 virus has affected daily life. International travel and transport of goods has been hampered by the deadly effects of the outbreak. There have been restrictions on collective activities and activities throughout the country. With the rapid spread of the virus, the restriction of customs and goods transportation worldwide has negatively affected global trade. There have been measures such as banning flights and travel, temporary closure of factories. The disruption of the factories in operation has significantly affected production, commodities, tourism and global trade. The measures taken made the performance of the commercial agreements difficult. Proclaiming the pandemic worldwide, Covid-19 force majeure It has also become an argument that it cannot be counted.

What is Force Majeure?

A forceful cause, which is a legal term, is a de facto condition that temporarily removes the will of the parties to perform homework, obligations, or debts that they must fulfill depending on a given period of time. Earthquakes, floods, fires, etc. Natural disasters and pandemic Situations such as this can be exemplified by force majeure. In other words, the forceful cause is an unexpected situation that prevents the debt from being carried out, making it impossible for the debtor to pay the debt in this context.

For example, a commercial agreement was made between Germany and China for the purchase and sale of maintenance devices, but the production of the factory producing these products in China was interrupted due to the outbreak and all shipments were forced to be stopped. At this stage, China is taking a break from production and Covid-19 force majeure It must inform Germany that it cannot provide it with the reason, and as a result it must end the debt. If a prepayment has been received from Germany, the company in China must return the money.

As a result, it would not be right to say that every international agreement constitutes a compelling cause. Corona virus, Foreign Trade In international contracts that enter into the subject matter, it may be considered based on the current event and may constitute a compelling reason. However, in terms of commercial relations, it is important for both parties to inform each other in writing during this time in order to prevent a possible loss of rights, despite the possibility that Corona virus practices may be described as a compelling cause.

We wish you a healthy day.

Related Links

On Tuesday, March 24, 2020, in the Official Gazette, Coronavirus Due to (COVID-19) the Communique on the benefit of the Tax Procedure Law from the provisions of force majeure has been published. To access the communique, please click here

T.C. To reach the "Pandemic Influenza National Preparatory Plan" prepared by the Ministry of Health click here

ICC aims to assist large and small businesses in drafting contractual provisions that can be applied to unforeseen events such as the COVID-19 pandemic. Force Majeure And he updated the Articles of Extremism. (To access the text published by the TOBB) click here)