Covid-19 and international sale contracts: unprecedented grounds for exemption or business as usual?
| Autor | Andre Janssen, Christian Johannes Wahnschaffe |
| Cargo del Autor | Radboud University Nijmegen ? The Netherlands / Westfälische Wilhelms-Universität Münster - Germany |
| Páginas | 349-380 |
349
Covid-19andinternationalsaleContraCts: UnpreCedentedgroUndsfor
exemptionorbUsinessasUsUal?
covid-19 And internAtionAL sALe contrActs:
unPrecedented grounds For eXemPtion or Business
As usuAL?
Andre Janssen
(Radboud University Nijmegen – The
Netherlands)
Christian Johannes Wahnschaffe
(Westfälische Wilhelms-Universität Münster
– Germany)
1. introduction
“From that point on, it could be said that the plague became the affair of
us all. Up to then, despite the surprise and anxiety that these unusual events
had brought us, everyone had gone on with his business, as well as he could,
in the usual place. And that no doubt would continue. But, once the gates
were closed, they all noticed that they were in the same boat, including the
narrator himself, and that they had to adjust to the fact.” (Albert Camus, The
Plague, 1947).
With curfews imposed by governments around the world and a myriad
of aircrafts grounded, the COVID-19 pandemic has – to borrow from Camus
– closed the proverbial gates on international trade.Whilst the pandemic is
far from over, its severe repercussions on society are all too evident and have
evolved into an affair for all of humanity. Amongst other things, business
is not going on: The World Trade Organization (WTO) expects the volume
of world trade to fall by anything from 13 % to 32 % in 20201. A crisis of
this kind raises many questions, not only concerning the response required
by the international community, but also with regard to the implications for
contractual relations in global trade. The signicance of these questions is
exemplied by the fact that States such as China and Italy are issuing force
majeure certicates in an effort to protect (domestic) companies from ensuing
1 World Trade Organisation, “Trade set to plunge as COVID-19 pandemic upends global
economy”. https:// wto.org/english/news_e/pres20_e/pr855_e.htm.
350
Andre JAnssen/ChristiAn JohAnnes WAhnsChAffe
contractual claims2. The unresolved issues troubling international trade are
easily discerned. In cross-border contracts for the sale of goods, questions
arise as to whether the seller can be held to comply unconditionally, even in
these times of crisis, which legal grounds could serve as basis for an exemption
from liability and which conditions could satisfy such exemption, to name but
a few.
For international contracts concerning the sale of goods, the answer to
these questions can frequently be found within the framework of the UN
Convention on Contracts for the International Sale of Goods (hereinafter
CISG), which presently accommodates 93 Contracting States, including
almost all major industrialised countries3. In a rst step, this contribution
will therefore explore the general concepts of party liability as provided by
the CISG, including the scope for individual deviations by means of party
agreement (II.). These general observations will be followed by a closer
examination of the central exemption provision in Article 79 CISG, focussing
on its applicability under the COVID-19 pandemic, aided by practice-oriented
scenarios (III.). These observations then necessitate a critical analysis of the
legal consequences that ensue from an exemption from liability under the
CISG (IV.). Finally, this contribution will briey address the possibility of
individual contractual stipulations on the basis of two ICC model clauses (V.),
followed by a short outlook (VI.).
2. the system oF LiABiLity under the cisg: STRICT lIAbIlITY
And Avenues oF eXemPtion
Liability for breach of contract under the CISG is assumed without the
requirement of fault (“strict liability”). In order to prevent excessive liability,
such a broad approach necessarily requires corrective limitations4. The central
provision in this regard is Article 79 CISG, the rst paragraph of which is
2 See, e.g., REUTERS, “China force majeure certicate issuance pass 5,600 amid virus out-
break”, 2020 https://reut.rs/2TIfLP2; M. CENINI, G. MARONCELLI and R. PADULA,
‘International supply chain: Italian Chambers of Commerce may issue the “force majeure
certicates”’ (IPSOA, Wolters Kluwer, 2020). https://www.ipsoa.it/documents/impresa/con-
tratti-dimpresa/quotidiano/2020/04/14/international-supply-chain-italian-chambers-of-commer-
ce-may-issue-the-force-majeure-certicates.
3 For the full list of Contracting States, see, e.g., Uncitral, “Status: United Nations Con-
vention on Contracts for the International Sale of Goods (Vienna, 1980) (CISG)”. https://
uncitral.un.org/en/texts/salegoods/conventions/sale_of_goods/cisg/status.
