Virtual Seminar: Rebalancing unbalanced contracts in COVID times: how do legal systems approach the challenge?

The worldwide COVID-19 pandemic, and the sanitary and other restrictions imposed by governments around the world as a result, have seriously complicated virtually every aspect of modern economic life.  Numerous business activities have become either impossible or uneconomic as a consequence of the fundamentally altered economic situation; some have by contrast become more profitable.  Many contracts have become serious unbalanced to the extent that one party has a clear interest in either substantially renegotiating the terms or abrogating the contract entirely.

Although the COVID-induced situation may seem unprecedented in living memory, the world has seen cataclysmic events in the past.  Different legal systems have various techniques for resolving the resultant challenges.  This seminar brought together experienced lawyers from a number of legal cultures for the purpose of presenting their respective solutions to the problem of unbalanced contracts, and highlighting their common features and their significant differences.

 

The speakers for this seminar were:

Dr Lauri Railas, attorney and Adjunct Professor of Civil Law at the University of Helsinki.  Dr Railas is also the statutory Average Adjuster in Finland and an arbitrator.  Before his private legal practice, Dr Railas worked in the Secretariat of the Council of the European Union and as the Secretary General of ICC Finland.  Dr Railas has been active in various ICC and UN working groups especially in the fields of trade and logistics for almost three decades and has participated in the drafting of a number of international commercial law instruments such as the Incoterms (now 2020) and the ICC Model Force Majeure and Hardship Clauses 2020.

Dr Railas addressed ”International commercial law tools for balancing contracts”.  This included:

– Is there a need for international instruments for tackling unforeseen events under contracts?

– The UN Convention on Contracts for the International Sale of Goods (the CISG) and the problem of imbalance

– The Unidroit Principles of International Commercial Contracts and similar tools allowing adjustment of contracts

– The Model Force Majeure and Hardship Clauses 2020 of the International Chamber of Commerce (ICC)

 

Dr Janwillem (Pim) Oosterhuis, Assistant Professor of Foundations and Methods of Law at Maastricht University. Before writing his PhD, Dr Oosterhuis practised law for three years in Amsterdam at Boekel (currently Dentons). Dr Oosterhuis’ research interests include the history of the law of obligations.  Among other topics, Dr Oosterhuis has published on 19th century commercial sales law and the regulatory impact of commercial sales contracts; unforeseen circumstances and World War I; and the history of bills of exchange.

Dr Oosterhuis addressed “When and by whom contracts should be rebalanced in unpredictable times”.  This included:

– Some observations about the originally rather strict approach in continental codes and judicial practice (focusing on France and Germany) towards upholding contracts – even unbalanced ones

– The possible economic rationale of this approach, using insights from law and economics

– The current French and German approach towards rebalancing contracts in unpredictable times

– Whether unbalanced commercial contracts will and should be upheld when such contractual imbalance results from the current pandemic

 

Mr Graham Coop, Partner at Volterra Fietta.  Mr Coop is qualified as a barrister and solicitor in New Zealand and as a solicitor with higher rights of audience (Civil) in England and Wales. He advises and represents companies, governments and international organisations on international dispute resolution and public international law, with a particular focus on the energy, natural resources and infrastructure and banking sectors. He has appeared as counsel, advocate and expert before a wide range of international courts and tribunals, including the International Court of Justice, ICSID, the PCA and the ICC. He is on the UK Attorney General’s list of public international law practitioners.

Mr Coop chaired this online event and addressed “The common law approach to rebalancing unbalanced contracts”.  His presentation included the common law doctrine of frustration and the approach adopted by English and other common law courts to force majeure, with a particular focus on major international disputes and on contractual disputes arising out of pandemics and other major disruptive events.

For any queries regarding the content of the seminar, please email graham.coop@volterrafietta.com.

 

To attend this seminar please RSVP to seminars@volterrafietta.com stating your name and affiliation.