Covid-19 — A Contractual Nightmare
Arun Subash, Legal Counsel for Oil and Gas - E&P, Reliance Industries Limited, India
While COVID-19 (previously known as ‘2019 novel coronavirus’) has engulfed the entire world and authorities have been desperately implementing umpteen measures to contain the spread of this pandemic; from a contractual perspective, COVID-19 has caused an interpretational nightmare which may blow up into costly arbitration or re-negotiation of contractual terms.
One of the crucial concerns that can be raised by contracting parties is whether COVID-19 is a ‘Force Majeure event’ after all. If it is a ‘Force Majeure event’, then what happens in the case where a particular industry is declared ‘Essential Services’ by government and is allowed to continue performance of its activities; in such a scenario, whether any contractual party from such an industry can invoke ‘Force Majeure’ and seek an excuse from performance of its contractual obligations.
This article intends to throw light on such issues and many more potential issues that could emanate in Construction Contracts (offshore and onshore) from the unprecedented COVID-19 situation.
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