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.
Amendments to the procedure for granting idle time benefits
Today, 9 April 2020, the Cabinet of Ministers amended the criteria for granting idle time benefits to employers affected by the crisis. The most essential amendments:
- An employee receiving an idle time benefit shall be granted an additional allowance of EUR 50 for each dependent child under the age of 24 for whom the employee is entitled to a personal income tax credit on the date of granting the idle time benefit;
- The members of the management board and supervisory board of the employer affected by the crisis may also receive the idle time benefit, if the income from economic activity of the employer affected by the crisis in 2019 does not exceed EUR 100,000;
- Idle time benefit is also available to employees concurrently receiving old-age or retirement pension.
- The procedure for calculating the idle time benefit for micro-enterprise taxpayers affected by the crisis has been adjusted.
- From now on, only Cabinet Regulation No. 165 will apply to all employers affected by the crisis, regardless of the sector.
The text of the amendments to the Cabinet Regulation No. 165 is available here.
Changes in employment
- It is determined that illness due to Covid-19 is not considered to be an accident at work;
- Self-isolation during performance of job duties, if a person does not show signs of acute respiratory infection and the person is not recognized as a contact person of Covid-19 infectious disease, does not apply to:
- Latvian citizens, who return from Lithuania and Estonia after performing their job duties;
- Lithuanian and Estonian citizens, who enter the territory of Latvia to perform their job duties.
Medical devices and personal protective equipment
- Procurement organized by public persons, subject to certain conditions, allows the purchase of personal protective equipment and medical devices, the conformity assessment procedure whereof has not been initiated or has not been fully completed, and which do not contain CE mark.
The text of the amendments to the Cabinet Order on declaring the state of emergency is available here.
As a follow-up to the “rent free period” issue, the Government of the Russian Federation has developed requirements for terms and conditions of deferred payment rent
Now parties can add up the idea of how to exercise the right to defer debt repayment under lease agreement.
In the legal community, it is believed that the deferral applies only to those lease agreements under which the lessee, due to quarantine restrictions, was not deprived of the opportunity to use the leased property for the purposes specified in the lease agreement.
So, according to the Decree of the Government of the Russian Federation dd. 03.04.2020 № 439:
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.
The closure of all but essential businesses will inevitably lead to commercial tenants being unable to pay their rent and seeking accommodations to be made by their landlord due to the unprecedented global health crisis.
Commercial landlords must confront the reality that many tenants will simply be unable to pay their rent in the coming months due to the complete cessation of their business function. Eviction is not a feasible solution as, in most instances, there is no realistic prospect of putting in place a new tenancy. Even if a new tenancy were achieved, it would almost certainly be at a lower rent due to the decrease in market demand.
Covid-19 in Latvia: At the meeting of April 7, the Cabinet of Ministers extended the State of Emergency until May 12, 2020. In turn, at an extraordinary session on April 3, the Parliament of Latvia adopted several amendments to the regulatory enactments due to the spread of Covid-19.
The Moscow Mayor Decree dd 04.04.2020 No. 39-UM “On amendments being made to the Moscow Mayor decree dd 05.03.2020 No. 12-UM” (“Mayor Decree”) stipulates the following amendments:
- from organizations, operation of which was suspended within the high-alert regime, are excluded specialized objects of retail trade, selling medical and optico-ophthalmological devices (equipment); as well as organizations, rendering services under a license to carry out medical care
In the time of coronavirus Russian regulators implemented package of emergency legislation including Insolvency law. On April 1, the law was published, and on April 3, the Government exercised the right and introduced a moratorium on initiating bankruptcy proceedings for certain categories of debtors for 6 months.
As the global effect of Covid-19 increases day by day, parties’ abilities to perform contractual obligations have been impacted and will inevitably be further interfered with as this pandemic continues.
In Brief: It remains to be seen whether Covid-19 will enable parties to affected commercial contracts to invoke force majeure relief and therefore excuse non-performance or delay of their contractual obligations, or will it remain possible to issue proceedings against parties for breach of contract, despite the cause of non-performance being the current global pandemic?
A fenyegető gazdasági válság előreláthatólag számos vállalkozás pénzügyi helyzetét fogja megingatni. Ezeknél a vállalkozásoknál módosul a cégvezető felelőssége is: csődközeli helyzetben a vezető ugyanis már nem csak a társaság, hanem a hitelezők érdekeit is köteles figyelembe venni. De ami egyszerű a papíron, az nem annyira az a gyakorlatban. Read more…