4 Y. M. ATAMER, “Art. 79 CISG”, in S. KRÖLL, L. MISTELIS and P. P. VISCASILLAS (eds),
UN Convention on Contracts for the International Sale of Goods (CISG) – A Commentary (2nd
edn, CH Beck/Hart/Nomos, Munich/Oxford/Baden Baden 2018) para 2; P. HUBER,
“Art. 79 CISG”, in F. J. SÄCKER et al (eds), Münchener Kommentar zum Bürgerlichen Gesetz-
buch (8th edn, CH Beck, Munich, 2019) para 1;U. MAGNUS, “Art. 79 CISG”, in U. MAG-
NUS and M. MARTINEK (eds), J von Staudingers Kommentar zum Bürgerlichen Gesetzbuch
mit Einführungsgesetz – Wiener UN-Kaufrecht (Revised edn, Sellier de Gruyter, Berlin, 2018)
para 1; I. SCHWENZER, “Art. 79 CISG”, in P. SCHLECHTRIEM and I. SCHWENZER
(eds), Commentary on the UN Convention on the International Sale of Goods (CISG) (4th edn,
OUP, Oxford, 2016) para 1.
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Covid-19andinternationalsaleContraCts: UnpreCedentedgroUndsfor
exemptionorbUsinessasUsUal?
the starting point for any exemption from liability in the international sale of
goods5. Accordingly, a party is not held liable for a failure to perform if it can
show that this failure was due to an impediment beyond his control and that
the party itself could not reasonably be expected to have taken the impediment
into account or to have avoided or overcome it or its consequences. Moreover,
Article 79(2) CISG contains a provision for cases involving third parties.
Article 79(3) CISG limits the duration of the exemption to the duration of the
impediment’s existence. If the exemption from liability applies, Article 79(4)
CISG obliges the debtor to issue an informal notice of the impediment and its
effect on its ability to perform to the other party within a reasonable period of
time6. Finally, the wording of Article 79(5) CISG points to the exemption from
claims for damages as the sole legal consequence under the provision.
Up until now, the practical signicance of Article 79 CISG has been rather
limited, given that the provision sets high standards for exemption from
liability7. Accordingly, case law has relied on Article 79 CISG only in a few
exceptional cases8. However, the particularities of the COVID-19 pandemic
5 “Art. 79 CISG” reads: “(1) A party is not liable for a failure to perform any of his obligations
if he proves that the failure was due to an impediment beyond his control and that he
could not reasonably be expected to have taken the impediment into account at the time
of the conclusion of the contract or to have avoided or overcome it or its consequences.
(2) If the party’s failure is due to the failure by a third person whom he has engaged to
perform the whole or a part of the contract, that party is exempt from liability only if:
a) he is exempt under the preceding paragraph; and
b) the person whom he has so engaged would be so exempt if the provisions of that para-
graph were applied to him.
(3) The exemption provided by this article has effect for the period during which the im-
pediment exists.
(4) The party who fails to perform must give notice to the other party of the impediment
and its effect on his ability to perform. If the notice is not received by the other party with-
in a reasonable time after the party who fails to perform knew or ought to have known of
the impediment, he is liable for damages resulting from such non-receipt.
(5) Nothing in this article prevents either party from exercising any right other than to
claim damages under this Convention”.
6 I. SCHWENZER, “Art.79 CISG“ (n 4), para 46.
7 I. SCHWENZER, “Art. 79 CISG”(n 4), para 1 (“exemption should only be considered
under very narrow conditions”); cf C. P. GILETTE and S. D. WALT, The UN Convention on
Contracts for the International Sale of Goods: Theory and Practice (2nd edn, CUP, Cambridge,
2016) p. 295; P. HUBER (n 4), para 1.
8 See, e.g. Ag Charlottenburg (Lower Court), CISG-Online No 386; Handelsgericht Zurich
(Commercial Court), CISG-Online No 488 = CLOUT Case No 331; ICC, arbitral award in
Case No 8790/2000, CISG-Online No 1172 = CLOUT Case No 1085; Ag Willisau (Lower
Court), CISG-Online No 961 = CLOUT Case No 893;U.S. District Court, Northern Dis-
trict of Illinois, Eastern Division, Raw Materials Inc v Manfred Forberich, GmbH & Co
KG, CISG-Online No 925 = CLOUT Case No 696; Cour De Cassation (Belgian Court of
Cassation), Scafom Intl v Lorraine Tubes SAS, CISG-Online No 1963; cf also U. MAG-
NUS (n 4) para 4, who emphasises that as a rule, the reference to Art. 79 CISG has been
unsuccessful.
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