Fulfillment of contractual obligations for the period of martial law.
Since February 24, 2022, with the full-scale Russian invasion of Ukraine and the imposition of martial law in Ukraine due to such Russian military aggression, the lives of all Ukrainians have changed dramatically, which in turn has made it impossible or timely to fulfill most treaty obligations.
Let’s try to answer the main questions concerning the fulfillment of contractual obligations for the period of martial law.
✔️Is martial law imposed on February 24, 2022 a force majeure circumstance❓
Letter of the Chamber of Commerce and Industry of Ukraine (hereinafter – CCI) dated 28.02.2022 № 2024 / 02.0-7.1 military aggression of the Russian Federation against Ukraine, which became the basis for the imposition of martial law from 05h 30min 24.02.2022 for 30 days, respectively to the Decree of the President of Ukraine of 24.2.2022 № 64/2022 “On the imposition of martial law in Ukraine”, recognized as a force majeure (force majeure) until the date of its official termination.
Such a decision of the CCI is of a general nature to all those who may be affected and does not require the issuance of a separate individual certificate certifying such circumstances.
✔️Are penalties imposed under contracts in case of non-performance, improper non-performance or violation of deadlines during martial law❓
In connection with the occurrence of force majeure in accordance with the provisions of the Civil Code of Ukraine and the Commercial Code of Ukraine for non-performance, improper or late performance of the contract the party is exempt from paying penalties (penalties, fines), inflation losses, three percent per annum etc).
However, in order to be released from liability, the party in which such force majeure occurred must notify the other party in writing in writing of the impossibility of fulfilling the contractual obligations due to force majeure. Such notice must be sent within the time limit and in the manner specified in the contract.
If the method and / or term of notification in the contract is uncertain or the parties did not specify in the contract provisions on force majeure – the notice must be sent within a reasonable time to the e-mail and / or postal address of the other party to the contract.
✔️ Is the occurrence of force majeure grounds for termination of the contract or non-performance of contractual obligations in the future❓
If the contract provides for the procedure and term of its termination in connection with the occurrence of force majeure or their duration, such contract may be terminated in such order and term or by mutual agreement of both parties to the contract.
If the method and / or term of termination of the contract in connection with the occurrence of force majeure in the contract is not specified, or the parties did not specify in the contract provisions on force majeure – the contract may be terminated in the general order of its termination. the term specified in the contract or by mutual agreement of both parties to the contract.
All obligations that arose in the parties to the contract before the occurrence of force majeure and were not performed in connection with their occurrence, must be performed by the parties after the termination of force majeure, regardless of whether the parties subsequently terminated the contract (terminated the contract).
✔️Can everyone apply the provisions of force majeure❓
The party to the contract is released from liability for non-performance, improper performance or late performance of the contract caused by force majeure, provided that such force majeure was the reason that prevented the fulfillment of obligations.
For example, if your company is in the area of active hostilities or in the temporarily occupied by the aggressor territory of Ukraine and can not manufacture / supply / provide services, etc. or your company is contractually obliged to deliver to a settlement located in the area of active hostilities actions or in the territory of Ukraine temporarily occupied by the aggressor, or your enterprise which is in the territory of Ukraine where hostilities are not conducted, however suffered as a result of air strike – this is a ground for non-fulfillment or late fulfillment of contractual obligations, as the ground that prevents the fulfillment of contractual obligations is objective, real, extremely, inevitable, occurred regardless of your actions and could not have been foreseen.
If your company and counterparty are located in Ukraine, where hostilities are not conducted, you can not refer to the occurrence of force majeure, starting from 24.02.2022.
❗️However, each case is unique and there are many other situations where the provisions of force majeure may be applied, in particular, regarding the implementation of foreign economic agreements. Therefore, we advise you to always seek the advice of qualified professionals – lawyers in contractual relations and business protection.