Corporate Law

COVID-19 and Force Majeure: Navigating Exceptional Times as a Business

By Sharon G. Druker, Geneviève Goulet, Sara Laraichi, Elyssa Leiberman and Sydney Warshaw, from our Business Law Practice Group

April 15, 2020 — Everything has changed since the World Health Organization declared COVID-19 a pandemic on March 11, 2020, and it has since become increasingly clear that its impact will be felt across every level of society and industry. Businesses and individuals, reeling from the economic impacts of COVID-19, are wondering how it will impact their various contracts, legal obligations and commitments. In particular many are wondering if force majeure, an often under-considered element of most contracts, is relevant at this exceptional time.

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Bombay High Court: No benefit to Petitioners seeking Force Majeure owing to Covid-19 outbreak

Judgment: Standard Retail Pvt. Ltd. V/s M/s. G. S. Global Corp & Ors. with Integral Industries Pvt. Ltd. V/s M/s. G. S. Global Corp. & Ors.; Vinayaga Marine Petro Ltd. & Anr. V/s M/s. G. S. Global Corp. & Ors.; Hariyana International Pvt. Ltd. V/s M/s. Hyundai Corporation & Ors. and Prabhat Steel Traders Pvt. Ltd. V/s M/s. Hyundai Corporation & Ors. [Commercial Arbitration Petition Nos. 404, 405, 406, 407 and 408 of 2020],

Forum: Hon’ble High Court of Judicature at Bombay (“Court”)

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Update: Business Interruption Insurance in the Time of COVID-19

On March 23, 2020, shortly after the Governors of California, New York, Connecticut and New Jersey issued orders closing non-essential businesses, we recommended that businesses review their insurance policies to determine if they had either business interruption coverage or civil authority coverage that might be available to lessen the economic blow of COVID-19.  As explained here, business interruption coverage generally allows a business to recover certain losses in the event that the business suffers physical damage or loss that prevents it from operating its business, whereas civil authority coverage, generally allows a business to recover losses when it a civil authority issues an order that closes a business or prevents it from normal operations.  We also recommended that businesses submit any claims expeditiously because virtually all policies require policy holders to submit claims “promptly,” and the failure to do so provides a basis to deny a claim.

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COVID-19 related Frequently Asked Questions (FAQs) on Corporate Social Responsibility

Taking into account the references/representations received from various stakeholders seeking clarifications on eligibility of CSR expenditure related to COVID-19 activities, a set of FAQs along with clarifications has been provided by the Ministry of Corporate Affairs (“MCA”) for better understanding of the stakeholders vide its General Circular No. 15/2020 dated 10th April 2020.

The brief overview of the clarifications issued by MCA are as follows:

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The supervening impossibility of the performance and the force majeure at the time of Covid-19 in the Italian legal system

The supervening impossibility of the performance and the force majeure at the time of Covid-19 in the Italian legal system
From EXP Legal Contractual Law Team. The crisis resulting from the Covid-19 epidemic is having…

The question arises with particular regard to leasing relationships, whether commercial or for residential use, but is to be considered interpretatively and abstractly extended to any type of contract.

Of course, the problem arises in cases where the parties have not explicitly intended to regulate in the contract the occurrence of an interrupting or suspensive event regarding the obligations undertaken, and therefore in cases where no instances of supervening impossibility and/or force majeure have been typified, which may render the breach or delay in the fulfillment of one or both parties legitimate.

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Force Majeure During the COVID-19 Crisis

Companies have asked “Does the current corona crisis constitute a (global) force majeure – act of god situation from a legal point of view?” and want the answer in a short, summary format – and the ILN has answered – 23 member jurisdictions have weighed in with concise responses to help guide your business in the current crisis.

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Fladgate’s Top Ten quick fixes – helping you and your business in these volatile times

With the fast moving issues we are all facing along with the added challenge of many of us
working remotely, we have identified a few quick fixes designed to help you and your business get through the day that little bit easier. Our top ten fixes include everything from how and when to use electronic signatures through to how to navigate some of the priority employment issues. Read more..

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FAQ – Paycheck Protection Program Updates

The Coronavirus Aid, Relief and Economic Security Act (the CARES Act) includes the
Paycheck Protection Program, which provides economic relief for small businesses. Read more…

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The novel coronavirus impact on secured loans: Considerations for secured lenders and borrowers

Insight to help lenders and borrowers identify issues that should be considered due to the impact of the coronavirus. Specifically, lenders and borrowers should pay careful attention to the certain provisions in a credit agreement and related loan documents now more than ever. READ MORE

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Corona and intended mergers and acquisitions (M&A’s): terminate, invoke MAC’s or other conditions or postpone?

The Corona crisis has severe consequences for intended mergers and acquisitions (M&A’s). Many merger or acquisition plans and even pending deals are being terminated or being shelved. The question is which legal instruments parties may use under Dutch law to terminate a pending deal. And what can parties do in case they do not want to close the merger or acquisition at this moment, but want to uphold the possibility to reach a transaction in the future? The Corona crisis is unchartered territory in this respect as well. However, some general rules can be mentioned.

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