Is COVID-19 a case of force majeure?

Posted - 24.04.2020

|

Now reading : Is COVID-19 a case of force majeure?

The immediate answer to this question is yes, COVID-19 could be a case of force majeure provided, however, that it can be qualified as an event meeting the following criteria: irresistibility, unpredictability and externality.

In Luxembourg and abroad, officials have declared COVID-19 as a case of force majeure. The position of legal writers, however, is less clear, given the severity of past French case law in the qualification of previous epidemics. The severity is understandable, given the legal consequences of such qualification.

Indeed, the consequences of such a qualification on a given contract would, on the one hand, be the relief of the debtor from his obligations and on the other hand, the deprivation of the creditor from obtaining damages from his debtor.

However, limits to a full discharge of the debtor exist, depending on the circumstances, namely:

  • partial impediment where there is only partial impossibility of the contractual performance;
  • temporary impediment where the contractual performance is temporarily suspended and 
  • the termination of the contract for contracts with immediate performance.

The divisible nature of the respective services is of crucial importance in the determination of the consequences of the cancellation of the contract or of the possibility (or impossibility) to terminate the contract during the performance.

In the past, French courts have been confronted with several cases where epidemics have been invoked as cases of force majeure, but to date, none of those analysed by the courts have met the cumulative criteria in order to be qualified as such.

This case law might, however, change with the pandemic of COVID-19 since a number of arguments may help plead in favour of a qualification as force majeure:

  • it is an irresistible event because up to this date, there is no effective treatment;
  •  it is an unpredictable event because such an epidemic is hardly foreseeable (this criterion must though be put into perspective where multiple dates must be considered);
  • finally, it is an external event because it is generally occurring outside of the sphere of which the debtor shall be accountable.

The qualification of COVID-19 as a force majeure event, however, is to be appreciated on a case-by-case basis. 

Stay informed

Receive our regular newsletters and newsflashes.