‘Force Majeure Clause in contracts should be applied prudently’
Experts in a webinar on ''Application of Force Majeure Clause: Should COVID-19 Be Included?''-organised by Bangladesh International Arbitration Centre (BIAC) held on Monday emphasised prudent invocation of Force Majeure Clause in commercial contracts at this hard time of growing spread of COVID-19 pandemic throughout the globe.
They also urged upon entrepreneurs to forge unity among themselves.
The webinar aimed to discuss on the possible impacts of COVID-19 on the ongoing ADR proceedings, applicability of Force Majeure clause, risk factors and how to manage risks arising out of commercial contracts.Judges, business leaders, bankers, lawyers, ADR experts from home and abroad, academicians, corporate representatives and students of law and business participated in the webinar.
Six outstanding Panelist Discussants took part in the discussion and viewed the issues of Application of Force Majeure clause in the current COVID-19 scenario from their own perspectives.
Justice Md. Rezaul Hasan, Judge of the High Court Division, Supreme Court of Bangladesh in his deliberation said that only unforeseeable circumstances that prevent someone from fulfilling a contract or irresistible compulsion come under the purview of Force Majeure, but proximate cause of non performance of contract is government order, not Force Majeure itself.
In existing laws there are remedies of non performance of contract and Force Majeure clause is not applicable as a proximate cause, except in shutdown, lockdown, stoppage of traffic which are followed pursuant to government orders, he said.
Justice Hasan emphasised prudent invocation of Force Majeure Clause in commercial contracts only under unforeseeable circumstances during COVID-19.
Speaking on the occasion BIAC Chairman Mahbubur Rahman opined that commercial contracts chiefly base on mutual trust between the parties;unless there is any comprehensive contract, Force Majeure clause can not be enforced. During the spread of COVID-19, in some cases Force Majeure may be applicable where flights and movement of sea going vessels and surface transport have been shut down or restricted by governments, he said.
Mahbubur Rahman, also Chairman of International Chamber of Commerce-Bangladesh stressed the need of fixing favourable terms for our exporters in the Pro Forma Invoices, so that Force Majeure issues can not be misinterpreted by the buyers for their own interest.
The largely attended Webinar through Zoom transmission was moderated by Barrister Sameer Sattar, Advocate of Bangladesh Supreme Court and Head of Firm, Sattar and Co. Chief Executive Officer of BIAC Muhammad A. (Rumee) Ali in his address of welcome said that BIAC as the country's only licenced ADR institution and also recognised by the Permanent Court of Arbitration, the Hague, has been relentlessly trying to resolve business disputes through Arbitration, Mediation and other methods of ADR.
Miran Ali, Director, Bangladesh Garment Manufacturers and Exporters Association, Rahel Ahmed, Managing Director and CEO of Prime bank Ltd., Dr. Md. Anowar Zahid, Dean, Faculty of Laws, Eastern University, Barrister Margub Kabir, Adocate of the Supreme Court of Bangladesh, Barrister Sameer Sattar, Director of BIAC M A Akmall Hossain Azad also participated.